What was feared is now becoming reality. The consequence of tax hikes on our health care system is the eroding of the system. In the last week we have seen two healthcare clinics in the greater New Haven area close eliminating more than 30 jobs and on Wednesday an announcement from one of the state’s largest healthcare providers that it will lay off more than 300 workers — a direct response to budget cuts.
Executives at Hartford Healthcare told employees that Medicaid payment reductions from the state will amount to more than $100 million over the next five years. This added to the tax hikes on hospitals in the newly passed state budget are a prescription for disaster.
Back in February, the Office of Policy and Management secretary was asked why hospitals are being asked to pay more in taxes through the proposed budget. The answer from OPM Secretary Ben Barnes was, “Why do you rob banks? That’s where the money is.”
Despite the best efforts of some of us to stop this bad budget from being passed it was narrowly approved by the legislature (by one vote in the Senate and three votes in the House) and contains many changes that may also negatively impact hospitals and healthcare providers in our region. Those changes include:
- Reductions in Medicaid provider rates by $10 million annually;
- Restrictions in the utilization of urban and industrial sites tax credits by hospitals by 50%;
- Increases taxes on Connecticut’s hospitals by $211.8 million annually;
- Enacts a hospital provider tax on ambulatory surgical centers that never had a public hearing, resulting in higher healthcare costs.