By William M. Jennings
President and CEO, Bridgeport Hospital, and
Executive Vice President, Yale New Haven Health
Fiscal instability at the state and federal level continues to heap added pressure on Connecticut’s not-for-profit hospitals. During the past year, the situation has gotten worse, not better.
Congressional discussions around the threatened repeal of the Affordable Care Act (ACA) and even the tamer sounding “repair/replace” strategy, are keeping many hospital executives awake at night.
There is great uncertainty about what would replace the ACA, which extended health insurance coverage to millions of people, including some 200,000 in Connecticut, through an expanded Medicaid program and creation of state health insurance exchanges.
Many believe that block grants will take the place of direct payments to hospitals. The block grants would be given to the states, which would then distribute them to hospitals. As with other block grant programs, there is a danger the grant funds would be diverted to other state programs, based on the direction of governors and state legislatures.
Medicaid rate-leveling for inpatient stays and Medicare provider-based site rule changes for 2017 are a double dose of bad news for us. Add on the Governor’s latest proposal to allow municipalities to collect property taxes from hospitals, and it becomes a triple whammy.
Connecticut hospitals already pay $550 million in taxes to the state. Of that enormous amount, Yale New Haven Health pays nearly 40 percent– amounting to $200 million. An additional property tax burden would challenge many hospitals to sustain their current level of patient care services and staffing.
Remember, hospitals also provide millions of dollars in charitable care and community benefits. Bridgeport Hospital provided nearly $27 million in charitable care last year and absorbed a $33 million shortfall in reimbursements for the care of Medicaid patients.
Bridgeport Hospital and Yale New Haven Health began preparing early – and responsibly – for the implementation of the ACA. We looked at ways to reduce costs and enhance revenues, all while evidence-based clinical redesign initiatives enabled us to deliver high quality, patient-centered care more safely and efficiently. We have reinvested whatever operating margins we have earned into growing and adapting our services to meet the needs of our patients and communities. We continue to be a major employer in our community, providing crucial jobs and training programs. We help the city and state economy through the goods and services we purchase.
And how were we rewarded? We have endured steadily rising state taxes on our revenues and ongoing cuts in Medicaid and Medicare reimbursements. And now the threat of property taxes, too? The Governor appears to think that hospitals are the treasury through which he can fund a variety of other state programs and services, unrelated to healthcare.
Enough is enough. We need to stop taxing hospitals and stop the cuts to reimbursement programs that allow us to care for our sickest and neediest patients and find a responsible way to balance the budget.