Competing forces put Connecticut hospitals in difficult position

Reduced Medicaid reimbursement and increased net taxes are pushing Connecticut's independent hospitals to join larger systems, but these hospitals are left with few options due to new restrictions on health system growth in the state, according to The Connecticut Mirror.

Over the past five years, the net taxes Connecticut hospitals pay have jumped by nearly $400 million. At the same time, the state has cut Medicaid reimbursement for certain services. Adding to hospitals' financial strain, Connecticut Gov. Dannel P. Malloy's administration delayed approximately $140 million in payments to the state's acute care hospitals in early March.

To ease financial pressure, some independent hospitals in the state are interested in partnering with larger systems. However, those plans were put to rest in February, when Gov. Malloy issued an executive order instructing the Connecticut Department of Public Health to push back final decisions on big hospital deals until 2017.

"It's the proverbial rock and hard place, particularly for us as a small community hospital," Brian Mattiello, vice president for organizational development at Charlotte Hungerford Hospital in Torrington, Conn., told The Connecticut Mirror. Charlotte Hungerford announced it had taken the first step toward affiliating with Hartford (Conn.) HealthCare just hours before Gov. Malloy issued the executive order.

Hospital leaders in the state are upset by the uncertainty in the Connecticut healthcare market.

"The state can't have it both ways," William Stanley, vice president for development and community relations at New London, Conn.-based Lawrence + Memorial Hospital, told The Connecticut Mirror. "You can't continue to cut hundreds of millions in Medicaid reimbursement, withhold federal payments to the hospitals that are supposed to come as a result of the hospital tax, and then expect there not to be any repercussions at the other end. It's just mathematically impossible."

The proposed affiliation between Lawrence + Memorial Hospital and Yale-New Haven (Conn.) Health System is delayed until 2017 under Gov. Malloy's order.

Hospital leaders are now exploring how to move forward. Charlotte Hungerford hopes to get an exemption to the executive order, while Yale-New Haven Health System is "continuing to look at all options in play," and reviewing all legal and legislative options, a spokesman for the system told The Connecticut Mirror.

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