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UConn Hospital Plan Demands Examination

KURT BARWIS

June 07, 2009

Although the General Assembly's regular session is over, the proposed partnership between the University of Connecticut Health Center and Hartford Hospital, which includes the replacement of the Health Center's John Dempsey Hospital, is still actively being considered. Collectively, this entity would be known as University Hospital Inc., and if authorized would receive about $900 million in state funding.

This proposal is unacceptable from a fairness and equity perspective. Years of underfunding by state Medicaid and Medicare programs and the burden of uncompensated care have left Connecticut hospitals with limited capital to replenish their aging facilities.

While Dempsey is a newer hospital, all Connecticut hospitals face significant challenges, require renovations and need more capital investment. Hospitals throughout the state provide critical care. Accordingly, the needs of all the state's hospitals should be considered priorities, not those of just one.

There is insufficient data regarding the costly University Hospital proposal. With an estimated $900 million at risk, the benefits and drawbacks must be weighed. This requires proper financial feasibility analysis of the replacement hospital, careful examination of the partnership, full accounting of borrowed funds and analysis of the effect on patients, communities, other hospitals and businesses. Unfortunately, no such information is available. The UConn Health Center provided an economic analysis of the proposal conducted by a University of Connecticut professor. The research must be substantiated by unbiased parties. Taxpayers deserve no less.

The Office of Health Care Access, the state agency that oversees health care matters, should conduct this research. In a draft bill, however, the Health Center and Hartford Hospital recommended the proposal bypass the Office of Health Care Access' established process — undoubtedly to remove potential hurdles and speed the plan forward. Under Office of Health Care Access procedure, the agency would hold hearings and scrutinize the plan's financial feasibility and its effect on health care delivery, hospitals and patients.

Review by unbiased parties is critical to understanding the proposal's effect on health care providers, particularly the potential for unfair market advantage. The new organization could consist of: Hartford Hospital, which controls MidState Medical Center, with facilities in and around Meriden, and Windham Community Hospital; Dempsey; and the Hospital of Central Connecticut, with facilities in New Britain and Southington (currently in discussions).

Control of this magnitude will create tremendous monopoly power with the potential to escalate health insurance rates, limit patient choice and drive businesses out of Greater Hartford. It is distressing that one of the proposed bills exempts the partnership from all federal and state competition laws. These laws were written to protect the public and ensure healthy competition and a fair market environment.

Of chief concern is how Hartford Hospital, which sustained an $8.1 million operating loss last year and lost money from operations the year before, will be entrusted to govern Dempsey, with its even more troublesome financial history. Dempsey is one of the highest-cost hospitals in Connecticut. In addition, the $900 million includes an annual infusion of $13 million to cover labor benefit costs. This is estimated to grow to $28 million annually by 2030, a further indication that this proposal will not resolve underlying financial concerns.

The proposal's burden on taxpayers, Hartford Hospital's recent fiscal history and inconsistent approach to financially troubled Dempsey, whose replacement it once opposed, cast doubt about the merger's viability and justifies the need for a more thorough examination of this proposal.

Connecticut's hospitals provide care to all patients, regardless of their ability to pay. As a state-supported institution, the Health Center must understand the needs and importance of all of Connecticut's hospitals while remaining conscious of the state's limited funds. If $900 million is available now or even in the foreseeable future, these funds should be used to support a broader statewide health care agenda. Although it is important to support the Health Center's academic mission, no legislation should be passed without proper, unbiased analysis and open public debate.