On the heels of a new report about their fiscal health, Connecticut hospital executives and employees told lawmakers and Gov. Dannel P. Malloy on Wednesday that they need to release money they were promised in December.
A report filed with the Office of Health Care Access by at least 25 hospitals showed at least eight lost money in 2015, while the two biggest hospitals, Hartford Hospital and Yale New Haven Hospital, had healthy profit margins of around 4.99 percent and 4.33 percent.
Of the 25 hospitals reporting their financial data to the state: St. Vincent’s Hospital, Waterbury Hospital, Danbury Hospital, Rockville General Hospital, Windham Hospital, Hospital of Central Connecticut, Charlotte Hungerford Hospital, and Milford Hospital, lost money.
The data shows it didn’t matter whether the hospitals were part of a larger hospital network. St. Vincent’s in Bridgeport, which is part of Ascension Health, and the Hospital of Central Connecticut, which is part of Hartford Healthcare’s system, lost money.
However, the Malloy administration says it’s not necessarily fair to compare the 2015 data to the 2014 data because all of the financial information isn’t available yet.
Individual hospitals’ income from operations has gone from $303 million in 2011 to $425 million in 2015, and their total revenue over expenses has gone from $354 million in 2011 to $440.6 million in 2015.
So even though eight hospitals have had losses, the numbers don’t yet tell the whole story.
But in general, “if certain hospitals have a problem, then relief should be addressed to certain hospitals,” Malloy said Wednesday. “If others hospitals don’t have a problem why are we addressing that especially with taxpayer dollars?”
Robert Smanik, president and CEO of Day Kimball Healthcare, cornered Malloy outside his office Wednesday with dozens of hospital employees.
Malloy asked Smanik how much money his hospital lost this year.
Smanik said it’s about $6 million.
“We have two hospitals that made a half-billion,” Malloy said, to which a Day Kimball employee responded “then go after them.”
Malloy suggested that was one way to look at the situation.
The state recently announced it wouldn’t be releasing the inpatient supplemental pool or the small hospital pool of money until it deals with “this fiscal year’s budget deficit.” That means the state is cutting the reimbursement rate to hospitals by about $141 million, of which $111 million comes from the federal government.
Hospitals were asked as part of the budget to pay $556 million in taxes and they were expected to get $256 million back.
“I’m prepared to have a solution for the hospitals, but I’m not prepared to send money to hospitals until we have a solution,” Malloy said.
Jennifer Jackson, president and CEO of the Connecticut Hospital Association, said every hospital in the state has to make some margin of profit in order to continue to invest in their infrastructure.
Griffin Hospital President and CEO Patrick Charmel said the way the state is taxing hospitals is impacting the industry and making it difficult for them to fulfill their mission and serve the residents of Connecticut.
At a press conference hosted by the Connecticut Hospital Association, Charmel warned a room of supporters and lawmakers not to buy into the rhetoric that hospitals are making a “significant profit.”
Charmel said hospitals are not making excessive profits and the tax is undermining their financial viability in Connecticut. He said that message was delivered to the governor and lawmakers last year, and it was dismissed.
The aggregate profit for the 25 hospitals reporting their information to the Office of Health Care Access was about $300 million for 2015, Charmel said. The impact of what’s happening this year because the state is not returning some of the hospital tax payments to the hospitals is about $280 million.
“That’s essentially wiping out the entire profit of an industry that’s critical to the well-being of the state of Connecticut,” Charmel said.
He said a profit margin of 3 to 4 percent is necessary upgrade facilities.
“If we have no profit, we have no future,” Charmel said.
Malloy said his staff hasn’t had enough time to analyze the 2015 numbers and decipher exactly what they mean for the financial health of Connecticut’s hospitals.
Hospital executives also said they feel trapped by other decisions the Malloy administration has been making.
Malloy signed an executive order last month that puts a moratorium on hospital mergers.
“If they can’t merge, if they can’t be acquired, what are they going to do?” Charmel said of the smaller hospitals losing money. “If you’ve taken away their profit, you’ve diminished their cash balances and they have no way to survive unless there’s an infusion but nobody can help them, help me understand what we’re supposed to do.”