Hospitals Continue to Make Cuts, and the State Continues to Defend its Budget

Jul 1, 2013

Hospitals are making cuts to programs and staffing following the passage of the new state budget. First, St. Francis Hospital and Medical Center in Hartford cut funding to a city infant mortality program. Then, last week, Waterbury Hospital announced it is cutting its workforce.

Both hospitals blamed the cuts on a decrease in state funding. Here's why. The state has reduced the amount of Medicaid money the hospitals will get to provide care for the uninsured. The explanation goes like this -- under the Affordable Care Act, more people will have insurance, and more people will therefore be able to pay their hospital bills. The state says the whole thing should be a wash in the end.

That's not how Stephen Frayne sees it. "The notion that we're going to have more funds as a consequence of the Affordable Care Act is just unequivocally factually wrong." Frayne is the vice president of health policy for the Connecticut Hospital Association, which represents 28 hospitals.

He says the state has already started reducing the amount of money it gives to hospitals. And over the next two years, the cuts gets worse -- leaving the hospitals with a roughly half a billion dollar hole. "It's more than half of all of our net income...that we would be otherwise using to reinvest back into the organization and to reinvest back into the community."

Ben Barnes is Governor Dannel Malloy's budget chief. He says everyone is sharing in the pain. Including hospitals. "There's no question they're getting less from the state than they would have had we not changed the law in order to save money."

Barnes says the state has tried to understand the perspective of the hospitals. But... "The amount of money that we spend on hospitals generally has been rising so quickly and has squeezed out so many other areas of state government spending that we felt that we needed to put the brakes on it, admittedly braking harder than would be ideal." Just how those brakes play out over the next few years will be one of the major ways to assess the success, or failure, of the Affordable Care Act.