Budget cuts to hospitals to have 'devastating' impact on ECHN

By Christian Mysliwiec - Staff Writer
Manchester - posted Thu., Feb. 28, 2013
ECHN stands to lose $12 million in funding over the next three years if Gov. Dannel Malloy's budget is passed as proposed. Photo by Christian Mysliwiec.
ECHN stands to lose $12 million in funding over the next three years if Gov. Dannel Malloy's budget is passed as proposed. Photo by Christian Mysliwiec.

As legislators are in the process of deliberating Gov. Dannel Malloy's proposed budget, constituents across the state are voicing their concerns about how the governor plans on closing the state's $1.2 billion gap. Among the most concerned groups are hospitals. According to the Connecticut Hospital Association, the budget will cut up to $550 million to hospitals - $207 million in FY 2014 and $341.5 in FY 2015.

If the cuts are approved, ECHN faces a funding loss of more than $12 million. “That's a huge, huge piece of reimbursement from the state for the services we provide to the under-insured and uninsured population in our service area,” said Eric Brethel, director of corporate communications and marketing for ECHN.

ECHN is encouraging its employees – and the community in general – to reach out to their state senators and representatives explaining how the cuts will affect ECHN's two hospitals, Manchester Memorial and Rockville General Hospital, an effect that CHA has characterized as “devastating.”

“We are certainly on board with the advocacy program that the Connecticut Hospital Association has launched throughout the state,” said Brethel. A sampling of the cuts that CHA is concerned about is as follows:

The budget will reduce the disproportionate share (DSH) funding. Hospitals received $268.4 million in 2012, and will receive $134.2 million in 2014. In 2015, hospitals will receive no DSH funding.

Inpatient supplemental payments to hospitals will be reduced. In 2012, hospitals received $131 million; in 2014 and 2015, they will receive supplemental inpatient payments of $80.6 million.

The budget reduces the fee schedule for certain services under the Medicaid program, for reductions of $7.7 million in FY 2014 and $7.8 million in FY 2015. Under these reductions, reimbursements for medical equipment, devices, supplies and laboratories will be reduced.

Reduced fee schedules include hospice services and community-based physicians when the services are provided in a hospital or ambulatory surgery center. Reimbursements for non-emergency ambulance services will be eliminated.

Adults in the Medicaid program will be moved to the Connecticut Health Insurance Exchange, for a savings of $6 million in FY 2014 and $60 million in FY 2015. The move of Medicaid patients to the Connecticut Health Insurance Exchange program is particularly disconcerting to ECHN. Prompted by President Obama's healthcare reform, the program seeks to change how hospitals are paid for the Medicaid patients they treat, and it was recently announced that Connecticut would be one of the first states switching to the Health Insurance Exchange program. This initiative aims to make private insurance companies take on the responsibility of insuring Medicaid patients. The patients would be moved from Medicaid and put on a plan with an insurance company. When a hospital treats these patients, instead of being compensated by Medicaid, they would bill the insurance company, which is then compensated by the state.

According to Brethel, there was supposed to be a transitional period for this exchange to be fully-implemented, but the governor's reduction to hospitals will “fast-forward” this process. “It's like he's saying we should already be at the point where everyone is on those private insurance companies, and we're not,” said Brethel.

As the second costliest line item paid by the state of Connecticut (second to education), healthcare is an obvious target for broad cuts, explained Brethel. “It's easy for the governor to look at healthcare and say, 'There's so much money going there, there must be an opportunity to cut something,'” he said. The reality of the matter, Brethel said, is that hospitals across the state have already gone through a series of workforce and programming reductions over the past few years.

The cuts will damage ECHN services, which are spartan to begin with. “Manchester Memorial and Rockville General have the distinction of being [two] of the lowest-cost hospitals in the state,” said Brethel. “That begs the question: Does the quality suffer? No, we provide some of the highest-quality services in the state as well.”

With operations already so lean, he fears that there are no areas to absorb the upcoming cuts. That means that many workforce programs will suffer. Programs that have expanded hours to accommodate those who work during the day will see their funding disappear. “Things like that will have to be cut because we won't have the dollars to be able to provide those services,” Brethel said.

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