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Possible $100 Million Grant Doesn't Settle UConn Hospital's Future

ARIELLE LEVIN BECKER

December 22, 2009

Two days after U.S. Sen. Christopher Dodd succeeded in getting a $100 million grant for a university hospital into the Senate health reform bill, it remained unclear how a potential new pool of federal funding would affect the long-standing debate over the future of the UConn Health Center.

But one thing was clear: If the grant goes through, UConn will be going after the money.

"We very much appreciate Senator Dodd's willingness to offer up this proposal and we can't thank him enough for all his hard work on behalf of the state and the University of Connecticut," UConn President Michael Hogan said in a written statement. "We are currently looking at the language in the bill and are hopeful that this will become law so that we can apply for the grant. Without question, UConn has a compelling case to make for awarding this funding to our institution."

University leaders have been developing a new strategy to address the future of the health center, which they have said requires a new hospital. The provision Dodd added to the federal legislation would allocate $100 million to build or renovate a university hospital.

The U.S. Department of Health and Human Services would decide where the money goes, but it appears that besides UConn's John Dempsey Hospital, only 11 or so other hospitals in the nation would qualify for the funding.

UConn leaders say the 224-bed Dempsey Hospital is small and outdated, making it difficult to recruit and retain top faculty and holding back the medical school from achieving top-tier status. Dempsey has struggled financially in recent years, requiring money from the state to cover deficits.

The university's two most recent plans for Dempsey, which both included calls for a new hospital on the health center's Farmington campus, have failed to win legislative support.

Gov. M. Jodi Rell has taken the position that a new hospital would create jobs and help the medical school, but that any plan must be affordable and able to pass the legislature. She opposed a plan this year to use state money for a new $475 million hospital to replace Dempsey, saying it was too expensive.

The federal funding could help pay for a new or renovated hospital, but it wouldn't cover the whole thing. Under the terms outlined in the Senate health bill, the federal money can account for no more than 40 percent of the facility's cost, meaning that if the state were to receive $100 million, it would need to find at least $150 million more for the project.

But money hasn't been the only hurdle for the health center.

The hospital market in the region is intensely competitive, and recent attempts to build a new hospital in Farmington have drawn opposition from other hospitals.

In 2007, when UConn officials proposed building a $495 million, 352-bed hospital to replace Dempsey, leaders of other area hospitals rallied to defeat the proposal in the legislature. The hospitals feared that a new hospital in the wealthy Farmington Valley would draw away privately insured patients.

Earlier this year, UConn presented a new proposal to lawmakers, using a different approach: a merger with Hartford Hospital. The proposal still called for a new hospital to replace Dempsey, in this case, a $475 million hospital, to be built with state money. The plan also would have required the state to pay roughly $13 million a year in labor costs.

UConn leaders pushed hard for the proposal, but it drew opposition from the health center's unions, Bristol Hospital and St. Francis Hospital and Medical Center in Hartford. Rell came out against it, too, saying the plan was too costly.

Last month, UConn leaders scrapped the plan after determining that it could not win enough support to be viable.

Strict Parameters

Since then, UConn leaders have been developing a new plan for the hospital and hope to have something ready to present to lawmakers during next year's legislative session.

It's possible that federal health reform could shake up the hospital market by increasing the number of people with health insurance, creating a larger potential patient base and a greater need for more hospital beds. Experts have long raised concerns about the capacity of the health care system to absorb the new patients who would likely seek care if more were insured.

A 2008 report by a consultant concluded that the state would not need additional hospital beds in the near future.

Under the provision Dodd added to the health bill, the federal money would be available through the end of September 2011, and could be used for construction, renovation or debt service on a health care facility.

The bill outlines strict parameters for what a health facility needs to qualify for funding: It must be affiliated with an academic health center at a public research university that includes the state's only academic medical and dental schools. The facility must also be "essential for the continued financial viability" of the medical and dental schools and academic health center and be "critical for the provision of greater access to health care" in the state.

The state must have established a way to provide the money necessary to finish the project.

At least 12 states, including Connecticut, fit the requirements of having just one public medical school and one public dental school. Those states include New Jersey, Maryland, Colorado and Minnesota.