🔒Challenging hospital pay won’t solve budget crisis Saving Hartford Club a good sign

Gov. Dannel P. Malloy has gone to war with the state’s hospitals, accusing healthcare executives of essentially being corporate fat cats.

When hospitals complained about Malloy’s plan to cut an additional $63.5 million in Medicaid funding to sure up the state’s ailing budget, the Democratic governor shot back, arguing nonprofit hospitals are swimming in profits, while their executives are reaping multi-million dollar salaries.

It is true, hospitals are coming off a very good year, posting a collective $916 million surplus in fiscal 2014. Hospital executives also do get paid well, with salaries and fringe benefits that, on average, cross the million-dollar threshold. But Malloy and other hospital-pay critics haven’t fashioned an evidence-based argument indicating Connecticut hospital executives are overpaid.

In fact, an analysis last year by Modern Healthcare found that the average U.S. nonprofit hospital CEO made $2.2 million in 2012; Connecticut hospital CEOs saw average salaries and fringe benefits total about $1.1 million in fiscal 2014, well below the 2012 national average.

Malloy’s focus on hospital pay is pure politics and misguided. Cutting hospital executive pay won’t solve the state’s budget crisis, which has been created by decades of irresponsible spending decisions by state lawmakers. Hospitals need to attract the best and brightest executives to manage one of the most complex industries in the country.

Malloy, however, is correct to go after healthcare spending as a way to help the state save money. State government is a major payer of health care and it should play a role in pressuring hospitals to lower their overall cost structure.

The difficult part, of course, is determining where the line must be drawn before budget cuts drastically undermine hospitals’ ability to adequately care for patients. The Malloy administration, which has targeted hospitals for budget cuts on several occasions, believes healthcare institutions still have more fat to trim. Hospitals, on the other hand, are crying “uncle,” warning of cuts to staffing and services that will hurt patient care.

Malloy and the state’s hospitals must work together to find a happy medium.

This week, cheers go out to Alan Lazowski, chairman and CEO of LAZ Parking, and Henry M. Zachs, a local realty investor and CEO of Message Center Management, who led a group of about 40 investors to save The Hartford Club from foreclosure and potential extinction.

The two Hartford businessmen and group of club members recently purchased the club’s mortgage from Berkshire Bank, which had previously foreclosed on the $1.1 million debt. The financial lifeline will mean The Hartford Club, a venerable downtown institution whose heyday admittedly passed decades ago, remains open, preserving an institution that still serves as an important meeting place for local businesspeople.

The strength of a city can be measured, in part, by the community involvement and investment of its businesses. The Hartford Club’s struggles throughout the last few decades were reflective of Hartford’s own economic malaise. The fact that business leaders stepped up to save it underscores the sense of optimism that has begun to permeate downtown Hartford in the last few years.

The Hartford Club said it has seen an uptick in membership and restaurant business in 2015. We hope that positive momentum continues, particularly as more businesses consider making downtown Hartford their home base. n