Putnam’s Day Kimball Healthcare and Hartford HealthCare are suspending affiliation talks in the wake of state budget cuts, citing “the reckless slashing” of state Medicaid funds.
In July, the two organizations announced an agreement to work towards a proposed affiliation. The immediate goal was to allow Hartford HealthCare to provide management support for select operations determined by Day Kimball to help reduce its cost structure.
“Given the magnitude of the state’s cuts, it would be imprudent for us to consider moving forward with such a partnership at this time,” James Blazar, Hartford HealthCare’s senior vice president and chief strategy transformation officer, said Monday in a statement. “This reckless slashing of Medicaid funding makes it difficult for [us] to create a path forward with Day Kimball Healthcare right now. Both our organizations have just taken a gut punch.”
Hartford HealthCare said, based on state estimates, it would stand to lose $55 million in the cuts and, as a result, needs to curtail major capital expenditures. Day Kimball expects the cuts to result in a $5.6-million loss in state funding to its revenue in this fiscal year.
“Partnering with Hartford HealthCare represented a real opportunity for us to benefit patients and strengthen our finances. We are disappointed that these budget cuts affected [its] ability to work towards this opportunity,” said Day Kimball CEO Robert Smanik. “In addition the budget cuts also caused Day Kimball to lose the small hospital funding that our legislators were successful in restoring just months ago.”
Gian-Carl Casa, spokesman for the state Office of Policy & Management, slammed the announcement as a tactic from hospital executives, saying that Hartford hospital has earned $850 million in revenue above expenses — which would be profit if the system weren’t a nonprofit — and doesn’t need to lash out at the state for making budget cuts.
“This means their 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.”
