When Governor Malloy proposed his bait and switch “provider tax” strategy he promised hospitals that they would be “held harmless.” The goal he said was simply to maximize federal reimbursement rates.
But two years later, the impact of Malloy’s decision to renege on that promise is leading to massive layoffs and undermining many of Connecticut’s hospitals.
The news headlines have been shocking;
“The state’s 30 acute care hospitals have shed 1,400 jobs in the past year”
“Hartford HealthCare is eliminating 350 jobs”
“Nearly 70 positions at The William W. Backus and Windham hospitals will be eliminated”
“List shows 176 Connecticut layoff notices so far (Norwalk Hour)”
“116 positions will be eliminated as a result of state budget cuts (Danbury News-Times)”
St. Francis Hospital and Medical Center is reducing the staff at its pediatric and adolescent clinic
“The layoffs announced Monday are the second round in the last seven months. In November, Hartford HealthCare laid off 179 employees, including 10 each at Backus and Windham.”
So why are people being thrown out of their jobs when access to quality healthcare is more important than ever?
Malloy’s “provider tax” budget gimmick is a major factor.
When Malloy proposed his $1.5 billion tax increase in 2011, the plan also included an additional $350 million “provider tax” on hospitals. Malloy claimed it wasn’t really a tax because the hospitals would get all the money back and the federal government would reimburse the state for a portion of that money.
Of course, to the self-pay patient, it was a tax.
And to the health insurance company it was yet another cost to be passed on to the people who pay for health insurance.
But the General Assembly approved Malloy’s plan anyway.
As part of his state budget coverage, CT Mirror’s Keith Phaneuf wrote last year,
“And then there’s really bad news: Gov. Dannel P. Malloy would cut their state funding by one-fifth over the next two years.
Put it all together, hospitals say, and at best, they will cut jobs and services. At worst, some will shut their doors. And facilities in the state’s poor northeastern corner say they are particularly at risk.”
The fact is that while the Malloy administration did pay the hospitals back the first year, his budget REDUCED the amount Connecticut hospitals received by about $27 million in the second year, $134 million the third year and $269 million in this year’s budget.
Overall, as a result of Governor Malloy’s budget strategies, while hospitals are being paid for additional Medicaid services, the State of Connecticut has reduced funding for its 32 chronic care hospitals by about $400 million dollars in the last two years alone.
The massive number of layoffs are proof that the “chickens are coming home to roost.”
And, none of this is a surprise to Malloy and the legislature.
As the Vice President of the Connecticut Hospital Association said,
“In short, what started 18 months ago as a scheme to help balance the state budget … has been converted to an unadulterated tax on hospitals…It’s one thing not to help hospitals, it’s something completely different when you harm hospitals. “Taking patient care revenue to balance the state budget is just plain wrong.”
The state cuts to hospitals garnered some notoriety last spring when Malloy lost his temper on the WNPR radio show, “Where We Live,”
The CT Mirror reported at the time,
When Malloy appeared on May 6 on WNPR’s public affairs show “Where We Live,” he responded quickly when host John Dankosky asked about the hospital funding reductions the governor’s own budget staff wrote about in his budget.
“Let me stop you right there,” Malloy told Dankosky about four minutes into the program. “There aren’t cuts to hospitals.”
The administration insists that while the hospitals lose $400 million in tax reimbursements, they will make it back. But to do so, hospitals will have to treat thousands more poor patients covered through Medicaid.
“It is time for people to trim their sails, to find ways to deliver great service at less expense,” the governor said, adding that all hospital-related state spending should be $1.7 billion next fiscal year, just as it is this year. “We’re not cutting, we’re funding.”
What Malloy forgot was the evidence of the cuts was part of his own budget documents.
Again quoting the CT Mirror,
When the administration unveiled its latest budget plan in February, it initially referred to those changes in hospital reimbursements as spending cuts.
“The decision to reduce hospital funding was not an easy one,” the governor’s budget introduction states.
While the overall policy is rather complex, the impact has been pretty simple. The way Malloy has handled the state budget is a primary factor behind the hospital layoffs that are taking place across the state.
The families that are being devastated by these hospital layoffs and the communities being impacted by reduced levels of services should tell Governor Malloy that at the very least, he must take responsibility for the actions he took that are now leading to many healthcare workers losing their jobs.
You can read the CT Mirror’s coverage of this issue here: http://ctmirror.org/hospitals-warn-budget-cuts-will-cut-jobs-and-services-maybe-close-doors/ and here http://ctmirror.org/semantics-malloys-no-tax-pledge/