UConn Health has a long history of bailouts. Lamont is looking at options

Trying to resolve continuing financial problems, Gov. Ned Lamont is turning to an independent consultant to chart the future for the UConn Health center at a time when many hospitals are struggling.

The future of the UConn Health center has challenged state officials for the past 25 years as they have tried to balance the books with state funding and patient fees at the John Dempsey Hospital in Farmington, along with tuition, fees, and research grants at the university’s medical and dental schools.

During that time, Connecticut has had multiple governors, House Speakers, UConn presidents, trustee leaders, and medical school deans who have all studied the situation. Now, it’s Lamont’s turn.

“I’m thinking about partnerships, where you maximize the value of UConn Health,” Lamont said when asked by The Courant. “They do extraordinary work. Maybe with some partnerships we can reduce the cost to the taxpayers and make sure UConn Health is all it can be.”

Some legislators have questioned whether the health center is run as efficiently as possible, but Lamont said the issue is broader than that.

“I don’t think that’s the question,” Lamont said of efficiencies. “Look, it’s obviously a few hundred million dollars a year to the taxpayers. They’ve got an amazing medical school. We’ve got to do nothing to compromise that. Great clinical care. What’s the best relationship there so we can maximize the care at the least cost to the taxpayers?”

When asked during his first five years as governor about his plans for the future of the health center, Lamont had said that he was thinking about it without offering concrete plans.

“I’ve been looking at this for a while,” Lamont said. “I’ve been talking to UConn about this for some time, talking to the other hospitals about this, trying to figure out how we can maximize the value there.”

Since a request for proposals has not been released yet, a consulting firm has yet to be hired and the exact costs for the consultant have not been announced.

“We ought to have some preliminary response in the next 90, 120 days,” Lamont said, adding that he wants details before the 2024 legislative session ends in May.

A longtime business executive who likes to cut through the bureaucracy and move quickly as in the private sector, Lamont said, “I can be a little impatient sometimes.”

During the 2022 fiscal year, the state’s block grant was $208 million and the allocation for state fringe benefits was $200 million for total state support of $408 million out of overall revenues of $1.6 billion, according to numbers provided to the state legislature by UConn. The tuition revenues of $472 million were higher than the state’s contribution.

Lamont has received strong pushback from the top leaders of the UConn administration, who say that a consultant is not necessary.

Behind the scenes, UConn President Radenka Maric and other top officials have been trying to block the request for proposals sought by Lamont, which was first reported by Hartford Courant columnist Kevin F. Rennie. Rennie obtained a two-page letter that was written by Maric and three of the university’s highest-ranking officials: board of trustees chairman Daniel Toscano, health center board chairman Sanford Cloud, and medical school dean Bruce T. Liang, who also serves as interim CEO at the health center.

“We question the need to issue a broad RFP or RFI, particularly because, as you know, we fear this will cause significant damage to UConn Health, including its schools, its reputation, and most importantly, retention and recruitment of the best and brightest faculty, staff and students, many of whom build their lives and careers in Connecticut,” the letter said.

The four leaders also said they are concerned about the future of the UConn medical and dental schools that are based in Farmington.

“We are extremely concerned that if any responses include selling the clinical enterprise, the two schools’ accreditation — and therefore their ability to continue to operate — could be in serious jeopardy,” according to the letter.

During years of previous debates about the future of the health center, Connecticut lawmakers have repeatedly noted that Harvard Medical School does not own its own hospital and students instead learn at hospitals around Boston.

House Republican leader Vincent Candelora, who has served in the legislature since 2007, expressed frustration at the continuing issue of the health center’s finances. But he agreed a consultant is not necessary.

“We’ve known about this problem for decades,” Candelora said in an interview. “What’s a consultant going to do?”

He said it is time to make decisions, rather than relying on a consultant that will push the issue into 2024 and beyond.

Lamont “is punting like the rest of the governors who have dealt with this issue — and the legislature,” Candelora said. “This issue has been punted for years. We just keep plugging the dikes temporarily and throwing money at it, and there’s never been a systemic fix.”

The financial problems at the health center have been a long-running issue with the legislature, dating back at least to 2000 and have continued for the terms of the past four governors. The health center sought millions in additional funding as lawmakers said for years that the fringe benefits for state employees at the state-subsidized hospital in Farmington have traditionally been far beyond those at similar hospitals. At Lamont’s direction, the state will be funding the legacy costs of pensions and retiree health care.

In a recent message sent to colleagues, Liang said the consultant’s report will provide recommendations on the coming years.

“The healthcare industry is obviously ever-changing,” Liang said. “Knowing that, it’s important to periodically undertake a holistic assessment of how our public health system is operating in this rapidly evolving environment and work to identify potential opportunities to safeguard and promote our continued vitality – and plan for the future.”

High salaries and pensions with COLAs

The health center has a large number of highly paid employees, according to the state comptroller’s office.

The health center has 421 employees being paid at least $200,000 per year, including 118 at $350,000 or more, 32 at $500,000 or more, eight at $800,000 or more and four employees at $1 million or more, according to the comptroller’s statistics. The total payroll for 2023 is $525 million for nearly 7,000 employees in a large, sprawling operation that includes a hospital running 24 hours per day.

Statewide, the UConn health center employs 10 of the top 15 highest-paid state employees and 30 of the top 45 highest-paid.

