Connecticut’s low Medicaid reimbursement rates inhibit access to care, drive up patient costs, and strain healthcare providers. At the same time, residents and communities across the state are struggling to prevent and manage chronic disease and improve health. The Medicaid program, which covers one in four people in Connecticut, can and should work better.
We agree with the Commissioners of the Department of Social Services and Office of Health Strategy that there needs to be a path toward solutions, and indeed, a conversation based on facts.
The fact is hospitals are a crucial, lifesaving, and life-sustaining part of the state’s healthcare delivery system, especially when it comes to caring for the most vulnerable. If Medicaid is not sufficiently supporting hospitals, it’s not supporting their patients and communities.
Hospitals provide care to anyone who walks through their doors, regardless of their ability to pay, and treat thousands of Medicaid and Medicare patients at a loss, with government payments coming nowhere close to covering the cost of delivering that care. No matter how you do the math, the reality is Connecticut hospitals absorb $1.4 billion in Medicaid losses and $1.3 billion in Medicare losses every year, and these losses keep growing.
Despite their not-for-profit tax-exempt status, hospitals are also one of the largest taxpayers (and employers) in the state, paying more than $800 million in taxes to the state each year through the hospital tax program. The tax program has not done nearly enough to help support the cost of providing services to Medicaid beneficiaries and has resulted in net revenue losses to hospitals totaling more than $1.7 billion since the tax began.
But it doesn’t have to be this way.
What if Medicaid were designed to not only focus on immediate medical needs but to address the root-cause issues that drive poor health and health disparities?
Connecticut hospitals have joined with a coalition of community partners to advocate for reforms that reimagine Medicaid. A central aim of these reforms is to invest in initiatives that prevent chronic disease and improve community well-being. Addressing social, economic, and environmental drivers of health — like stable employment, housing security, environmental safety, and access to nutritious food — fosters healthier families for generations to come.
Connecticut hospitals and health systems, in collaboration with community partners, have developed a comprehensive plan to achieve these goals by strengthening and expanding multi-sector health partnerships. This framework builds on efforts already underway to develop and implement innovative programs that connect individuals and families throughout the state with vital resources and services.
The hospital tax can be part of this solution, but not if it is used simply to bolster the state budget and add more strain to hospitals at a time when they are already struggling. Connecticut hospitals are instead proposing to make adjustments to the hospital tax program to support substantial improvements in reimbursement and new investments in a broad range of community health initiatives.
Connecticut hospitals are focused on three cornerstones:
- Address Medicaid hospital underpayment: Increase reimbursement so that payments cover the cost of providing care and provide for annual trend updates that keep pace with the rising cost of care.
- Engage multi-sector health partnerships: Build on community partnerships to co-design ways to best use Medicaid funds to create community-directed investments that reward positive health outcomes.
- Establish a regional investment and accountability financing model: Establish a financing and accountability framework that provides substantial and sustained new investment funding for the work of hospitals and the multi-sector health partnerships in which they participate.
Uncertainty around Medicaid at the federal level makes it more critical than ever that, here in Connecticut, we continue working together on solutions that support Connecticut patients and communities. There is a better way to maintain access to essential services, preserve the healthcare workforce, and improve the health outcomes of all Connecticut residents; local hospitals are crucial partners in that solution.
Jennifer Jackson is the CEO of the Connecticut Hospital Association.