Proposed state budget would require hospitals to lay off staff, reduce services [Danbury News-Times]

May 24, 2013

Danbury News Times editorial

Thursday, May 23, 2013

Hospital officials across the state are up in arms over Gov. Dannel P. Malloy’s plan to significantly reduce funding to hospitals in his proposed two-year budget.

And for good reason.

The governor’s fiscal plan for July 1, 2013, to June 30, 2015, which is now under consideration by the Legislature, would slash $550 million in state reimbursement to Connecticut hospitals for care of individuals without health insurance.

The Western Connecticut Health Network — the umbrella entity for Danbury Hospital and New Milford Hospital — would absorb a $30 million hit, which WCHN President and CEO John Murphy claims would be “devastating” to the network.

We recognize that Malloy faces a difficult challenge as Connecticut tries to crawl out of a major deficit hole in a slowly recovering economy, and he needs to try to save every nickel he can on the expense side of his budget.

As part of that effort, we believe all members of the Connecticut community, including hospitals, need to help share the burden.

And we believe hospitals must come up with creative game plans for reducing healthcare costs while continuing to provide quality care.

But a $550 million reduction in funding to hospitals is draconian, and hospital officials across the state, including Murphy, are predicting staff layoffs, reduced healthcare services and a blow to the economy of the communities in which the hospitals are located.

There are myriad arguments on both sides of the fence, including the contention from the governor’s team that hospitals will be able to realize sufficient revenue increases when the Affordable Care Act — Obamacare — kicks in next year and more people have health insurance.

Murphy and other officials strongly contest that claim, saying those revenues will come in at the lowest reimbursement levels and won’t cover the cost of care provided by their facilities.

The reality, too, is that the state’s hospitals have already been helping pick up the tab created by state and federal budget woes.

The Western Connecticut Health Network lost nearly $5 million last December in reduced funding as part of a state deficit mitigation plan, and it will be out another $4 million due to the impact of federal sequestration.

The network has been aggressively cost-cutting along the way, too. It conducted back-to-back rounds of layoffs the last two Septembers that reduced staff by 158 full-time equivalents — 139 in Danbury, 19 in New Milford — and eliminated another 101 vacant positions.

WCHN officials are creating a contingency plan that would be carried out if the state indeed does reduce funding to the network by $30 million — $27 million in Danbury, $3 million in New Milford — in the upcoming budget.

Murphy, who still hopes it won’t come to that, says the plan would include the layoff of up to 300 FTEs and the curtailment of some healthcare programs.

We are hoping it won’t come to that, either.

We call on the governor to rethink his original proposal, to keep an open dialogue going with hospital officials, and to work with the Legislature to come up with a different approach.

The proposed cuts would simply have far too great a negative impact on the state’s hospitals, their staffs, their patients and their host communities.