Connecticut-based nonprofit Day Kimball Healthcare is in the early stages of establishing a potential partnership with Prospect Medical Holdings, a California for-profit that already owns three hospitals in the state -- though many have been cited for treatment lapses, according to the Hartford Courant.
Since the deal is still in the early stages, financial terms have not been disclosed, and it could be several months before the dust settles, though the agreement itself is projected to be finalized this fall, according to a press release from Day Kimball.
Prospect Medical Holdings operates 20 hospitals across the country as well as 165 clinics and outpatient centers.
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WHAT'S THE IMPACT
As it stands now, the deal would establish an as-yet unnamed subsidiary that would manage Putnam, Connecticut's Day Kimball Hospital and its associated health centers, including Day Kimball Medical Group and Day Kimball HomeCare.
According to the Norwich Bulletin, Prospect Medical's three Connecticut hospitals, which it purchased and made for-profit in 2016, ranked poorly in the Centers for Medicare and Medicaid Services' nationwide hospital rating system this year, with two hospitals earning one-star ratings and the other earning a two-star rating. Day Kimball currently has a three-star rating.
One of the one-star facilities, Waterbury Hospital, was the site of a suicide and suicice attempt in March, and the one-star Manchester Memorial experienced an incident in which a woman died giving birth to a stillborn baby. There was also a separate episode at that hospital in which an emergency C-section was performed too late, resulting in an infant born with severe neonatal encephalopathy.
Day Kimbal spent $125,000 on a new branding campaign earlier this year, attempting to position itself as a modern community health system.
THE LARGER TREND
The volume of mergers and acquisitions ticked back up during the second quarter of this year, and hit a milestone of sorts: It marked the eighth straight quarter in which volume topped 250 deals.
In all, that's good for a 7.3% increase from the first quarter, according to the latest report from PricewaterhouseCoopers. The value of those deals also showed a significant increase -- 10.3% higher than the average of the seven quarters that preceded it.