It has been a tough few years for the University of Connecticut’s hospital system, UConn Health. The system has reported multi-million dollar operating losses since at least 2017, which saw a loss of $27.6 million.
Those losses have ballooned since the COVID-19 pandemic, throwing UConn Health into hundreds of millions in budget deficits. In 2022, the hospital system had an operating deficit of $443.8 million, which represented a significant recovery from the previous year’s $585.7 million loss.
Now, the governor’s office is stepping in to get UConn Health back in the black. Governor Lamont announced on Wednesday that the state had hired a consulting firm “to assist in the development of a strategic vision for the future of UConn Health’s clinical operations.” The firm is tasked to “work collaboratively with all parties to assess the healthcare marketplace in Connecticut and identify potential opportunities to build on the successes at UConn Health, including its clinical, research, academic, and public service missions” over the next few months.
“UConn Health is one of the leading medical centers in the northeast, and the research and developments being performed there are transforming modern healthcare,” Governor Lamont said in a statement. “The formation of this strategic vision will help this institution successfully thrive and lead in this field for another generation.”
UConn’s struggles aren’t unique. According to a March 2023 report from the Connecticut Hospital Association, the years since the pandemic struck have been difficult across the board. Yale-New Haven lost more than $200 million during 2022.
The primary driver of these losses was a $3.5 billion increase was expenses, including labor, drugs, and medical supplies since 2020. Hospitals also report treating more patients with more severe medical issues, raising the cost of doing business. Subsequently, increasing patient costs have resulted in difficulty in collecting accounts receivable.
For UConn Health, labor and pension costs are the greatest annual expense. Salaries and wages make up 33.8% of total operating expenses in 2022, fringe benefits were 22.1%, and pensions were 5.5%. Patient services, meanwhile, made up $974.9 million of functional expenses, while patient billing only brought in $743.5 million.
What sets UConn apart from other hospital systems in Connecticut is the fact that it is connected to a public university, making it at least partially state-funded. State appropriations in 2022 totaled $344 million.
“I am proud of the dramatic strides UConn Health has made over the past several years to grow revenues and improve our fiscal outlook,” President Maric said, committing to work with the consultant to take on suggested changes. “We are confident we can meet the state’s objective to operate with increasing efficiency while continuing to successfully carry out our core missions.”
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