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Malloy To Hospital CEOs: ‘I Know You All Want More of My Money’

by | Mar 14, 2011 8:29pm () Comments | Commenting has expired | Share
Posted to: Health Care, State Budget

Gov. Dannel P. Malloy told Bristol Hospital’s President Kurt Barwis that he would trade his more than $7 billion deficit for Barwis’ $4 million deficit any day.

“I don’t have an easy answer for you,” Malloy told Barwis and the more than 50 hospital executives gathered Monday at the Connecticut Hospital Association for a face-to-face meeting with the new governor to go over some of his tax increases and spending cuts.

Barwis told Malloy his hospital will lose close to $4 million over the next two years under Malloy’s new hospital tax.

Malloy’s proposed budget eliminates $83 million in state funding hospitals receive for treating the uninsured and underinsured and tries to make up for it by implementing a 5.5 percent provider tax to raise more than $266 million in fiscal year 2012 and $269 million in fiscal year 2013.

The tax would then be matched at around 50 percent by federal funds and redistributed to the hospitals in a way that creates winners and losers.

Malloy said he understands he’s taking away the money for the underinsured and uninsured fund two years before it’s scheduled to disappear under federal reform, but he tried to make up for that with the provider tax proposal.

“I’d prefer perfect, but it’s not the set of circumstances I’m dealt,” Malloy told Barwis.

If hospital executives were expecting Malloy to sympathize with their situation, it didn’t happen. Malloy offered the executives glimpses at the reality and budget situation he has to deal with and perhaps hoped he would receive some sympathy from them too.

“I know you all want more of my money,” Malloy said. “No one has taken me up on my willingness to swap deficits so…but I think you all get it.”

“Everyone believes in shared sacrifice until it comes to them,” Malloy added.

But the Connecticut Hospital Association isn’t ready to concede their case.

After Malloy left to a standing ovation, the executives got to work devising a strategy to beat back the hospital tax through the legislative process. The strategy session was closed to the media, but based on a statement sent late Monday evening it doesn’t look likely that they will give up the fight, easily.

“Cutting hospital funding and imposing a hospital tax hurts all patients and communities, moving us all farther away from our mutual goal of building a healthier and economically strong Connecticut,“ CHA President and CEO Jennifer Jackson said in a statement. “We fully understand and recognize the difficult challenge he faces—balancing growing needs with finite and ever-dwindling resources—because, as discussed today, Connecticut hospitals have been engaged in the same balancing act for years.”

The Connecticut Hospital Association was able to defeat former Gov. M. Jodi Rell’s hospital tax proposal last year, but it’s unclear how much the Democrat-controlled legislature will seek to change Malloy’s budget proposal.

Sen. Toni Harp, D-New Haven, who co-chairs the Appropriations Committee, said she’s supportive of the hospital tax. In fact, Harp tried to implement her own version of it last year when the state would have received close to 60 cents on the dollar from the federal government for the proposal. This year, federal reimbursement rates are back down to the typical 50 cents on the dollar.

What’s hard for the hospitals to swallow is the unfairness of the tax.

Under Malloy’s proposed hospital tax everyone can’t be a winner.

Harp said federal law dictates that 75 percent can be winners, but 25 percent have to be losers, meaning they receive less back than they contribute.

She said the hospitals don’t like the tax because they can’t control what money is funneled back to them.

But hospital officials say these cuts to their bottom lines won’t heal anytime soon.

“These budget cuts threaten hospitals’ significant role as today’s safety net—caring for the most vulnerable among us—and seriously jeopardize our ability to invest in tomorrow,” one of their pamphlets says.

But Harp said under last year’s Medicaid changes hospitals did benefit by receiving more patients covered by health insurance, instead of the thousands without it.

Under Malloy’s budget since more low-income adults are covered by Medicaid, fewer individuals will be walking into the emergency room without insurance coverage, she has said.

Hospital officials dispute the claim saying they may have served more Medicaid patients, but what they received in terms of payment was 70 cents on the dollar. They said it was hardly a “windfall,” in terms of profits.

John Murphy, CEO of New Milford and Danbury Hospitals, asked if Malloy would be willing to do what New York Gov. Andrew Cuomo has done and set a cap on medical malpractice claims.

Malloy said flatly, “No.”

Malloy said the amount of money that would save in the first or second year of the budget is relatively miniscule.

He said clinging to an arbitrary $250,000 cap makes no sense at all and doesn’t allow for a discussion to take place in the state. “Beginning and ending the conversation at $250,000 is guaranteed failure,” Malloy said.

Murphy told him that’s what they’re looking at in New York and Malloy replied he hasn’t seen that legislature work on it yet, but “I wouldn’t hold my breath.”

Instead, Malloy encouraged the hospital executives to work in partnership with the federal qualified Community Health Centers. He said that’s a partnership that could help save them money by diverting some Medicaid patients or individuals with no health insurance which end up costing hospitals money.

“I think there are hospitals in this room that need to rethink their relationship with Community Health Centers,” Malloy said. “Honestly.”

