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Budget Plan Means Layoffs, End Of Services, Say Hospital Advocates

By WILLIAM WEIR

April 11, 2013

HARTFORD — The governor's proposed state budget plan will "devastate" Connecticut hospitals and cause layoffs and elimination of services, hospital advocates and legislators told a crowd of hundreds at the state Capitol on Thursday.

"There is no way around it — cuts of this magnitude will impact patient care," said Jennifer Jackson, president and CEO of the Connecticut Hospitals Association. "It will close programs and services. It will put people out of work in hospitals and around the communities. It will lay an added health care cost on businesses and premiums for workers. We cannot let this happen."

The crowd — mostly hospital workers and administrators –- packed a room in the Legislative Office Building and spilled out into the hall, prompting security officials to clear the way several times. The rally featured speakers from Connecticut hospitals, lawmakers and workers concerned about the proposed state budget.

Patrick Charmel, CEO of Griffin Hospital in Derby, said that the governor's budget would mean $550 million less for hospitals over the next two years.

"It's going to affect our ability to deliver care," Charmel said. "Anyone who says that's not the case isn't telling the truth. It's unacceptable, it's unsustainable and it's devastating."

State officials said that it was inaccurate to say that the budget cuts funding to hospitals. The proposed budget holds hospital funding at the same level from this year through 2015, said Ben Barnes, secretary of the state Office of Policy and Management. Hospitals have benefited from "extraordinary increases" in state funding in the past decade, he said, especially in the past few years as Connecticut has expanded Medicaid.

"The amount of money we spent on hospitals in fiscal year 2011, we gave just under $1.3 billion, and today it's $1.7 billion," said Barnes, reached after the morning press conference. "Call it what you want, they're getting more money today than in 2011."

"What we're proposing is level funding ... this year, next year and the year after that," Barnes said. The kinds of increases that hospitals received in the past few years, he said, can't continue. "We can't afford to pay those increases — to anybody."

Charmel called Barnes description of "level funding ... a total misnomer and it's a diversionary tactic so we don't focus on the fact that we've just imposed a $550 million tax on the state's hospitals."

"He's not pointing out the reality, which is that, because of the downturn of the economy and high levels of unemployment, we have many, many Connecticut citizens who have lost their commercial [medical] insurance, and now they're on Medicaid," Charmel said. "It may be true that the amount of Medicaid spending is flat, but we're going to be caring for over 100,000 additional Connecticut residents. That doesn't happen for free."

Charmel also said that the state had imposed a tax of $350 million on hospitals in 2012. It was welcomed by hospital officials at the time because, by exploiting a federal loophole, the state would then "recycle" the money back to the hospitals. In the proposed budget, though, the state will be keeping most of that money.

Over the next two years, according to the Connecticut Hospital Association, $403 million from this tax will not be returned to hospitals. Additionally, hospitals will lose $45.4 million due to Medicaid rate cuts and $100.7 million because of the elimination of Disproportionate Share Hospital subsidies — federal money provided to help make up some of the costs of care for the uninsured and shortfalls in Medicaid payments.

Barnes said the Disproportionate Share Hospital subsidies soon won't be needed because the Affordable Care Act will prompt most of the state's approximately 300,000 uninsured residents — about 10 percent of the population — to get insurance.

"Virtually all of them will have insurance within a few years," Barnes said. "It happened in Massachusetts, and no reason to think it won't happen here."

It won't happen right away, he said, but Connecticut is on pace to have health insurance exchanges up and running by the start of next year.

"There are maybe five other states who are in that position," he said.