As reported by The Hartford Courant, February 3, 2009.

UConn Health Center Hartford Hospital Merger May Require State Funding

By Arielle Levin Becker

A proposed partnership between the financially troubled University of Connecticut Health Center and Hartford Hospital could end the Health Center's recent practice of seeking state money to cover deficits, but would still require ongoing state funding for both bonding and labor costs, a report issued this morning says.

The details of the proposed merger, laid out in a report by the independent Connecticut Academy of Science and Engineering, will be unveiled in a presentation to legislators this morning.

According to the report, the proposed partnership includes:

  • Creating a "University Hospital" with two campuses, UConn's John Dempsey Hospital and Hartford Hospital.
  • Building a new, 250-bed hospital to replace John Dempsey Hospital. The state would pay the bonding costs for the project and the cost of any new equipment. In the past, the cost has been estimated at $475 million.
  • Maintaining Health Center employees' status as state employees, but having the state pay the difference between their fringe benefits costs and those of other hospital employees which amounts to millions of dollars a year.
  • Collaborating with other area hospitals to increase their involvement with UConn's medical and dental schools, with access to students, interns and residents and research.

The proposed partnership is intended to financially stabilize the UConn Health Center, which has relied on cash infusions from the state legislature to stay afloat in recent years, and could significantly change the healthcare landscape in the region. Under the plan, the UConn Health Center would be transformed from one of the nation's smallest academic hospitals into part of a major academic medical center.

Lawmakers have said the potential partnership faces several challenges, including reconciling the work forces of the unionized Health Center with the nonunion Hartford Hospital, understanding the effect of a partnership on other area hospitals, and merging two institutions with what lawmakers say are differing missions.

And this year's discussions come against the backdrop of a dire financial situation for the state, with projected budget deficits in the billions.

The UConn Health Center includes the state's medical and dental schools, research laboratories and the 224-bed John Dempsey Hospital.

Dempsey Hospital is considered too small and too outdated to be viable on its own. But its location in the prosperous Farmington valley offers an advantage in attracting patients with private insurance, a financially appealing clientele for hospitals.

Last year, the Connecticut Academy of Science and Engineering recommended that UConn collaborate with one or more area hospitals. Five area hospitals expressed interest, but UConn officials said a proposal submitted by Hartford Hospital in conjunction with the Hospital of Central Connecticut at New Britain General was the most comprehensive.

Today's report, which was commissioned by the general assembly, offered details on how the collaboration will be implemented.

The proposed new hospital building would replace the existing Dempsey Hospital without significantly adding to the number of hospital beds in the region, reflecting projections that the region will not need more hospital beds in the near future.

The partnership would create a two-campus University Hospital. A new corporation, University Hospital, Inc., would own and operate the Hartford campus, Hartford Hospital, and lease the Farmington campus, the Health Center, from UConn. The corporation would be led by representatives from both UConn and Hartford Hospital's parent company.

Unionized employees would remain part of the unions, according to the documents included in the report, and new hires for those positions would also be unionized.

The plan also calls for the state to essentially subsidize part of the fringe benefits of Health Center employees.

Unlike other state agencies, the Health Center is responsible for the cost of fringe benefits for its employees, which are significantly costlier than fringe benefits of employees at other hospitals. The difference in cost has contributed to the Health Center's deficits.

Having the state pay the difference has come up before the legislature in the past and has been difficult to resolve. Asked about the issue last week, state Rep. Roberta Willis, co-chairwoman of the higher education committee and a supporter of having the state pay, took a deep breath, then added, "Did you hear my deep breath? Can you put that in a quote?"