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June 6, 2024

Unions blast Lamont, consultants over UConn hospital privatization


The coalition representing nearly all unionized state employees blasted Gov. Ned Lamont on Thursday and an analysis he commissioned that outlines options to sell or otherwise privatize John Dempsey Hospital at the University of Connecticut Health Center in Farmington.

The State Employees Bargaining Agent Coalition, which includes all bargaining units except the State Police troopers’ union, said the Democratic governor’s “endless pursuit of privatization and consolidation and dedication to prioritizing corporate interests over the needs of the community is a direct threat to the health and well-being of Connecticut’s residents.”

In a two-page response to the analysis released last week by Cain Brothers, an investment banking firm specializing in health care, union officials also wrote that report understated Dempsey’s role in serving poor patients, unfairly compared an individual hospital to major health care networks, and ignored the risk of strikes that accompanies many privatization efforts.

“Gov. Lamont has the responsibility to support a public health system that serves all of Connecticut in an affordable and accessible way,” the coalition wrote. “Hiring a corporate-oriented consultant to make a recommendation to ‘fix’ our only remaining public hospital with more privatization and consolidation does a disservice to the growing population of patients that rely on UConn Health for their care.”

Lamont spokeswoman Julia Bergman responded Thursday that “The governor is focused on finding solutions to ensure the success of UConn Health continues well into the future and has emphasized the importance of facts and data in pursuit of that end goal. Patients, practitioners, and taxpayers deserve nothing less. In the process of putting together its report, Cain Brothers solicited input from a wide range of stakeholders including labor representatives, and the governor has promised this will be a collaborative process as we continue to work through next steps.” 

A spokeswoman for Cain Brothers declined to comment immediately after receiving the report.

The health center, which houses UConn’s medical and dental schools as well as John Dempsey Hospital, has been struggling financially for years, though much of that problem involves fringe benefit and wage costs — driven largely by state government and not by Connecticut’s flagship university.

The center receives about 13% of its funding from the state budget. The bulk of the rest comes from revenue generated by John Dempsey Hospital. 

But the Cain Brothers’ analysis concluded the health center patient care programs are “subscale, unprofitable and unable to financially support the academic mission nor fund recruiting or research for the medical school.” 

The health center has generated cash flow losses averaging $140 million per year between 2020 and 2023, the consultants wrote.

And while 26% of its gross charges were tied to Medicaid and the uninsured in 2022, the actual patients discharged in these categories two years ago totaled 2,561. Patient discharges in 2022 ranged between 9,415 and 28,271 at the Yale New Haven Hospital network, the Hartford HealthCare network and Trinity Health of New England.

But the labor coalition said it was unfair to contrast one public hospital against major hospital networks of much greater scale.

Only Trinity Health had a greater share of revenue tied to Medicaid and uninsured patients than did John Dempsey Hospital, barely eclipsing UConn with 27%.

Last week’s report also did not emphasize the disproportionately larger role the UConn Health Center plays in providing outpatient care for low-income residents, particularly involving mental health, sickle cell disease treatment, poison control and specialty surgeries, union leaders wrote.

The consultants also called UConn one of the nation’s smallest academic medical centers. But union leaders countered that, proportional to the population it serves, the Farmington complex is similar to medical centers linked to Ohio State University, Penn State and the University of Virginia, and it exceeds the University of Illinois.

While the UConn center has had financial woes, its patient revenues have grown by more than 150% over the past decade, and external grant funding jumped by 60% between 2017 and 2023.

Several of the solutions consultants offered last week involved teaming up with the private sector and shifting John Dempsey Hospital workers out of state employee unions. UConn could divest itself of John Dempsey Hospital and its other patient care operations, merge it with an existing hospital network and share in the revenues.

It also could form a public-private partnership, turning control of its care operations to a private interest but retaining ownership of its buildings and facilities.

Other options include leasing space within John Dempsey Hospital to a private care provider or teaming up with another enterprise to jointly purchase supplies and services. But union leaders said the report doesn’t consider the risk of hospital worker strikes that could occur under privatization. State employees at Dempsey waive their right to strike but can bring disputes to arbitration.

The labor coalition added that the report also ignores declines in health care quality tied to privatization.

It cited a 2023 Stanford University study of nearly 260 hospital privatizations that found consistent declines in access to care, particularly for Medicaid patients, and reductions in physician staffing averaging 30%.

“Connecticut patients are seeing the impacts of excessive hospital consolidation — higher costs, less accessibility, worse care,” union leaders added, citing a 2022 lawsuit by St. Francis Hospital in Hartford against the Hartford HealthCare network, claiming anti-competitive practices. “The consolidation has also empowered the major health systems to hike up their prices for services and negotiate higher prices from health insurance companies.”

The Connecticut Hospital Association found the unions’ comments about private hospitals Thursday to be counterproductive.

“All hospitals across the state, including UConn Health, are providing compassionate, high-quality care to their patients and communities,” the CHA wrote in a statement. “Disparaging Connecticut hospitals and health systems and the care provided by their exceptional workforce is uncalled for and ignores the significant work they are doing to provide care that is accessible, affordable, and world-class.  Connecticut hospitals are always there when we need them, and always working to find innovative ways to better serve patients and communities.”

But Sen. Saud Anwar, D-South Windsor, co-chairman of the General Assembly’s Public Health Committee, also expressed concerns Thursday about the prospect of privatizing John Dempsey Hospital. 

“I think the current model of public hospital … is working for the patients and the people in our state and the health care workers,” he said, adding that UConn is training some of the finest physicians, nurses and dentists in the country. “I am hesitant to move in that [private] direction.”

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