While pensions are paid separately out of the state pension fund, the health center has some of the top-paid retirees in the state. That includes Dr. Jack N. Blechner, a former professor at the health center and former department chairman of obstetrics and gynecology. His pension in 2023 is $342,000, which increases every year under the cost-of-living increase for longtime retirees. The total represents a sharp increase of more than $100,000 from Blechner’s pension in 2005 that was $216,000.

The consultant, Candelora said, should look at the salaries and benefits that are driving costs higher.

“Public sector salaries — we tend to overinflate the worth of our public sector,” Candelora said. “It’s no longer the world of getting great benefits for lesser pay. Generally, across the board, on average, state workers are paid far more than the private sector — on top of having great benefits.”

But university spokeswoman Stephanie Reitz said earlier this year that the highest-paid doctors generated millions in revenue.

“The five UConn Health faculty members who recently were listed among the top 10 earners for the past fiscal year collectively generated more than $20 million in 2022 in clinical care revenue for UConn Health — nearly quadruple their total combined salaries,” Reitz said. “From 2016 to 2022, these same five physicians collectively generated $60.7 million in clinical revenue, and overall, UConn Health’s 10 highest-paid faculty have brought in more than $140 million in clinical revenue in the same period. This revenue is critical to UConn Health, since about 50% of its revenues come from its clinical operation and state support accounts about 25%.”

Oversight at health center

Legislators have questioned the level of financial oversight at the health center, citing a case in which UConn continued to pay an 84-year-old medical school professor, Dr. Pierluigi Bigazzi, after he was dead.

Bigazzi was paid for at least five months with 11 biweekly paychecks until his body was discovered by police on Feb. 5, 2018. He was believed to have been killed in his Burlington home at some point around August 2017 and wrapped in black plastic garbage bags with duct tape in the basement. His 70-year-old wife, Linda, was charged with murder and tampering with physical evidence. The criminal case is still pending.

“You would hope people would recognize that somebody is not showing up at the office,” Senate Republican leader Kevin Kelly has said of the case.

Later, UConn recovered about $50,000 in wages that had gone electronically to Bigazzi’s joint bank account that he shared with his wife. The total was reduced by the amount of vacation time that had not been taken by Bigazzi, who was earning about $200,000 per year at the time of his death. He had been working from home on rewriting part of the medical school’s curriculum, and he did not answer more than a dozen emails as UConn officials tried to contact him.

Medical malpractice

One financial problems for UConn in recent years is a 2021 Superior Court ruling that a Bristol couple should receive $37.6 million from a medical malpractice lawsuit after an insemination procedure went wrong at UConn Health. One child died in utero in January 2015, while her twin brother will need lifelong medical care after sustaining a brain injury, according to the lawsuit.

Superior Court Judge Mark H. Taylor, a well-known former attorney for the state Senate Democrats before ascending to the bench, wrote in the 107-page ruling that the court “agrees with the vast majority of superior courts, concluding that a physician providing obstetric care owes a direct duty to a mother to prevent harm to her child during gestation and delivery.”

UConn officials said the size of the ruling, which included both economic and non-economic damages, had been unexpected.

The ruling has been appealed and is awaiting a decision by the Connecticut Supreme Court.

Long history

Various ideas and recommendations have been debated by governors and legislators through the years.

In March 2007, five major hospitals teamed up and went public to protest UConn’s plan to build a $500 million hospital in Farmington as behind-the-scenes feuding over the proposed new hospital spilled into public view.

UConn said at the time that its then-30-year-old hospital in Farmington was too small and seriously outdated, making it increasingly difficult to attract top faculty for its adjacent medical and dental schools. Competing hospitals countered that a larger hospital in Farmington would siphon off suburban patients with good insurance plans, leaving them with a disproportionate number of poor patients and more severe financial problems.

Those particular plans were dropped, and some officials said that Hartford Hospital, St. Francis Hospital and Medical Center, Bristol Hospital, Middlesex Hospital, and The Hospital of Central Connecticut should work with UConn to determine the number of new beds that were needed in the region.

In 2009, officials talked about a merger between Hartford Hospital and the health center that would create a two-campus “university hospital” in Farmington and Hartford.

That idea fell apart, and the next governor, Dannel P. Malloy, called in 2011 for a bold new plan that was more than double the size of a plan discussed under Gov. M. Jodi Rell. The legislature approved an $864 million multifaceted project to expand the medical and dental schools and generate an estimated 3,000 new construction jobs at the Farmington campus. The proposal called for adding 100 students to the medical school, 48 students to the dental school and about 50 medical researchers overall, as well as a new hospital tower and parking garages.

The proposal said the health center, which had been bailed out four times since 2000 under two governors, would break even by 2018.

The tower was eventually built in Farmington under Malloy’s direction. But UConn’s financial problems have continued.

Despite the long-running issues, Candelora said he is trying to remain optimistic.

“I’ll never give up. Otherwise, I wouldn’t run for re-election,” Candelora said. “Reform is always incremental in government. It’s always difficult to get reform, but this is an area that needs it. I’m hopeful that it will bear fruit. I’ve seen a lot of consultants being hired and a lot of press releases, but I have not seen results.”

Christopher Keating can be reached at ckeating@courant.com