STATE OF CONNECTICUT

OFFICE OF HEALTH CARE ACCESS

410 Capitol Avenue

Hartford, CT 06134

Phone (860) 418-7001

Fax (860) 418-7053

Press Release

Contact: Carolyn Treiss

Phone: (860) 418-7001

FOR IMMEDIATE RELEASE

August 26, 2009

CONNECTICUT OFFICE OF HEALTH CARE ACCESS ISSUES REPORT ON FY 2008 HOSPITAL FINANCIAL STABILITY

HartfordMost of Connecticut’s acute care hospitals experienced financial losses during fiscal year (FY 2008), with the number of hospitals reporting negative total margins rising from five in FY 2007 to sixteen in FY 2008.  Losses were mainly due declines in non-operating income which is derived primarily from investments, the value of held securities, endowments and charitable contributions. The Office of Health Care Access (OHCA) released its Annual Report on the Financial Status of Connecticut’s Short Term Acute Care Hospitals which provides a summary of hospital performance and presents some key FY 2008 statewide hospital financial indicators and trends in the context of the current economic climate.

 

In FY 2008, hospitals statewide earned close to $109 million in income from operations which was offset by non-operating losses of close to $182 million, resulting in an overall deficiency of revenue over expenses of a little over $73 million. This amount differs dramatically from the prior year excess of revenue over expenses of $292 million, illustrating the impact of the recession.

 

Acute care hospital total margins ranged from a high of 5.22% to a low of (6.29%). Total hospital net assets declined statewide by almost $600 million from $5.1 billion in FY 2007 to $4.5 billion in FY 2008. It is also important to note that the fiscal year covered in this report ended on or before September 30, 2008, prior to the severe national economic downturn beginning approximately in October of 2008 and continuing to date. It is reasonable to anticipate that these trends may continue in FY 2009.

 

Nine hospitals had negative five-year average total margins: Bristol Hospital, John Dempsey Hospital, Johnson Memorial Hospital, Milford Hospital, New Milford Hospital, Rockville General Hospital, St. Francis Hospital and Medical Center, the Hospital of St. Raphael, and Waterbury Hospital.  

 

In addition to declines in net assets and non-operating income, several statistics from FY 2008 hospital results will continue to be monitored in the current fiscal year including increases in emergency department visits, declines in inpatient discharges, and increases in the cost of uncompensated care. “After nearly a decade of growth, the total number of discharges statewide declined by over 1,000 from FY 2007 to FY 2008” noted Commissioner Vogel, “and this decline in volume, coupled with a negative statewide total margin, is a concern. In the current operating year, hospitals have been reducing costs and putting projects on hold as we wait for the economy to move toward recovery.”

 

Although Connecticut’s acute care hospitals vary in size, specialty services offered, location and populations served, they face similar challenges, including rapid technology advancements, an aging population, increased consumerism, workforce shortages, underlying reimbursement and cost pressures, and growing competition.  FY 2008 was clearly a challenging year for many hospitals. 

 

A complete copy of this report can be downloaded or viewed completely in color by visiting OHCA’s website at http://www.ct.gov/ohca