Kaufman Hall Advises Day Kimball Healthcare on Potential Partnership With Hartford Healthcare
Day Kimball Healthcare (DKH) and Hartford HealthCare (HHC) announced last week that they are exploring a strategic partnership that could lead to a formal affiliation. The DKH Board of Directors voted to begin the process by authorizing a non-binding Letter of Intent with Hartford HealthCare, which allows the two organizations to work together to outline the terms of the proposed affiliation. Kaufman Hall has served as strategic and financial advisor to DKH in evaluating the potential partnership with HHC.
Initially, the two systems will enter into a series of management services agreements (MSAs) that will allow HHC to provide support for select operations determined by DKH. These agreements will offer economies of scale to help DKH reduce its cost structure.
In addition, the two organizations will participate in initiatives to enhance quality, safety and value-based arrangements that will benefit patients served by both healthcare systems. These agreements and partnerships will take place as the two organizations work to consider a formal integration.
During this time, DKH and its physicians will have the opportunity to participate in HHC’s Integrated Care Partners (ICP) organization, a physician-led community of providers dedicated to improving the coordination of care and patient outcomes. ICP member providers use evidence-based medicine protocols; forge partnerships with health plans, employers and providers; and provide services to improve the health of the populations they serve.
“At Day Kimball Healthcare, our mission has always been, and continues to be, to keep the people of Northeast Connecticut healthy,” said Robert Smanik, FACHE, DKH president and chief executive officer, in a press release issued on July 16. “To fulfill that mission, we have been proactive and innovative in meeting the challenges of a rapidly changing healthcare environment, integrating services across our network to provide efficient and coordinated patient-centered care. We see a potential affiliation with Hartford HealthCare as important to continuing that mission.”
As advisor to DKH, Kaufman Hall counseled the senior management team on the financial and strategic implications of the contemplated combination and assisted in negotiating the specific terms of the deal. Kaufman Hall also worked directly with DKH’s senior management team and their legal counsel to develop a transaction form and structure that could meet the health system’s strategic objectives while addressing certain state of Connecticut considerations.
“An affiliation with HHC would provide DKH clinicians and patients with access to HHC’s key system-wide health care service lines,” Smanik added in the same press release. These include cancer care, orthopedics, behavioral health, cardiology, stroke treatment, outpatient services and neuroscience. “Conversely, DKH, with our unique background in rural health, will work with HHC as it continues to focus on population health improvement.”
The signing of a Letter of Intent is the first step before an affiliation can be created. Both organizations will perform due diligence to determine if an affiliation would be in the best interest of those served by both organizations. If there is agreement to move forward, a Definitive Agreement would be created. This would require the approval of the two organizations’ respective governing boards, and regulatory approval by appropriate government agencies.
To learn more about how Kaufman Hall is assisting healthcare organizations with partnership decisions and transactions, contact Managing Director Patrick Allen at 847.441.8780 or pallen@kaufmanhall.com.