Day Kimball Healthcare and Hartford HealthCare Suspend Affiliation Talks Due to State Budget Cuts
October 05, 2015
Severe and unexpected cuts by the state of Connecticut to Medicaid payments have affected progress Day Kimball Healthcare (DKH) and Hartford HealthCare (HHC) were making toward a strategic partnership.
In July, the two organizations announced that they had agreed to work together to outline the terms of a proposed affiliation. The immediate goal was to allow HHC to provide management support for select operations determined by DKH. These agreements would have offered economies of scale to help DKH reduce its cost structure.
“Given the magnitude of the state’s cuts, it would be imprudent for us to consider moving forward with such a partnership at this time,” said James Blazar, Hartford HealthCare’s senior vice president and chief strategy transformation officer. “This reckless slashing of Medicaid funding makes it difficult for HHC to create a path forward with Day Kimball Healthcare right now. Both our organizations have just taken a gut punch.”
According to state estimates, HHC would stand to lose $55 million in the cuts and, as a result, needs to curtail major capital expenditures at this time. DKH expects these cuts to result in a $5.6-million loss in state funding to its revenue in this fiscal year.
“Partnering with HHC represented a real opportunity for us to benefit patients and strengthen our finances. We are disappointed that these budget cuts affected HHC’s ability to work towards this opportunity at this time,” said Robert Smanik, FACHE, DKH’s president and chief executive officer. “In addition to this lost opportunity, the budget cuts also caused DKH to lose the small hospital funding that our legislators were successful in restoring just months ago. Despite these challenges, DKH is working diligently to mitigate these revenue losses, and will continue to explore all strategic opportunities for continued growth and expansion.”
Blazar praised DKH’s administration and board for their collaboration in the partnership exploration, and held out the possibility that — with restored funding or under calmer financial circumstances — an affiliation is still desirable.
Day Kimball Healthcare (DKH) Day Kimball is a non-profit, integrated medical services provider comprised of Day Kimball Hospital, healthcare centers in Danielson, Dayville, Plainfield and Putnam, Day Kimball HomeCare, Hospice & Palliative Care of Northeastern CT, Day Kimball HomeMakers, and Day Kimball Medical Group. Its service area includes Northeast Connecticut as well as nearby Massachusetts and Rhode Island communities. Day Kimball Healthcare’s comprehensive network offers more than 1,400 employees including nearly 300 associated, highly-skilled physicians, surgeons and specialists. Visit DKH at daykimball.org.
Hartford HealthCare (HHC) is Connecticut’s only truly integrated health care system. With more than 18,000 employees and $2.4 billion in net revenue, the system offers the full continuum of care with five-acute care hospitals, an air-ambulance service, one of the nation’s top medical training centers, comprehensive behavioral health and rehabilitation services, a large physician group and clinical integration organization, research facilities, skilled-nursing and visiting-nurse services, a laboratory system that spans the state, and a number of services for seniors, including senior living facilities. Visit HHC at hartfordhealthcare.org.