Graph from the Kaufman Hall report

Last year was the worst year for Connecticut’s hospitals since the COVID-19 pandemic began, the Connecticut Hospital Association said Tuesday. 

The association is backing it up with numbers from their own report and an independent study from Kaufman Hall. 

From dramatically increasing costs, staffing shortages and sicker patients, the Connecticut Hospital Association faced revenue challenges that caused the acute care hospitals to lose $164 million. That means they brought in less money than they spent. 

Hospital expenses in 2022 outpaced revenues by about 1%. In 2019, hospitals had an average operating margin of 4.6%.

“Since the spring of 2020, Connecticut hospitals and healthcare workers have seen challenge after challenge,” Jennifer Jackson, CEO of the Connecticut Hospital Association, said. “From the COVID-19 pandemic to new hurdles of treating sicker patients than before the pandemic and significant financial hardships, hospitals continue to provide high-quality care to everyone who walks through their doors, regardless of ability to pay, with a dedicated but smaller workforce who are exemplary but exhausted.”

Susan Martin, chief financial officer of Middlesex Hospital said in just the first four months of this fiscal year the cost of medical supplies alone have increased 10% over the same time period past year. 

“We have very limited ability to recoup these costs through our reimbursement,” Martin said. “Compounding all of this is significant underpayment by the government payers.” 

While hospital margins are generally small, “There is no mission without a margin,” Syed Hussain, senior vice president and chief clinical officer at Trinity Health of New England, said. 

The association said there are consequences to these issues, but they didn’t necessarily ask Gov. Ned Lamont’s administration for anything. 

Jackson said they haven’t asked the state for a specific dollar amount because a lot of what they need is investments in the workforce. They are looking at a shortfall of over $2 billion this year. However, the association has opposed some of the changes to the health care system proposed by Lamont, like eliminating facility fees and capping out-of-network costs, “which is just going to give the insurance industry the upper hand in negotiations,” she said. 

Chris Collibee, a spokesman for the governor’s budget office, said, “The governor is committed to driving down the cost of healthcare for our residents while improving the quality of care they receive. Hospitals and insurance companies must be a part of the solution. We look forward to ongoing conversations that achieve those goals.”

Jackson said they are also opposed to staffing ratios. 

“We don’t think the intention of the governor or others making proposals is to strain hospitals and health care systems, but that’s what these policies would do,” Jackson said. 

She said they could be forced to curtail services so there are consequences to further harming hospitals financially, but wants to focus on what will improve the situation. 

“We definitely need to address Medicaid underfunding,” Jackson said. “Rather than policies that would take money out of any industry we think that is experiencing financial hardships we really need to look at a Medicaid system that addresses the underlying costs of poor health and inequities.” 

Jackson said hospitals lost $1.1 billion on Medicare patients and $993 million on Medicaid patients. 

She said there’s no danger of hospitals closing today or tomorrow, but they do need to be concerned about what’s down the road. 

“There’s only so long you can go with having a negative margin,” Martin said.