With an intensification in the standoff between the hospitals of the state and Governor Dannel P. Malloy, Hartford HealthCare (HCC) was backed away quickly from a merger deal with a troubled hospital located in Putnam and blamed the latest round of cuts deployed by the governor for doing so.
Claims and counter-claims of both sides
James Blazer, a senior vice president of Hartford Healthcare who oversees strategy said that the massive slashing of Medicaid funding has made it tough for HHC for pursuing the merger deal with Day Kimball Healthcare immediately.
Dannel’s administration was equally quick to declare the announcement made by Blazer over who is the actual victim, taxpayers or hospital. The ongoing battle of public relations seems to be taking an ugly turn.
The undersecretary in the budget office who deals with legislative affairs wrote an email with respect to Hartford HealthCare’s backing out from the merger deal. Gian-Carl Casa wrote that while Harford HealthCare has all the rights as far as deciding whether to work with Day Kimball Hospital or not, its claims seem to be outrageous as the facility has earned more than $800 in the last five years.
Concern among hospitals
The real cause of concern for hospitals is an announcement made by Malloy in the month of September for a slash of $63 million in the spending of Medicaid at the various hospitals. This was part of the plan for cutting emergency spending amounting to $103 million in total. A lobbing association that has been representing the hospitals said that the total cut would be about $192 million as federal reimbursements would be lost in the process.
Hartford HealthCare is the parent body of Hartford Hospital along with many other hospitals and is a non-profit organization while some of its subsidiaries also are operating for-profit. The group, as a whole, had a surplus of $346 million in 2013 with a margin of about 13.8 percent.
The hospitals feel that there is a need for about 4 percent as margin for their reinvestment in latest technology and buildings. Officials of Hartford HealthCare claim that most of the surpluses reported in the recent year were the outcome of accounting changes only and did not resulted in cash inflow.
Robert Smanik, CEO of Day Kimball, said that the company was disappointed that the recent budget cuts had affected the ability of HHC to work toward a merger this time and partnering with the latter would have been a big opportunity for benefits of the patients, as well as, for strengthening the finances of the hospital.