As the newly appointed interim CEO for UConn Health, I testified on February 22 before the Connecticut General Assembly’s Appropriations Committee regarding our budget request for the next fiscal year. I highlighted the enormous good that UConn Health does and proudly carries out as a public service mission for our state.
However, I remain troubled and perplexed by the level of misunderstanding and mistaken assumptions that continue to be perpetuated regarding UConn Health, our mission, and our finances.
Here are some facts:
For nearly every state agency, the state covers 100% of the cost of employee fringe benefits, including the so-called “legacy” costs, which are the result of the state playing catch-up to fund historical pension and health costs that for years went unfunded. But, unlike other agencies, the state does not fund these costs for UConn Health. Instead, we have had to fund them ourselves (from clinical revenues, research grant awards and student tuition and fees). Fringe is a cost UConn Health doesn’t control with rates we don’t determine.
Because of the exponential growth of these state fringe costs over the last several years, we can no longer afford to cover them for the state, so we are asking the state to continue to take on a greater share of these costs. Some would like to portray this as evidence that UConn Health is troubled and that asking the state to fund a greater share of legacy fringe costs (as it does for most every other agency) is akin to seeking a “bailout.” That is an inaccurate, grossly unfair characterization.
Some have even used this as a reason to question the very existence of UConn Health. It should be noted that every state in the nation has a public health system. UConn Health is that system for Connecticut. We are a public agency providing a public service. There is nothing remotely unusual about a state agency seeking support from state government to help fund the costs it faces – especially state-determined costs we don’t control.
As of January, if UConn Health did not have to pay the state’s legacy fringe costs itself, we would have an estimated surplus of $8 million this year, thanks in large part to our expected $689 million in self-generated net patient revenue and successful faculty researchers bringing in competitive grants. And instead of an average employee fringe rate of 65%-70%, it would be 35-40% – much closer to other health systems in the state.
That is how significant the impact of these legacy costs is on UConn Health’s budget.
Also, every hospital and health system needs to have a medical malpractice risk management program. UConn Health had a trust fund set up to help cover expenses associated with malpractice. The state swept $20 million of this fund years ago to help close the state’s budget gap, not associated with UConn Health. We are asking the state to replenish this fund. That is also being portrayed as a “bailout” in some quarters, which it is not.
The best thing we can do to challenge misunderstanding and misinformation about who we are and what we do is to rely on the truth, and on facts, to tell our story.
In speaking to the Appropriations Committee I also noted:
- UConn Health generates $2.2 billion in overall economic benefit to Connecticut, supporting more than 10,000 jobs, and is the single largest producer of physicians and dentists in our state – our Schools of Medicine and Dental Medicine have grown enrollment by 30% in recent years.
- Our hundreds of residents are providing patient care in local hospitals and more than two dozen communities across the state, bringing $137 million in federal funds to Connecticut to support their salaries and training.
- Our research revenue has grown every year for the past four years and now exceeds a record $170 million; our collaboration with Jackson Labs has resulted in joint grant submissions garnering more than $66 million in awards and our biotech start-up incubator is at capacity with 36 different companies. This groundbreaking research is propelling innovative and promising therapies across the fields of health care from the world’s first potential gene therapy cure for the life-threatening pediatric condition Glycogen Storage Disease (GSD) to a new medication reversing the growing epidemic of heart failure. Plus, our researchers are even working toward re-growing a limb by 2030 to heal wounded warriors, children born without limbs, or others injured.
- Clinical revenue at UConn Health has seen unprecedented growth over the last decade, climbing from $326 million to an expected $689 million, accounting for half of our entire budget. Our clinical care itself is transforming the lives of patients whether it’s those treated at the first and only dedicated comprehensive outpatient center of its kind in New England for the painful inherited condition of sickle cell to those benefitting from our surgeons unparalleled expertise in brain, spine and stoke surgery. In fact, our Stroke Center was just named an Advanced Thrombectomy-Capable Stroke Center, the very first of its kind in the Hartford area. Plus, we were first in the state to offer severe emphysema patients a new valve to breathe easier and first in New England to offer breast cancer patients breast conserving surgery with the latest 3D navigation technology.
- And we provide patient care for everyone, everywhere in Connecticut, up and down income brackets, including those who are severely economically disadvantaged and have nowhere else to turn, other than their state’s public health system.
This all is the cornerstone of being a public service and an incredible asset for our state.
Bruce T. Liang, M.D., is Interim CEO of UConn Health