UConn misses out on $100 million federal hospital grant

A $100 million federal hospital construction grant once believed to be earmarked for Connecticut was awarded to Ohio State University Wednesday, leaving the state $100 million short in its quest to renovate and expand the UConn Health Center’s John Dempsey Hospital.

The money was considered key to a $362 million plan intended to secure the long-term future of the Farmington hospital. U.S. Sen. Christopher Dodd got the grant inserted in the health reform law last year amid accusations that it was an earmark. But it proved to be anything but.

In the past, UConn officials have said they could consider philanthropy and other grants if the $100 million federal grant did not come through. If the money is not secured by June 30, 2015, the plan will terminate.

In a letter to faculty, staff and students Wednesday, Interim UConn President Philip Austin and Vice President for Health Affairs Cato Laurencin expressed their support for the project and said it would move forward as they seek the needed funding.

Losing out on the federal grant is nearly certain to lead to more wrangling over the future of Dempsey, and will present a new challenge for incoming UConn President Susan Herbst.

The 224-bed hospital is considered too small and outdated to be financially viable, and has run deficits several times in the past decade. Developing a solution has proven difficult. Other area hospitals have objected to plans to build a larger hospital on the health center’s campus, and the university was unable to marshal support for a plan last year to merge with Hartford Hospital.

The $362 million plan, which Gov. M. Jodi Rell announced earlier this year, calls for building a new patient tower for Dempsey and renovating the existing space. It also includes nearly $30 million in programs and projects at the other area hospitals, and unlike previous proposals, received their support.

Rell, Dodd, Gov.-elect Dan Malloy, and U.S. Rep. John B. Larson all expressed disappointment Wednesday afternoon, although each said they hoped the plan could go forward.

“I’m disappointed in this decision, but I’m not at all willing to say it’s the end of the road for this project,” Malloy said in a statement. “A renovated, expanded UConn Health Center is something I think is critical to the economic revival of central Connecticut, and it would clearly benefit the state from a public health standpoint and from an education standpoint. It’s the type of investment we need to fight for.”

Malloy lobbied for the money earlier this month in a meeting with U.S. Department of Health and Human Services Secretary Kathleen Sebelius. At the time, he called the grant “critical to the future of our state’s only public medical and dental schools,” and said a federal contribution was “the only solution to addressing the long-term financial challenges that have confronted the UConn Health Center.”

On Wednesday, Malloy said he would examine the options for funding the project and has tasked his staff to propose “innovative and alternative ways” to move the project forward.

“This is a disappointment and a set-back, but we cannot allow it to be an insurmountable obstacle to our state’s future success and competitiveness,” he said.

Rell praised the university’s application and said that the project would bring thousands of jobs, new medical technology and “greatly improved” access to health care.

“While today’s decision is tremendously disappointing, I know that UConn, our Congressional delegation, John Dempsey and the partner hospitals remain committed to finding the funding necessary to realize this important goal,” she said in a statement.

Dodd, who helped usher through the health reform law that includes the grant, issued a statement expressing his unhappiness with the outcome.

“I am terribly disappointed in this decision by the Obama Administration,” he said. “While this was a competitive grant that attracted numerous applicants, Connecticut made a very strong case that I am surprised did not match or exceed the applications by other states.”

In their letter, Austin and Laurencin, who is also dean of the School of Medicine, said the project was of “critical importance.”

“Efforts to implement our renewal project, construct the patient care tower and establish the UConn Health Network will continue as we seek to secure necessary funding,” they wrote.

Austin and Laurencin added that they are “pleased to say we have unwavering support from the UConn Foundation, the University’s fund raising arm, as well as many community leaders who are fully committed to the success of these initiatives.”

The bulk of the project’s funding comes from $237 in state bonding, which cannot be released until the $100 million is secured. The rest of the funding comes from $25 million already issued to UConn.

Although there are hospitals in Connecticut that are smaller and older than Dempsey, UConn officials have said that the hospital’s problems are rooted in having many of its beds devoted to services that lose money, such as psychiatry and neonatal intensive care. In addition, many of the hospital’s rooms are double-occupancy, which do not meet current privacy standards and are not well suited for increasingly large medical equipment.

The current plan would not significantly increase the number of beds at Dempsey, but would allow patients to stay in single rooms. It would also allow the hospital to use more beds for profitable services by transfering the operation of the neonatal intensive care unit to Connecticut Children’s Medical Center.

When Dodd had the grant inserted in the health reform bill last December, it was believed that only a dozen or so states would qualify.

The grant, which can pay for up to 40 percent of the cost of renovating or building a health care facility, was restricted to universities that included their state’s only public medical and dental schools. The governor of each state that applied was required to certify that the health facility was critical to providing greater access to health care in the state and was essential for the continued financial viability of the medical and dental schools.

Martin Kramer, a spokesman for the federal Health Resources and Services Administration, the division of HHS that awarded the grant, said 27 institutions were eligible to apply for the grant. All applications were scored by an objective review committee, and Ohio State’s application had the highest scores, he said.

Kramer said he was unable to say how many applications were submitted. Other institutions that have acknowledged applying include the University of Washington, Oregon Health & Science University, the University of Mississippi Medical Center and the Indiana University School of Medicine.

Ohio State University will use the money to support ProjectONE, the university’s largest-ever construction project, which will expand the university’s medical center. It will include a new cancer hospital, critical care tower, outpatient center, research laboratories and classrooms.

Ohio Sen. Sherrod Brown touted the grant in a statement released in conjunction with Ohio State Wednesday.

“This unprecedented project will bring thousands of new jobs to Central Ohio and further cement our state’s leadership in providing the highest quality of medical care,” he said.