As published as an editorial in the New Haven Register, April 3, 2007.

UConn’s Hospital Needs to Grow

But, impact of its growth on nearby hospitals must be considered.

On its own, the University of Connecticut has a compelling case for building a new 352-bed hospital. The present John N. Dempsey Hospital in Farmington is too small for the growing patient demand. New construction would be cheaper than a renovation and expansion.

Revenue from the hospital supports the operations of the rest of the UConn Health Center, including the medical and dental schools. Of the hospital’s 224 beds, 116 are restricted to less profitable or unprofitable services, including care of state prison inmates. And, the hospital’s pension and fringe benefits are substantially higher than private hospitals thanks to state mandates.

The result is the hospital’s revenues do not cover the health center’s academic costs. The red ink forced the legislature to appropriate an extra $20 million to bail out the hospital in 2000.

UConn’s solution is a new hospital with 352 beds that would produce more revenue. Five area hospitals fear the new hospital would grab their patients. They have good reason to worry. One of them, Bristol Hospital, had expenses that exceeded revenue by 2.4 percent for the three years through 2005. Bradley Memorial Hospital and Medical Center, which has since merged with New Britain General Hospital, was in a similar revenue hole. Hartford Hospital only showed a 1.3 percent margin of revenue over expenses for the three-year period.

All of the hospitals agree on one point, the state’s reimbursement rate for the treatment of indigent patients, about 61 cents for each dollar of care, has worsened their financial condition. Dempsey lost $10.5 million last year treating Medicaid patients.

The Hartford area hospitals rightly argue that UConn’s request for a new hospital cannot be considered in isolation. There should be a study of the region’s long-range need for hospital beds.

Rather than back bonding for a new $500 million hospital this year, the legislature is considering delaying a decision for a year while a needs study is completed. Instead, it would provide $10.5 million to meet the gap between expenses and revenue this year. The legislature needs the information from the study to avoid fueling a cutthroat competition among hospitals that might drive one of them out of existence or add to health care costs by unneeded construction. Dempsey Hospital needs to grow, the question is by how much. By next year, the legislature should have a clearer sense of the best course.