‘Staggering’: Connecticut hospitals reeling after three years in the pandemic

Connecticut hospitals and health systems have taken a beating financially during the COVID-19 pandemic.

The Connecticut Hospital Association isn’t expecting relief any time soon. The association points to an independent report outlining the financial toll of the pandemic. And Connecticut lawmakers are seeking help from Washington and state officials.

Like most of their peers around the country, Connecticut hospitals are facing much higher expenses in labor, drugs and supplies since the beginning of the pandemic.

Connecticut hospital expenses are $3.5 billion higher than they were before the arrival of the pandemic in 2020, according to the analysis conducted by Kaufman Hall, the healthcare consulting firm.

“The financial impact of the pandemic has been staggering,” the report states.

Jennifer Jackson, CEO of the Connecticut Hospital Association, said the state’s hospitals are experiencing “unprecedented financial challenges.”

“Since the spring of 2020, Connecticut hospitals and healthcare workers have seen challenge after challenge,” Jackson said in a statement. “From the COVID-19 pandemic to new hurdles of treating sicker patients than before the pandemic and significant financial hardships, hospitals continue to provide high-quality care to everyone who walks through their doors, regardless of ability to pay, with a dedicated but smaller workforce who are exemplary but exhausted.”

“This report shows that hospitals and health systems are navigating unprecedented financial challenges and the pandemic continues to have a lasting impact on healthcare across the state,” she added.

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The Connecticut Hospital Association is asking federal and state officials for help in recruiting and retaining healthcare workers, along with investments to help train more workers. The association is pushing for greater investments in Medicaid.

Connecticut hospitals are also urging lawmakers to reject legislation that they say would give insurance companies excessive leverage over hospitals by capping commercial reimbursement for hospital services, potentially reducing funding by billions.

Like other hospitals nationwide, Connecticut hospitals found 2022 to be the most difficult year financially in the COVID-19 pandemic.

“Hospitals have incurred serious losses relative to pre-pandemic levels — including approximately $164 million in FY 2022,” the report states. “As a result, Connecticut hospitals need additional support.”

The operating margin for Connecticut hospitals in the 2022 fiscal year was -1%.

The report illustrates how much more Connecticut hospitals are paying their own staff and contract workers.

Connecticut hospitals spent $1 billion more on salaries and wages in 2022, compared to 2019. At the median, salaries and wages have risen 20% over pre-pandemic levels, according to the report. The state’s hospitals also spent $519 million more on contract labor in 2022, compared to 2019. Contract labor costs have risen 61% above pre-pandemic levels, according to the report.

While the spike in labor costs has been the biggest increase in expenses, Connecticut hospitals are also spending much more on supplies and drugs compared to pre-pandemic levels.

Collectively, hospitals have spent $1.6 billion more on supplies and drugs over the past three years.

Connecticut hospitals are also treating sicker patients during the pandemic, as seen by the increase in patient days and length of stay in 2021 and 2022. Hospital leaders have said they’ve seen an uptick in sicker patients in recent months, including some who deferred care during the COVID-19 pandemic.

Also, because of labor shortages at nursing homes and rehabilitation centers, Connecticut hospitals have been boarding some patients that would normally be discharged. Hospitals across the country are struggling with that issue as well.

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