Medicaid cuts in Connecticut apparently dashed hospital deal

Connecticut's slashing of Medicaid dollars to hospitals in an attempt to balance its budget has claimed at least one hospital deal as collateral damage, according to the Hartford Courant.

The stalemate between Gov. Dannel Malloy (D) and Connecticut's hospitals over tens of millions of dollars of Medicaid funds scuttled a potential deal for the Hartford HealthCare (HHC) hospital system to take over financially struggling Day Kimball Hospital, the newspaper reported. That facility lost $5.4 million last year.

"This reckless slashing of Medicaid funding makes it difficult for HHC to create a path forward with Day Kimball Healthcare right now. Both our organizations have just taken a gut punch," James Blazar, senior vice president, told the Courant.

An official in Malloy's administration said that HHC has earned about $800 million over the past five years, making any claim of financial duress due to lack of Medicine funding "a bit outrageous."

HHC, which operates several hospitals in Connecticut, has focused in recent years on tightening its middle management in order to improve patient satisfaction and reduce hospital-acquired infections.

Malloy cut $63 million in state Medicaid funding as part of a plan to close a budget shortfall of about $103 million. But those disappeared funds also canceled matching federal funds, and the Connecticut Hospital Association said the total loss would be about $192 million. That lobby has unsuccessfully pushed Malloy to reverse some of those cuts to maintain patient care.

It's the second hospital deal in Connecticut that fell through this year after what the parties said was too much interference from the state. In February, Tenet Healthcare Corp. pulled out of a deal to purchase five financially troubled hospitals after it said the operating conditions imposed by the Office of Health Care Access were too onerous.

Officials with Day Kimball told the Courant they would explore other potential options.

To learn more:
- read the Hartford Courant article (subscription may be required)