Hospital CEOs Decry Budget Cuts; Malloy Administration Dismisses Criticism [Hartford Courant]

Article as it appeared in the Hartford Courant

HARTFORD — Hospital CEOs joined with Republican lawmakers at the Capitol Tuesday to demand a rollback of budget cuts ordered last week by Gov. Dannel P. Malloy.

“Even the basic care delivery that we’re providing now is at risk because of these cuts and the cuts that preceded [them],” said Patrick Charmel, president and CEO of Griffin Hospital in Derby, which is bracing for a $3.627 million reduction.

The hospital chiefs were reacting to the Malloy administration’s decision to pare Medicaid payments to hospitals by $63.4 million. As a result of that cut, the hospitals stand to lose an additional $130 million in federal revenue, said Jennifer Jackson, CEO of the Connecticut Hospital Association.

The cuts would have a devastating impact on a health care industry already struggling with enormous upheavals, Jackson said, predicting longer wait times, gaps in patient care and layoffs at hospitals. “This is a crisis situation,” she said.

Hartford HealthCare, which recently eliminated 335 positions, citing earlier rounds of state budget cuts, has established a website for f the public to send a form letter to lawmakers. “Gov. Dannel P. Malloy’s decision to slash Medicaid payments once again will hurt patients and the state’s economy,” said Elliott Joseph, CEO and president of the health care system, which includes five major hospitals: Hartford Hospital; William W. Backus Hospital in Norwich; the Hospital of Central Connecticut in New Britain and Southington; MidState Medical Center in Meriden; and Windham Hospital.

“In all, Hartford HealthCare stands to lose an additional $41 million — all through the stroke of the governor’s pen on a Friday afternoon, without any consultation, discussion or vote,” Joseph said. “The sudden and unexpected nature of this latest cut speaks to the absolutely reckless fiscal policy of Connecticut.”

The hospital cuts are part of a larger, $103 million reduction in state spending brought on by concerns over recent stock market downturns and projections of lower tax revenue.

Senate Republican leader Len Fasano said the cuts ordered by Malloy last week, coming so soon in the new fiscal year, point to a lack of planning. “Less than three months into a new, two-year budget, it is already out of balance and showing a deficiency,” he said. “It doesn’t bode well, not only for the rest of this fiscal year but in fact for the next two years.”

Medicaid Cuts Will Hurt The Vulnerable

Fasano, of North Haven, and other Republicans are pressing for a special session of the legislature to reconsider the cuts.

“This is about the process of budgeting in the state of Connecticut and how doing it in a patchwork way, almost month to month … is not an effective or efficient way of doing it,” House Minority Leader Themis Klarides, R-Derby, said at a press conference with hospital officials.

House Speaker Brendan Sharkey of Hamden, who expressed concern about Malloy’s cuts last week, was unlikely to heed the call for a special session. “As we monitor the budget in the coming months, the full legislature will have the opportunity to reverse these cuts in the next regular session,” he said.

The Malloy administration has repeatedly sought to fend off criticism of the cuts by focusing on the salaries paid to hospital CEOs.

“It’s pretty clear what we saw at this press conference — House and Senate Republicans, standing with CEOs, asking taxpayers to subsidize multimillion-dollar salaries,” Malloy spokesman Devon Puglia said.

“That’s their message, that they want the residents of this state to fund tens of millions of dollars in executive compensation. The hospital industry made hundreds of millions of dollars in profit last year, with executive teams making money hand over fist. Put simply, while we’re taking smart steps to ensure budget balance and plan for the long term, some obviously want taxpayer dollars to fund massive CEO salaries without doing anything to make care delivery more efficient and cost-effective,” Puglia said.

Malloy’s Medicaid Cuts Irresponsible

And John Brady, a nurse who is executive vice president of AFT Connecticut, a union representing 10,000 health care workers across the state, also called on hospital CEOs to “lead by example, demonstrate shared sacrifice and put patients before profits.”

Jackson shot back at the critics. “It is true that executives in hospitals are well-compensated and I hope so,” she said. “We need to be able to attract and retain the most capable and the brightest executives to run institutions that are literally a matter of life and death, 24 hours a day, every day of the year.”

Discussions about executive compensation are “not significant to the overall conversation,” Jackson added. “This state also provides tax breaks to corporations whose executives make multiples of what hospital CEOs make.”

Senate President Martin Looney of New Haven urged Malloy to reconsider the reductions. “I am deeply disappointed in the cuts made to hospitals and Medicaid reimbursements,” he said. “These cuts will have a multiplier effect — jeopardizing federal reimbursements — adding to my concerns about the financial viability of the smaller, community-based hospitals with potentially devastating impacts on patient care and the workforces of these facilities that are in many cases the largest employer in a community.”

But even Looney, who expressed sympathy for the hospitals’ predicament, raised the issue of executive compensation.

“We will continue to look elsewhere for cost savings in hopes of protecting our hospitals. As we engage in this process, I would urge extraordinarily well-compensated hospital CEOs and other top executives to look for cost-saving measures that do not affect critical patient services or levels of employment,” he said.