HPSA Summer Internship Blog Series: The Role of Policy in Health Care Funding

Having grown up in Connecticut, I was elated to spend the summer interning at Hartford Healthcare, a newly formed health system headquartered in downtown Hartford. Hartford Healthcare (HHC) prides itself on being a fully integrated health system focusing on innovating the way healthcare is delivered through its robust operating model. Elliot Joseph, CEO and a graduate of the Health Management and Policy program here at the University of Michigan has led the transformation of healthcare in the state of Connecticut.

Like many states, Connecticut’s population is aging and hospitals are challenged to meet the specialized needs of the population. In response, Hartford Healthcare created the Bone and Joint Institute, Connecticut’s first and only orthopedic hospital. HHC is also working on several other initiatives related to access and patient experience which I worked on in my role within Clinical Informatics.

Despite Hartford Healthcare’s agility and innovativeness, policy implications are having a dramatic impact not only on Hartford Healthcare but all hospitals in the state. In 2012, Connecticut implemented a tax on healthcare providers that in effect has been steadily increasing over the years. The tax originally started with the idea that by moving cash from the hospital to the state, Connecticut would be eligible for higher Medicaid matching payments from the federal government. Hospitals would receive all of the funds they paid in taxes.

Over the years, hospitals have received less and less of their tax payments back. Instead of the state taking the tax revenue and sending it to the federal government for matching Medicaid funds, the state is using increasing amounts of the healthcare provider tax revenue for the general budget. The tax and the inability for healthcare providers to get their tax payments back is having a significant impact on operating margins and the ability for hospitals to innovate. Worsening the situation, as of September 8th Connecticut has not passed a budget for the new fiscal year that started in July. This budget impasse leaves healthcare providers in a literal state of financial uncertainty.

During my internship with Hartford HealthCare, I was able to see adaptive leadership in an ever-changing environment.  As health policy is shaped at the state and federal levels, Connecticut healthcare organizations must and will continue fulfilling their respective missions.

Quian Callendar is a second year Master's in Health Services Administration student at the University of Michigan's School of Public Health. He is passionate about advancing health care access and health equity.