Hartford Business Journal Special Editions

40 Hartford Business Journal • November 26, 2012 www.HartfordBusiness.com Celebrating 20 Years of Business News STORIES 20 Years of By Greg Bordonaro gbordonaro@HartfordBusiness.com F or the land of steady habits, Connecti- cut's health care industry has under- gone considerable change over the past two decades, as a national cultural shift in how medical institutions more efficiently take care of patients has begun to take shape in the state. The days of community hospitals domi- nating the landscape of Connecticut's health care industry have come and gone. While some small, independent hospitals still exist in Connecticut, much larger health care sys- tems have emerged to dominate the market. Indeed, consolidation has been the name of the game, both for hospitals as well as phy- sician practices. In Greater Hartford, Hartford Healthcare has made its mark as a major player. Over the past 20 years it has absorbed or affili- ated with several hospitals in the region. It started as far back as 1994, when the hospi- tal acquired the Institute of Living, which has served as a psychiatric division. More recently, Hartford Healthcare has added to its system The Hospital of Central Connecticut and Windham Hospital. It also boosted its presence in the eye sur- gery business when it made a $27.5 million acquisition of Newington's Constitution Eye Surgery Center. Those hospitals joined Hartford Hospital, MidState Medical Center, and other health care facilities under the Hartford Healthcare banner. Hartford Hospital has also gradually expanded its footprint, acting both as a major employer and occupier of real estate in the Capital City and the suburbs. Expansions have included a new cancer center in Avon, an $11.5 million oncology unit in Hartford, and a current $61 million invest- ment in a new parking garage and expansion of its emergency department. Meanwhile, cross-town rival St. Fran- cis Hospital opened its $184 million John T. O'Connell Tower, significantly expanding its emergency department to accommodate higher demand for its services. The new tower nearly doubled the floor space and number of beds at the hospital's emergency department. St. Francis also had to deal with a pro- longed court battle that cost it millions of dollars in legal fees and settlements, after it was discovered that a former doctor — George Reardon — abused some of his young patients. St. Francis also expanded its footprint by affiliating with the ailing Johnson Memorial Medical Center, which many feared was on the precipice of closing its Stafford Spring facilities. Johnson Memorial suffered significant financial losses in the mid-to-late 2000's, forcing it into bankruptcy protection and a multi-year reorganization before joining St. Francis in 2011. Meanwhile, Connecticut Children's Medi- cal Center opened its doors in 1996, changing the landscape for child care in Greater Hart- ford. The hospital has grown significantly over the years, serving tens of thousands of children annually for primary, emergency, and surgical care. In Farmington, John Dempsey Hospital faced continual deficits, leading some to wonder if the hospital associated with the University of Connecticut Medical School could make it on its own. With its aging, outdated facilities, state lawmakers were forced to approve millions of dollars in extra funds annually to help the hospital make ends meet. But, after several tries, a resolution was finally hatched when Gov. Dannel P. Malloy proposed and state lawmakers approved in 2011 the Bioscience Connecticut initiative, which included $163 million in renovations to John Dempsey Hospital and construction of a new $318 million patient care tower. The investments will likely be a game- changer for John Dempsey Hospital, as it tries to help elevate the status of UConn's Medical School. Meanwhile in Hamden, Quinnipiac Uni- versity unveiled ambitious plans to open the state's third medical school. The private college's Frank H. Netter MD School of Medicine is scheduled to open in the fall of 2013, and it will focus on generating primary care doctors to fill a major shortage of physicians in Connecticut. The $100 million medical school is join- ing with St. Vincent's Medical Center as its primary clinical partner, and the school also has affiliations with MidState Medical Cen- ter in Meriden and Middlesex Hospital in Middletown. There was also a significant expan- sion by urban hospitals into the suburbs in an attempt to bring medical care closer to patients. Urgent care centers and medical office buildings have sprung in towns across the state, especially as hospitals have been busy buying and adding physician practices to their networks. The attraction of working more regu- lar work hours and not dealing with a con- stantly changing regulatory environment has increasingly pushed doctors into the arms of hospitals and larger physician practices where they have taken refuge as employees rather than business owners. Meanwhile, all Connecticut hospitals and doctors have faced a challenging environ- ment, with their margins continuing to face downward pressure from inadequate reim- bursement rates, increasing medical costs, and health care reform. New payment systems and models of care have also emerged as the industry tries to focus on better managing patients' long- term health by improving preventative medi- cine and care coordination. Accountable care organizations and medical homes have emerged to meet those new goals. The industry has also tried to move away from a strictly pay-for-service model to a pay- for-performance system that rewards doc- tors for patient outcomes instead of simply just providing services. It's been a controversial and slow change that has created some resistance among pro- viders, leading to contentious contract nego- tiations between insurers and hospitals and doctors. More recently, clashes between providers and insurers have been about adequate reim- bursement rates. g Mergers, new business models reshaping healthcare S hortly after learning of the sud- den death of my boss, mentor and friend, George Bahamonde, in 2006, I remarked to my husband that I had spent more waking time with George than with him over the past 12 years. So, when I was asked to reflect over the past 20 years, I kept coming back to the dozen years, 1994 to 2006, that George and I had spent working together to make our community a better place in which to live and work. During that period, United Way was still primarily known for its ability to raise chari- table dollars within the workplace. Given that our ability to raise dollars to change community conditions relied almost entirely on the generosity of the workplace, we close- ly monitored the vicissitudes of companies doing business in our 40-town region. As they went, so went the fortunes of those we helped — in so many ways. George and I saw buyouts, buy backs, right-sizing, downsizing and ownership that moved off-shore. Not to mention changes at the top level where the CEO no longer was a home town boy who rose from the ranks, but came from another company in another part of the country, if not the world. I'll never forget the day that the represen- tative of a major employer going through an organizational change visited with us to let us know that a previously high-six- figure corporate gift was being cut in half. To soften the blow, the representative left each of us with a promotional item. Once out of earshot, George commented that we should consider the item the most expen- sive tchotchke we had ever received. We certainly learned that change within our corporate community was constant and if we waited it out, it would change again. The company that cut its gift in half has since increased corporate giving to United Way and to the local community. Today, while United Way still raises funds, primarily from those in the workplace, we are much more focused on those issues that concern us all: educational achievement for our children so that they are college and career ready and financial stability for our families so that they can more than make ends meet. So, we too have changed, along with our corporate community. I think the often cited quote attributed by some to the esteemed Hartford resident, Mark Twain, sums it all up, "If you don't like the weather in New Eng- land, wait five minutes and it will change." I think that if George were still with us, he would agree that while changes in our busi- ness community come and go, it you don't like it, well you know the rest. g Susan B. Dunn is president and CEO, United Way of Central and Northeastern Connecticut. George and Me — Learning change is a constant By Susan Dunn "Remembrance" The Connecticut Children's Medical Center opened in 1996, changing the landscape for child care in Greater Hartford. It now serves tens of thousands of children each year for primary, emergency, and surgical care. C o n t r i b u t e d P h o t o Susan Dunn with the late George Bahamonde.

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