Hartford Business Journal

12 HARTFORDBUSINESS.COM | DECEMBER 1, 2025 surpluses, though it reported an oper- ating loss in fiscal 2024 as expenses outpaced stagnant reimbursement rates, Shmerling said. Growth is also underway in Hartford, where Connecticut Children's will double the size of its main campus with a new patient tower opening Dec. 2. The project adds services such as bone marrow transplants and fetal surgery, along with up to 400 new staff members to its 3,500-employee workforce. Shmerling credits the board and staff for backing the vision that drove these moves. Perhaps because of that ambition — and the system's momentum — Connecticut Children's also drew the attention of a billionaire philanthropist focused on supporting pediatric care. Not a scam The inquiry from the Golisano Chil- dren's Alliance came out of the blue, Shmerling said. "Looking back 10 years," Shmerling said, "I say we probably exceeded some of my expectations." 'Huge potential' When Shmerling arrived in 2015, Connecticut Children's was in a far different position. The hospital had endured several years of multimil- lion-dollar budget deficits, operated out of an aging facility, and lacked the scale of larger pediatric systems. "When I came here I saw huge potential," Shmerling said. "We already had phenomenal faculty and staff really committed to the mission. We had an aging facility. We are small for a chil- dren's hospital. We didn't have scale, so we had some challenges." Those structural challenges included a low Medicaid reimbursement rate. Medicaid patients account for 57% of the hospital's clientele, yet Connecticut Children's is reimbursed about 61 cents on the dollar for their care — a rate that hasn't changed in a decade, Shmerling said. The shortfall amounts to "about $30 million or $40 million" annually, even as costs continue to rise, partic- ularly for drugs, which he described as "skyrocketing." To counter those financial headwinds, Connecticut Children's has pursued an aggressive expansion strategy that broadened its reach and improved its payer mix. Over the last several years, the hospital has opened more than 30 satel - lite locations across Connecticut, Massa- chusetts and New York, increasing its core patient base by 60% to 1.2 million. Its push deeper into Fairfield County has brought in more privately insured families, improving financial stability and raising the hospital's profile in a region with significant donor potential. Operating revenue grew from $380.4 million in fiscal 2015 to $668.1 million in fiscal 2023 — an increase of roughly 76%. Those figures reflect the medical center and its various subsidiaries, including physician groups and affiliates. During that same period, the hospital consistently posted operating Leadership Shift Shmerling set to retire after decade reshaping Connecticut Children's By David Krechevsky davidk@hartfordbusiness.com J ames E. Shmerling retired for the first time 10 years ago, when he was CEO of Children's Hospital Colorado, one of the nation's top-ranked children's hospitals. "So when I left Children's Colorado, I retired, went home to Nashville and I did not have a plan," he recalled during a recent interview with Hartford Busi- ness Journal. "And I was very bored." Needless to say, his wife, Debbie, wasn't thrilled that he hadn't mapped out his retirement. Shmerling said she eventually laid down the law, telling him to, "Get a job, volunteer, get a life, but get out from under my feet!" He was 61 then and still motivated to work with children's hospitals, which had been his dream since he was 19. Not surprisingly, that first retirement ended in October 2015, when Shmerling was hired as president and CEO of Connecticut Children's Medical Center in Hartford. Now, a decade later, Shmerling is retiring again — this time with a plan. As he helps guide the transition to his successor, Shannon Sullivan — pres- ident and chief operating officer of Women & Infants Hospital in Rhode Island, who takes over Jan. 12 — he has taken time to reflect on his tenure at Connecticut Children's. His accomplishments include completing construction of the health system's new eight-story clinical tower ahead of schedule and under budget, and recently joining a national alliance of children's hospitals that came with a pledged $50 million donation. James E. Shmerling, who is retiring after 10 years leading CT Children's Medical Center, says advocating to raise the Medicaid reimbursement rate is a key focus for the next CEO. HBJ Photo | Steve Laschever 700M 600M 500M 400M 300M CONNECTICUT CHILDREN'S MEDICAL CENTER CORP. OPERATING REVENUE GROWTH 2017 2020 2015 2018 2021 2016 2019 2022 2023 Note: The Connecticut Children's Medical Center Corp. includes the system's main hospital operations as well as subsidiaries. | Source: Audited financial statements OPERATING REVENUE James E. Shmerling stands in front of Connecticut Children's new patient tower in Hartford. HBJ Photo | Steve Laschever

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