Letter of Intent
ECHN Signs Non-Binding Letter of Intent with Vanguard Health Systems and Yale New Haven Health System
August 8, 2013 - Eastern Connecticut Health Network (ECHN) announced that it has signed a Letter of Intent (LOI) to explore an affiliation with Vanguard Health Systems and Yale New Haven Health System (YNHHS). ECHN believes that the proposed affiliation will enhance healthcare quality, access and efficiency for residents of eastern Connecticut. Under the terms of the LOI, the Vanguard Health Systems/YNHHS alliance will purchase the assets of ECHN and invest the capital resources necessary to ensure the ongoing local delivery of care. Vanguard will manage and operate Rockville General and Manchester Memorial Hospitals as well as the other ECHN affiliates. YNHHS will provide ongoing clinical support, quality and service line management. The strategic relationship between Vanguard Health Systems and YNHHS provides a unique opportunity for ECHN to develop a strong clinical partnership with a leading academic medical center like YNHHS and, along with Vanguard Health Systems, continue to provide high quality care while preserving and expanding local access to care. Under the partnership, YNHHS and all of its delivery networks will remain an independent, not-for-profit health system.
The signing of the LOI represents the first round in this multistep process. It will allow YNHHS, Vanguard Health Systems and ECHN to conduct additional due diligence and review the opportunity in greater detail, and negotiate a definitive agreement. Once these processes are complete, the parties will initiate a broader regulatory review of the transaction by appropriate state and federal agencies.
“We are very pleased to be part of this unique partnership because we firmly believe that both Yale New Haven and Vanguard Health Systems bring significant support and an ongoing commitment to the provision of exceptional patient care,” said Peter Karl, President and Chief Executive Officer of ECHN. “At ECHN we are fully committed to preserving local access to world class healthcare. This partnership preserves the mission, vision and values of ECHN and allows us to build on a century of caring for our patients and their families east of river.”
“Our partnership with Yale New Haven Health System is built upon a shared vision and strong cultural alignment to provide transformative approaches to clinical care and business operations,” said Keith Pitts, Vice Chairman of Vanguard Health Systems. “Together we provide significant experience managing health systems in Connecticut and throughout the nation.”
The LOI outlines an innovative partnership that would deliver sophisticated care across a wide spectrum of primary and specialty services. Significant cost and operational efficiencies would be created by spreading costs across a wider base of operations and through the better coordination of care. In addition, by creating an integrated delivery network, Vanguard Health Systems and ECHN, working collaboratively with YNHHS, would be well-prepared for changes inherent in healthcare reform, including reimbursement methodologies that are intended to control the costs of healthcare. Vanguard Health Systems will provide the financial ability to invest capital and resources into new technology, infrastructure and growth.
“This is a historic time for the healthcare industry and this represents a unique opportunity for Yale New Haven, Vanguard Health Systems and ECHN,” said Marna P. Borgstrom, President and CEO of YNHHS. “In the wake of unprecedented challenges to healthcare organizations across the nation to manage costs and improve quality, this represents an innovative way to enhance access, improve quality and manage costs. Developing novel partnerships with organizations like Vanguard Health Systems and ECHN, which share our core values, will allow us to manage within this environment more effectively.”