Hospital’s financial problems continue, officials tell Board

The Health Center administration outlined its ongoing financial difficulties in a presentation to the Board of Trustees last week, advising members that the Health Center is running a deficit of $10.3 million for the first six months of the fiscal year.

The major driver of the current deficit is John Dempsey Hospital, according to Daniel Upton, the Health Center’s chief financial officer. Another problem is reduced federal grant spending, which reduces the amount of money recovered by the Health Center for costs related to facilities and administration.

Expenses also have increased, particularly related to hospital staffing.

The John Dempsey Hospital deficit grew from $5 million in November to $9 million at year’s end, according to Upton. Hospital financial difficulties stem, in part, from lower hospital admissions.

Declining visits to the UConn Medical Group had a negative impact on hospital admissions, since the medical group is the major source of referrals to the hospital.

Patient visits and admissions were affected by December’s snowstorms and mid-week holidays. In fact, the Connecticut Hospital Association reports lower admissions generally for the region’s hospitals.

Another factor is the recent change in the hospital’s patient caseload, with fewer Medicare cases, which have favorable reimbursement rates, and more Medicaid cases, which have unfavorable reimbursement rates.

Expenses related to staffing have also increased, Upton told board members, as the hospital maintains staffing levels appropriate to patient safety needs and regulatory requirements.

The hospital has been successful in reducing staffing costs related to the use of temporary agency nurses, but it has not experienced the expected decline in overtime costs because of the need to provide coverage while newly hired nurses, aides, and unit clerks complete mandatory orientation.

The research enterprise at the Health Center is running a deficit of about $2.8 million, largely because of the decline in spending on federal grants, which reduced the budgeted recovery of costs for facilities and administration by about $1.1 million.