UConn Health Center Runs Into Tough Opponent: Ohio State


UConn experienced two heavy losses over the New Year’s holiday.  The Fiesta Bowl defeat to Oklahoma was disappointing, but achieving a BCS bowl game is still a notable achievement for a young I-A football program.

The other loss was to Ohio State.  Not in football, but in federal grant funding from the Department of Health and Human Services.  During the run-up to health reform, there was the potential for UConn to get a $100M grant for improvements to the facility.  It was not a done deal, but subject to a competitive process.  As with any competitive process, there was the potential for defeat.  Similar to the bowl game, UConn put up a strong effort but fell short.

The funding loss is significant, but the long term question is this:  What is the future of the Health Center?  Can Connecticut taxpayers afford to subsidize the facility year after year?  Can UConn continue to operate the John Dempsey university hospital?  Can it be transformed into a sustainable facility?

It is an important issue, and no option should be off the table.  The United States has about 6,500 hospitals, and that is very likely too many.  Health reform, technology, and economic forces should lead to consolidation and contraction over the next decade.  One of those economic forces is the financial status of individual states.  Connecticut has a troubled financial picture, and might have trouble justifying pouring money into the Health Center year after year.
Having graduated from the institution, I favor scenarios that allow the entire facility to prosper, but it needs to be self-sufficient over time.  Institutions such as Harvard Medical School prove it possible to have a medical school without operating a hospital.

The research capacity of the Health Center can be preserved, and students can continue to get a high-quality education.  That part is easy compared to figuring out what to do with the hospital.  A merger with Hartford Hospital came close, but could not overcome the challenges needed to move forward.

The Health Center’s audited financial statements (the last complete year available is 2008), show operating losses increasing by 16.7% in 2007 and another 19.3% in 2008, to $198.6M.  Drilling down a bit, it is apparent that operating expenses are outpacing the increases in revenue.    Dempsey is the main component of the Health Center’s finances, and if it can be put on solid footing, the rest should follow.  Despite the challenges, it may still be possible to straighten things out and keep Dempsey viable into the future.  How much time there is for this, and how to accomplish it, are the bigger questions.

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