In the face of mid-year Medicaid cuts enacted by the Malloy administration, Hartford Healthcare informed managers this week that it’s cutting its capital projects budget by 27 percent.
The $55 million cut comes out of a total capital budget of $206 million, and erases the $55 million impact of the state cuts announced in September.
After the outcry, Malloy walked back some of the cuts earlier this month, but only for smaller hospitals.
The capital budget cut comes several weeks after the five-hospital system announced it was cancelling its planned merger with Day Kimball Healthcare, because of the state cuts.
On Thursday, the system held a topping-off ceremony for its $110 million bone and joint institute (BJI).
Slated to open late next year, the project will continue, despite the cuts, Jeffrey A. Flaks, the system’s chief operating office, wrote to managers on Monday.
“With this unexpected cut, we cannot afford our planned expenditure level. Even as we advocate for this Medicaid payment cut to be restored, we want you to know that we remain committed to creating a strong future for those we serve, and for all who work here,” Flaks wrote. “Certain capital projects are critically tied to our success, and we will stay the course on these investments.”
Other investment priorities on which Hartford Healthcare will stay the course include its Center for Education, Simulation and Innovation, and increasing access to its growing ambulatory network.
Flaks’ letter did not disclose where the system might delay capital projects, but Flaks said emergency capital funding would be available for any project with a safety imperative.
Joseph: State has lost its way
During remarks at Thursday’s topping-off ceremony, Hartford Healthcare CEO Elliot Joseph said he feels the state doesn’t understand that health care is an economic engine.
He said the sector represents 10 percent of Connecticut’s GDP and 13 percent of its employment base.
“You don’t have to be an orthopedic surgeon to figure out that we can build an economic engine in health care if we put our minds to it, public and private sector,” Joseph said.
Hospitals have pushed for the legislature to call a special session, in the hopes more of the September cuts might be restored. Gov. Dannel P. Malloy called for bipartisan talks Monday, saying he thought Republicans were bluffing that they had other solutions to the state’s worsening budget situation.
“We will be calling on you for your help and advocacy on our behalf,” Joseph told the crowd of doctors, nurses and officials. “There’s a lot more to follow.”
Asked for comment Friday morning on HHC’s capital-budget reduction and Joseph’s remarks, Malloy’s office declined to comment.
Since September, the Malloy administration and top Democrats have criticized executive pay and budget surpluses, particularly at larger Connecticut hospitals.
Earlier this month, in alleging that the Hartford Healthcare-Day Kimball merger cancellation was a tactic, Office of Policy and Management spokesman Gian-Carl Casa said this of hospitals’ complaints about funding cuts: “Highly compensated executives are telling Connecticut taxpayers to supplement and subsidize the hospital corporation’s high salaries and extraordinarily positive revenue margins,” Casa said. “Hartford Healthcare is doing more than fine, and it’s wrong for them to ask taxpayers to foot the bill.”
Hospitals have disputed that line of reasoning, arguing that they need to bring in more revenue than expenses so they can invest in their operations.
