UConn Health, UConn Facing Grim Financial Challenges

[Drew]

http://www.courant.com/politics/hc-uconn-health-discusses-budget-problems-20170611-story.html

A grim picture of UConn Health's finances was painted by the health center's CEO Monday as he told trustees that the center has faced ever-escalating losses that are projected to reach nearly $60 million next year.

"They tell me this is probably the worst financial outlook that they have seen over the last, potentially, a decade," CEO Andrew Agwunobi told members of the trustees' financial affairs committee as he presented his $1 billion budget. "I want to underscore that."

The health center has run losses since 2014, said Agwunobi, who also serves as the UConn Health executive vice president for health affairs. It's been able to reduce those projected losses substantially, but it's getting harder and harder he said, adding, "You have to go higher in the tree to get the savings."

Agwunobi said the clinical operation is presently "not financially sustainable" and that structural changes are needed to stabilize it.

He outlined a plan to drive the $59.4 million loss down to $18.4 million that includes savings through union employee concessions, but said that the steps to a more financially secure future have yet to be determined.

Both Agwunobi and UConn President Susan Herbst described the challenges of balancing their budgets at a time when the state has no budget agreement and negotiations with the State Employees Bargaining Agent Coalition are unsettled.

"I believe this is a moment where leaders of state government will need to make some decisions about the future of the university," Herbst said as she and her staff presented plans for a $1.2 billion budget.

"Our budget has been cut so many times, and so many precious student tuition dollars go to increasing fringe [benefit] costs, that the cumulative effect will soon start to show in the worst possible ways," she said. "Cuts into financial aid, inability to buy the equipment faculty needed for research, no funds to hire more psychologists, IT professionals, police, and of course, the people who drive our academic mission – great professors."

Herbst said the tight dollars mean that next fall she is expecting a slight decrease in the number of full-time tenure-track professors.

She said leaders of state government will have to decide: "Would they like to keep our high ranking and our excellence, which unfortunately does demand funding ... Or are we going to sit around and be witnesses as dramatic slippage begins."

 

[Drew]

http://www.courant.com/health/hc-uconn-health-budget-problems-20170609-story.html

The long-struggling UConn Health center in Farmington has released a dismal budget forecast for next year, with a projected $60 million deficit and a warning that the current structure of the clinical operation is "financially unsustainable."

The health center's summary of its $1 billion budget, which will be presented Monday to the UConn Board of Trustees' financial affairs committee, outlines a strategy to cut the deficit to $18.4 million and a warning about the hospital's future.

"Strategic structural changes will need to be made starting in FY 2018 to ensure financial sustainability and success of UConn Health in the long term,''UConn concludes in a budget summary released Friday.

UConn Health, which opened a new $325.8 million tower at John Dempsey Hospital a year ago, also faces a nearly $20 million deficit for the current fiscal year.

 

[Drew]

http://www.courant.com/g00/opinion/...mn.html?i10c.referrer=https://www.google.com/

The burden known as UConn Health is back in the news and the story is the same as it has always been. The facility does not attract enough patients to pay its hefty expenses.　

Next year, according to a comprehensive Monday article by The Courant's Kathleen Megan, the center's $1 billion budget is expected to fall about $60 million short of what it needs to operate. The medical center's troubles continue to grow worse, though leaders insist on pretending that it is a great asset.　

Gov. Dannel P. Malloy's 2011 decision to pour more than $500 million into the Farmington facility was one more expensive mistake. Except for UConn, Malloy has been notably antagonistic to hospitals in general for years. He has pursued policies that have sped the trend of alliances and takeovers.

The one hospital that Malloy has the most control over, UConn, has demonstrated that he is a worse hospital administrator than the private hospital executives he holds in contempt. For many years, state leaders have had to find ways to funnel money into UConn to fill its deficits. For years, it seems like that number was usually $20 million. It continues to grow.　

UConn is a small hospital and a small hospital, even with a half billion dollars in improvements, was always going to struggle in the ferocious competition for patients. It also is bound by the state's costly retirement and health benefits system. If you want to know how expensive, consider that the medical center, which includes a medical school, would not have a deficit if the benefits it paid were similar to the average of Connecticut's other hospitals.