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December 2, 2015

Study: Investing in CT hospitals rather than taxing them would pay dividends

Connecticut can make close to $35 million per year and spur job growth by investing in hospitals rather than taxing them, according to a study from the Connecticut Center for Economic Analysis released Monday by the Connecticut Hospital Association, which paid for the study.

“Hospitals are a huge economic driver in Connecticut,” contributing $21.9 billion a year to the economy, CHA CEO Jennifer Jackson said in a news release. “This study shows hospitals can be part of the solution to the state’s budget troubles. By investing in, rather than taxing, our hospitals, we can generate jobs and bring in tens of millions to our state every year. We urge legislators to support this win-win solution.”

Currently, Gov. Malloy is taxing hospitals $556 million per year, resulting in longer hospital wait times, less access to care, and higher healthcare costs for everyone, according to CHA’s release. The hospital tax was originally instituted to bring in federal money, but over time, the state began keeping more of the hospitals’ money, foregoing the federal match. Currently, the state is leaving $373 million federal dollars on the table each year, CHA said.

The CHA launched an ad campaign last month opposing Malloy’s recent Medicaid cuts.

The CCEA study found that by returning the tax dollars to hospitals, as the state originally intended:

· More than 6,600 jobs will be created, including full and part-time jobs.

· 60 percent of those jobs will be generated in industries like construction, administrative and support services, and professional and scientific support services.

· The state would get an additional $373 million from the federal government.

· The new jobs will lead to increased sales, income, and other related tax revenue that would generate a surplus to the state of over $30 million annually over and above its $183 million share of the investment.

A spokesman for the governor did not immediately respond for comment today on the study.

However, when the CHA ad campaign and website,, launched last month, Malloy criticized the association and its campaign, both of which he said are indirectly subsidized by public money provided to hospitals. He also continued to hammer at hospital finances.

The governor noted that the recent cuts are not to Medicaid reimbursement rates for providers, but rather come from a supplemental Medicaid program for hospitals. He also said Connecticut is not alone in taxing its hospitals.

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