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Under pressure

Take an aging baby boomer generation in need of more medical care, more doctors choosing specialties over primary care, the implementation of a new health care system, cutbacks in federal and state funding, and you have hospitals scrambling to not just stay out of the red, but to survive.

“I think that in our case the governor’s new budget has put tremendous amount of pressure on our institution,” said Frank Corvino, president and CEO of Greenwich Hospital. “We were hurt to the tune of $8.5 million in revenue to our bottom line. That comes directly from patient services; we will have that much less to work with. That will mean program closures and loss of jobs.”

At press time, Corvino said he was in the process of dealing with making cuts and would be announcing them during the week of Aug. 1.

“The goals of 2012 reflect finding success in today’s model, while preparing for tomorrow’s,” said Dan DeBarba, president and CEO of Norwalk Hospital. DeBarba said dealing with the federal health care reform paradigm shift that implements a payment system that rewards for quality outcomes and cost effectiveness will be the major challenge.

“Physician integration is also a major challenge in 2012,” DeBarba said. “I think Norwalk like all hospitals needs to do a better job of aligning with physicians in coordinating care and preventing re-admissions. Disease management, cost management and operation efficient are all on the top to the mind this and next year.”

Corvino said preparing for 2012 is directly affected by what will happen in 2014.

“On top of all this, most of the provisions of Obama care will kick into effect in 2014,” he said. “We will see signs of reduced medical revenue over the next several years. As an organization we are going to be expected to do more with less. We are going to close certain programs that are not part of our core mission.”

Michael Daglio, senior vice president of operations at Danbury Hospital, said priorities need to continue to be focused on providing the highest level of quality care in the most fiscally responsible way.

“Reimbursements for patient-care services in the first half of 2011 continued to decline due to relatively high unemployment, a shift from insured patients to uninsured and government-plan insured patients, and continued reductions in reimbursement from the government payers,” Daglio said. “The hospital tax and state and federal cuts have also been tough to mitigate.”

Daglio said to respond to the pressures on the revenue side, hospitals have had to significantly lower their costs and become more creative in delivering the same high quality care more efficiently.

“There will be many tough decisions ahead to reduce costs for hospitals in Connecticut and around the country,” Daglio said.

Daglio said he has seen an increase in the industry of partnering and merging with other hospitals and physicians.

“We affiliated this year with New Milford Hospital,” Daglio said. “The relationship allows us to standardize care and share talent when appropriate, identify reductions in administrative and other duplicative costs, and ultimately build a more efficient model for regional health care delivery.”

DeBarba said part of achieving an efficient model is properly implanting new technology, though that also has a learning curve. Next year, hospitals will be reviewed and rated as to whether they use their electronic medical records in a meaningful way, through a federal program called Meaningful Use.

Daglio said the greatest challenge to hospitals today is keeping momentum in changing times and a tough fiscal environment. “It is a very delicate balancing act of some very conflicting priorities,” he said.

Corvino said over time the passage of the health care reform bill is really going to impede the ability to produce high quality health care.

“We don’t have the primary care physicians to handle it as a country,” he said.

Corvino said what also needs to be included in the mix is the growing baby boomer generation.

“We are going through an impending health care crisis to the elderly,” Corvino said. “More and more people are turning 65 and there is no way that we have the means to take care of all of them.”

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