Connecticut is again poised to take a costly step deeper into the business of health care.
On Oct. 14, the CT Mirror reported the state is preparing to borrow nearly $390 million to allow UConn Health to purchase Waterbury Hospital from Prospect Medical Holdings, a bankrupt private operator. The plan, part of the state’s “UConn 2000” bonding package, also sets aside funds for “future clinical partnerships,” signaling that additional hospital acquisitions — including Bristol and Day Kimball — could follow.
Proponents describe this as an investment in access and stability. But expanding state ownership of hospitals would move Connecticut further away from fiscal discipline, market competition, and regulatory fairness — the foundations of a sustainable health care system.
Fiscal guardrails exist for a reason
Connecticut’s fiscal guardrails exist to keep state spending predictable and sustainable. When government begins acquiring struggling hospitals, it doesn’t simply buy assets — it inherits operating losses, personnel costs, and future pension obligations.
UConn Health already runs persistent operating losses driven largely by wage scales and fringe benefits tied to collective bargaining agreements. Expanding that model would multiply costs and shift them directly onto taxpayers. Borrowing to buy hospitals may look like a rescue today, but it guarantees higher debt service tomorrow.
A regulatory system that discourages competition
Connecticut’s Certificate of Need (CON) system, overseen by the Office of Health Strategy (OHS) since 2019, already gives state regulators sweeping control over how hospitals and providers operate. Everything from adding beds to buying imaging equipment requires approval — a process that can take more than a year.
The Waterbury Hospital sale itself took about 18 months to gain approval. By comparison, Massachusetts limits its Determination of Need process to capital projects or service closures; and if the state does not act within four months, the proposal is automatically deemed approved. Connecticut has similar timelines on paper, but OHS can extend them indefinitely, often at the request of competing hospitals.
That intervention process, meant to encourage transparency, has instead become a defensive tool for established health systems to delay new entrants. Hospitals and trade associations can file as interveners, prolonging reviews and raising costs. Even some hospital administrators now acknowledge the system’s inefficiencies, calling for reform.
Lawmakers took a modest step this year with an “expedited CON process,” but it largely trims timelines rather than rethinking the broader regulatory approach. The underlying issue is not overuse of medical services — insurers already monitor utilization — but rather overregulation that limits access and innovation.
Conflict of interest and long-term liabilities
If UConn Health expands its footprint through acquisitions, Connecticut becomes both regulator and competitor. When the same government office writes the rules and owns the facilities, it creates a structural conflict of interest. That dynamic discourages private investment in health care and innovation, pushing more control — and risk — onto taxpayers.
Beyond that, the state would grapple with decades of financial commitments. Every hospital the state acquires brings hundreds of new state employees eligible for pensions and retiree health benefits. With Connecticut already managing one of the nation’s highest unfunded pension burdens, this expansion would add layers of permanent liabilities for future generations.
A better prescription
Preserving hospital access doesn’t require government ownership. The state could streamline or repeal much of the CON process, taking cues from the Massachusetts model. It could pursue public-private partnerships that bring in capital without adding employees to the state payroll. It could also use targeted stabilization grants linked to performance, giving hospitals time to adjust without creating permanent financial exposure.
These strategies would protect patient access and local jobs while maintaining fiscal discipline.
Let markets, not government, drive reform
Connecticut’s health care system doesn’t need more bureaucracy — it needs room to breathe. By reducing regulatory barriers, encouraging innovation, and holding spending within its fiscal guardrails, the state can strengthen care delivery without turning itself into a hospital operator.
Buying hospitals is an enticing strategy under the guise of providing stability to the health care system. However, in practice, this plan would mean fewer choices, higher costs, and long-term debt. Connecticut should resist that path and focus instead on reforming the regulatory system that has made its hospitals less competitive in the first place.
