Representative Mary Eberle

Commission on the Future of Hospital Care in Connecticut

Contents

Commission on the Future of Hospital Care in Connecticut

Executive Summary

In 2000, amid growing concerns about the financial stability of the state’s hospitals, the CT General Assembly created a commission to investigate in-depth issues facing hospitals and make recommendations to ensure the long-term health of these critical safety net institutions.

Connecticut’s hospitals are not alone in facing serious, quickly shifting challenges. While managed care reduces admissions and lengths of stay for relatively healthy patients, the average hospital patient has more numerous and more complex health problems.

Connecticut’s hospitals are slowly recovering from a period of financial difficulty over recent years. Revenues were sharply reduced by both private and public payers. While private payer pressures will likely continue, public payers have provided relief. Nationally, Wall Street predicts recovering margins, Medicare rate stabilization, and improved credit ratings for hospitals. An increasing climate of corporate integration among hospitals and the concentration of ownership and control will come under increased government scrutiny to ensure competition and full access to specialized services.

Connecticut’s hospitals face serious challenges including significant health care workforce shortages, reduced Medicare rates, Medicaid rate shortfalls, increasing pressure from government and private payers to both improve quality and reduce costs, increasing pharmacy costs, continuing tight capital markets, new regulation of electronic transmissions of information and privacy restrictions, fragmented data systems reporting to multiple state agencies, growing numbers of uninsured patients seeking care, increased demand on emergency departments, a severe lack of capacity in the state’s behavioral health treatment system, increasing malpractice and other liability costs, and potential bioterror threats. As the state and national government budgets move from surpluses to deficits, the ability to support hospitals will be tested.

In response to this information, the Commission made a series of recommendations to strengthen CT’s hospitals in the areas of workforce, quality of care, financial & organizational issues, and access to care.

Commission structure, process and mission

In 2000, Connecticut’s hospitals faced serious challenges. Many were losing money for the first time, Winsted Hospital had already closed, and others were said to be in danger of closing. Connecticut was experiencing its first conversion of a hospital to for-profit status.

The Commission on the Future of Hospital Care in Connecticut was created under Special Act No. 00-12 to review the status of Connecticut’s hospitals, including financial stability, system capacity, access to care for Connecticut residents, the impact of public and private funding trends, relationships between hospitals, workforce issues, and new technologies. The Commission is to make recommendations to strengthen Connecticut’s hospital system and residents’ access to care.

The Commission has seventeen members, including legislators, state agency heads, hospital representatives, third party payers, unions, and physicians. Senator Toni Harp and Representative Mary Eberle served as Co-Chairs. The Commission met thirteen times between July 24, 2000 and February 4, 2002. The Commission issued an Interim Report on January 8, 2001.

The Commission invited a number of presentations from the Departments of Public Health (DPH), Children & Families (DCF), Mental Health & Addiction Services (DMHAS), and Social Services (DSS), the Office of Health Care Access (OHCA), the US Centers for Medicare & Medicaid Services (CMS, formerly the Health Care Financing Administration), the Connecticut Hospital Association, the Connecticut Health & Education Facilities Authority, Hartford Hospital, the Eastern Connecticut Health Network, St. Francis Behavioral Health, Hall-Brooke Hospital, Natchaug Hospital, the Lewin Group, Ernst & Young, and the Attorney General’s office. After collecting information about the status of Connecticut’s hospitals, the Commission divided into four workgroups to focus on specific challenge areas and make recommendations. The workgroups included both Commission members and other stakeholders invited to participate. The Accessibility of Care Workgroup was chaired by Senator Harp and Michael Meacham of the Eastern CT Health Network assisted by Christopher Hartley of St. Francis Hospital. Representative Mary Eberle chaired the Financial & Organization Issues Workgroup. The Quality of Care Workgroup was chaired by Representative Vickie Nardello and Dr. Edward Kamens. The Workforce Issues Workgroup was chaired by Representative Dennis Cleary, Marc Lory of the Eastern CT Health Network and Jean Morningstar of University Health Professionals.

The workgroups completed their analysis and made recommendations to the Commission, which were adopted with minor modification. Commission and workgroup membership lists, workgroup issue areas, meeting minutes, and the Interim Report are included in the Appendix.

Status of Connecticut’s Hospitals

Hospital Spending

In 1998, the last year for available data, Connecticut spent $4,798,000,000 or $1,478 per person on hospital care, from all payers.[1] This amount has been rising each year.

	Source: Center for Medicare and Medicaid Services

 

In 1998, hospital care consumed 31.3% of all CT personal health care spending, down from 44.5% in 1980.

The proportion of CT’s health care dollar that is spent on hospital care is declining.

	Source: Center for Medicare and Medicaid Services

 

While costs for CT’s hospital care have risen over time, they grew at only two thirds the rate of growth in CT’s total personal health care spending from 1981 to 1998. However, nationally in 2000 and 2001 increases in hospital spending has become the key driver of overall health care cost growth, accounting for more than half the total increase in costs. Hospital spending has outpaced other areas, including prescription drug spending growth, which declined in both 2000 and 2001.[2] Hospital spending growth rates are expected to stabilize over the next ten years.[3]