Hartford Business Journal

20 HARTFORDBUSINESS.COM | MAY 15, 2023 Connecticut Children's CEO Jim Shmerling stands in front of the Hartford construction site where a new $280 million patient tower is being built. HBJ PHOTO | STEVE LASCHEVER Building Momentum CT Children's new $280M patient tower a linchpin in broader financial turnaround, expansion By Harriet Jones Hartford Business Journal Contributor S uperhero day has been an annual tradition for the last decade at Connecticut Chil- dren's medical center, and this April, the hospital was able to combine it with a groundbreaking for the most significant expansion in the hospi- tal's 27-year history. CEO Jim Shmerling got in on the act, donning a red super- hero cape for the accompanying press conference. The $280 million new tower, adjacent to the hospital's current Hartford premises, has been in the works for several years. It will house several ambitious new programs, including a fetal surgery center that is expected to make Hartford a national leader in the discipline, a NICU unit with 50 private rooms, and state-of-the-art facilities for bone marrow transplant work and gene therapy. "There's so much demand for our services that we're turning patients away, so we need to expand," Shmerling said in a recent interview. The new patient tower is the high- est-profile piece of a broader turn- around effort that's been underway at Connecticut Children's since Shmerling, a Tennessee native, arrived eight years ago. At that time, the picture was different than it is today. The hospital had run multimillion-dollar deficits in two of the previous three years. "The board had approved a deficit. I've never seen that before," Shmer- ling said of his arrival in October 2015. "The budget when I got here was to lose $8 million, and that was a huge improvement over the previous year. In fact, the board felt like that might be a stretch." The legacy financial issues revolved around the hospital's size and core patient population, he said. "We're comparatively small … to other children's hospitals, so we don't have the same kind of scale," said Shmerling. "We have a lot of children who are enrolled in the Medicaid program, and Medicaid does not pay the cost for the care." Infrastructure build-out His approach to fixing those two problems continued a trend begun by his predecessor, Martin Gavin — supporting the hospital's mission in underserved communi- ties by expanding its overall reach, and thereby tilting its revenue mix toward more sustainable private insurance payments. This strategy was partly achieved by building more outpatient facilities. "We really didn't have that many satellites," he said. "So, we spent a lot of time investing and building out that network across the region." Where previously the hospital counted 750,000 children in Connecticut as its core patient population, it has now extended into western Massachusetts and eastern New York, encompassing a potential patient population of 1.2 million children. And, as it has moved south in Connecticut toward communities in Fairfield County, it has begun to serve more families with access to private insurance, improving the payer mix. The southern Connecticut expansion, not incidentally, also builds Connecticut Children's brand in part of the state with potential wealthy donors. Counting affiliate programs as well as its own standalone locations, Connecticut Children's now operates about 40 satellite facilities in commu- nities that range from Putnam to Poughkeepsie, New York, and South Hadley, Massachusetts to Stamford. Yale operates the state's only other children's hospital. "He's had a huge and positive impact on Connecticut Children's," said David Roth, who was on the hospital's board when Shmerling joined, and became board chair shortly thereafter. "We opened a Danbury specialty care unit, a Westport specialty care center, a Farmington infusion center, an urgent care center in Farmington," said Roth. "He helped create a clini- cally integrated network that engages pediatricians from all over the state, which connects us to these doctors and gives them a better under- standing of what we can do. And they now refer a lot of their patients to us." In addition to the physical infra- structure build-out and new relation- ships around the state, Shmerling also partnered with peer institutions. Connecticut Children's now runs the neonatal intensive care units at eight other hospitals in the region, and for some, their pediatric units as well. As hospital consolidation only gains

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