Bristol Hospital Chief Warns New Tax Would Be 'Catastrophic'

Bristol Hospital will go forward with a series of renovations and expansions even as it sustains losses because of the state's controversial hospital tax, President Kurt Barwis told a gathering of community leaders Thursday.

The hospital has to continue beefing up core services, modernizing facilities and recruiting physicians to serve the region so it can ultimately be in a better position to post year-end surpluses, Barwis said.

But Barwis acknowledged that unless the General Assembly passes a budget removing or reducing Connecticut's tax on hospital receipts, the future for community hospitals like Bristol's looks grim.

"Right now the state is taking $8 million (a year) from us — it went from a net of $3 million to a net of $8 million," Barwis said. "You know $3 million is hard enough, but $8 million is bigger than Mount Everest and we need a lot more oxygen than we have in this hospital to climb that mountain."

Barwis' talk comes as the state's monthslong budget impasse may be drawing toward a conclusion; the four Republican members of the city's legislative delegation are anticipating a vote in the House on Sept. 14.

Gov. Dannel P. Malloy's administration maintains that the hospital industry as a whole has been highly profitable over the past decade, and some supporters of the tax stress that nearly 50 Connecticut hospital executives each made over $1 million in salaries and benefits last year.

But most of the profits are raked in by the state's three largest hospitals. Also, the industry's spokesmen point out that 10 small and mid-sized hospitals posted losses last year.

Bristol Hospital hasn't had a profit of more than $1 million a year since 2007, so it seems obvious that it cannot sustain a yearly tax of $3 million to $8 million, Barwis said.

Regardless of the state budget outcome, the hospital's directors have resolved to go forward with a medical office complex downtown, an aggressive physician recruitment schedule and other projects to better serve patients while improving revenues, he said. New income is vital, Barwis said, because the hospital cannot balance its books by further cuts.

"It would be reasonable for any organization to stop and say we don't have enough certainty around what the state is going to do, so were going to hold up on all these plans — stop the behavioral health unit from being invested in, which is $4 million, stop the renovations on Level C, don't do the downtown project," he said.

"If you step back and think about the what the impact would be on the state if everybody did that — if all the organizations did that, what would happen to development in the state, what would happen to progress?" Barwis asked.

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