He said he envisions a shifting of expenses for hospitals with those types of relationships, since the federal government pays for most of the care administered in those settings.

Malloy urged hospital leaders to look beyond their disappointments with this budget. He said they should start gathering support for it because it’s going to be the best budget they’re going to see.

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(8) Archived Comments

posted by: City Hall Watch | March 14, 2011  9:36pm

Arrogance and hubris are hardly trademarks of a good leader. Malloy exhibits both. Note to Malloy: It’s not your money. It’s ours. We are not asking for your money. We’re asking to keep ours. We didn’t create this problem. People like Toni Harp did. That’s right, the same people you appointed to top government posts with big salaries are the same people who packaged and passed all the spending that has gotten us in this mess.

posted by: ... | March 15, 2011  5:16am

...

“Everyone believes in shared sacrifice until it comes to them.” Greed and complacency have been a natural attribute to the CT resident. But we can change that.

The stat has seen dismal advancement over the past decade as the legislature spent more than they took in, and people asked for more of our govt. than what was possible without more spending. Each side failed our state.

One couldn’t bear the necessary cuts or taxes without loosing an election. So they went on as the debt crawled higher.

And the other side was unwilling to see services lost or pay more for them. So they grumble about taxes, but continued to see a high standard of living and state services.

The 2008-2009/10 Great Recession woke everyone up to spend within their means. But those with deficits/debt (personal or govt.) have had to suffer under cutting to their budgets or finding new ways (jobs/revenue) to get money.

We cannot, no, we should not demand one demographic to bear the burden of the entire state. We will all be grumbling and whining about these next two years.

But if the ends are a balanced budget, a majority of sustained services, and a less bloated government, then we are all obligated to share in this sacrifice. CT voters all played a role in the follow-up to this mess, especially those who ignored it, and now it is time we all put focus on this issue and fight with, as well as against Gov. Dannel Malloy for a better CT these next four years.

posted by: jonpelto | March 15, 2011  8:13am

Oh Dan,

We get the “talking points” - shared sacrifice - right - but CT’s hospitals are on the verge of collapse because the American health-care and health insurance systems suck. HMOs drive down payments, costs get shifted and hospitals don’t get the reimbursement needed for uninsured patients.

This isn’t some game of trading deficits – it’s a freaking crisis and trivializing people who raise concerns doesn’t help.

Come out to Eastern Connecticut and tell the people out here that their hospital will have to close because we can’t ask the wealthy to pay their fare share because they might get angry and move out of state.

posted by: City Hall Watch | March 15, 2011  9:51am

Jones:
Malloy’s comment that everyone believes in shared sacrifice until it comes to them is woefully inadequate in terms of capturing how we feel. I’m fine with cutting services, even cutting education funding. I could care less. I’ll fight that battle on the local front if they want to raise property taxes as the answer. From the governor’s office to local towns and cities, there is plenty of waste and inefficiencies to choke a horse. Superintendants making a quarter million a year, plus $125K a year in benefits plus a car; retiree consultants falling off the woodwork; commissions on women, minorities, jails we don’t need; state owned cars and cell phones for too many and a DSS budget that consumes 25% of the state budget.

Dan the Tax Man Malloy’s plan to temporarily balance the state’s budget by taking more money from mine now creates a problem for me and my neighbors. And remember, this is just the latest big buck tax hike. Two years ago, it was another billion. So, $2.5 billion later, do you really think this is the answer? Better think again.

posted by: meridenite | March 15, 2011  11:24am

Only in govt do you reduce how much you are giving someone then tax them three times more then the reduction you are giving them so you can get money from someone else(the feds) to give you less then you took away and taxed them.

posted by: OutOfOutrage | March 15, 2011  4:10pm

OutOfOutrage

Hey Dan, How about appointing a DOT commish. The budget roadshow can wait. You’ve got the 3rd string running the Berlin Tpke asylum!

posted by: ... | March 15, 2011  6:48pm

...

I would almost accept that pessimism and argument CHW if we had not been under Conservative leadership for 20 years and did not see fairly modest gains in the legislature this past (2010) election cycle in the state house.

It is also hard to agree with your first statement because I’ve watched the town hall meetings. Almost everyone who goes up says ‘I agree with what you’re doing, but don’t take it from my pocket’, whether it is public, or private sector work.

Proposed mergers to state agencies: ‘I like what Malloy is doing, but don’t do it to my agency’.

And even this article about cutting funding to hospitals: ‘Don’t do it to my hospital’.

We all want this problem solved by or blamed on someone else. The rich, the ‘entitlement class’, the state workers, etc.

And 2 years ago it was essentially a budget crisis that I don’t believe Rell even signed (just letting it go as it was), leaving the fate of the next budget for another set of shoulders to burden.Better think again CHW. There’s new blood in CT, both red and blue.

posted by: hawkeye | March 15, 2011  8:13pm

Hospital tax is sick! The next step, is to tax the cost of funerals.
 
The politicians that are approving this tax, should never be reelected.  They have no conscience!

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