Kaufman Hall Advises Western Connecticut Health Network on Labs Partnership with Sonic Healthcare USA

SKOKIE, Ill. – March 1, 2017 – Western Connecticut Health Network (WCHN) and Sonic Healthcare USA (Sonic) recently announced that they have entered into a definitive agreement to form a joint venture to enhance laboratory services for individuals and healthcare providers throughout Connecticut. Kaufman Hall served as WCHN’s financial advisor in pursuing the partnership. As described in our recent Industry Flash Report, downward pressures are driving many hospital-based labs to assess strategic options and pursue unique partners and structures to meet their goals and the needs of their community.

Kaufman Hall led a team that assessed the performance of WCHN’s outreach and inpatient/outpatient labs and determined the need for a partner to better position the health system to serve its patient population.

Kaufman Hall’s team of experts worked closely with WCHN to identify the optimal partner and structure based on the unique goals and objectives of the Health System. The new entity – known as Constitution Diagnostics Network (CDN) – combines the existing, high-quality, clinical and anatomic pathology laboratory testing capabilities of WCHN’s three community-based hospitals with esoteric testing capabilities offered by Sonic through its Sunrise Medical Laboratories division.

The combined healthcare services will result in more choices for local physicians and healthcare providers. Further, approximately 80 percent of the testing completed by CDN will be performed at WCHN, maintaining critical jobs and skills along with the provision of healthcare services within the state.

“This joint venture enhances our capabilities to provide more comprehensive laboratory testing services for residents and healthcare providers throughout Connecticut, and is part of WCHN’s strategy to continually find ways to deliver value-based care and services by increasing quality while reducing cost,” said Michael Daglio, Chief Strategy Officer of WCHN. “Through this joint venture with Sonic, we have an exceptional new offering (lab services) which will benefit patients and providers, while providing business growth opportunities for our newly-combined laboratory services company.”

To learn more about this transaction and how Kaufman Hall is assisting healthcare providers with strategic partnerships, please contact Senior Vice President Courtney Midanek at cmidanek@kaufmanhall.com or 847.441.8780.