UConn Health leadership shares funding request with legislative panel
(Sydney Herdle/UConn Photo)
I am Dr. Bruce Liang, the Interim Chief Executive Officer and Executive Vice President for Health Affairs of UConn Health, and Dean of the UConn School of Medicine. Joining me today is Jeff Geoghegan, Executive Vice President for Finance and Chief Financial Officer for UConn and UConn Health.
I would like to start by thanking each of you for your leadership, dedication and support. I would also like to thank the Governor, Secretary Beckham, and others in the administration who continue to work closely with UConn Health.
I would like to take the time to provide you with an overview of UConn Health, the state's only public academic medical center: UConn Health is a vibrant, high-performing public asset for the state of Connecticut. Thanks in large part to your leadership and investment, UConn Health generates $3.3 billion in overall economic benefit to the state. In addition to this economic impact in dollars, UConn Health contributes over 13,000 jobs to the state economy and is the single largest source of physicians, surgeons, and dentists in the state. UConn Health has a unique inter-dependent tripartite public mission-Education, Research/Innovation, and Clinical care, and I appreciate the opportunity to share this with you today.
Education: UConn Health ensures access to top-quality health care services for Connecticut citizens by training the state's future physicians, dentists, and scientists. UConn Schools of Medicine and Dental Medicine are affordable top-rated options for the sons and daughters of Connecticut. At 653 students, we have maintained the 30% increase in class sizes delivering on the promise of the Bioscience Connecticut Initiative – our programs and our students are thriving.
UConn Health is the single largest source of medical and dental professionals in this state. 63% of the Dental School trainees and 70% of the Medical School trainees stay in the state after graduating from the Schools and their residency programs.
The School of Medicine is a state leader in building and developing a diverse healthcare provider pipeline for Connecticut through the Department of Health Career Opportunity Programs, the Aetna Health Professions Partnership Initiative and the Visiting Students for Underrepresented Minorities program. The School of Medicine ranks 27 and 33 among public medical schools for research and diversity, respectively by the US News and World report. The School of Dental Medicine has been recognized by the American Dental Education Association for achievements in the recruitment and matriculation of underrepresented minority students.
We are the home to 840 Resident physicians and dentists- these are medical and dental trainees who have graduated and are now in specialty training – providing patient care in local hospitals in over 29 communities across the state. The medical residency program brings in $159 million in federal funds to the area hospitals in the State to support their salaries and training.
We also have 378 PhD, Masters and graduate certificate degree students in our Graduate school – individuals who graduate and contribute to research, science, public health service, and the Connecticut economy.
UConn Health's inpatient and outpatient medical and dental clinics are not only the principal places for educating and training our students, but they are also necessary for the accreditation of the medical and dental schools. As the state's only public medical school, UConn Medical School and UConn Health perform their public missions like other states' academic medical systems. The level of state support for our missions, at 13.3 percent of total revenues, is on par with or even lower than that at public health systems in other states.
Given these critical and far-reaching roles, it is absolutely vital that we focus on building on successes to ensure that UConn Health can grow and thrive in the decades ahead, serving our patients, our students, and our state as effectively, but also as efficiently as possible.
Research, Innovation and Start-Ups: The state, through Bioscience Connecticut, made strategic investments in UConn Health and the region to generate long-term, sustainable economic growth based on bioscience research, innovation, entrepreneurship and commercialization. As a result, UConn Health federal research awards are strong at a record-breaking $129 million, including committed external awards in 2023.
Our Center on Aging recently received a $7 million National Institute on Aging (NIA) Claude D. Pepper Older Americans Independence Center award solidifying our standing in the field as now being part of a nationwide network of just 15 Pepper Centers in the country to help older Americans maintain or restore their independence. The Center also received a $1.4 million award to serve as a lead institution to establish an NIA Geoscience Education and Training Network as a complementary "sister" network to the NIA Translational Geroscience Network.
Further, our collaboration with Jackson Laboratory-Genomic Medicine is strong with joint grant submissions that have resulted in $128 million in awards with another $47 million pending. Our biotechnology startup incubator in Farmington is at capacity with 59 companies that raised $106 million in equity and other funding last year, and paid $4.2 million in taxes. Our faculty are developing new therapies for brain and heart attacks, spine and bone disorders, precision-guided neurosurgery, and new vaccine therapies for triple negative breast cancer, to name a few.
State-of-the-Art Clinical Care: I urge anyone who has not seen and experienced care at UConn Health to visit us. Our clinical services have continued to gain national recognition for providing care with new approaches and technologies that other hospital facilities are not able to provide in the state or region. Our faculty teach and mentor students and resident doctors for not only their clinical but also scholarly and research training. This is what academic medical centers do. Without them the Schools would be at risk.
Clinical revenue at UConn Health has had unprecedented growth for more than a decade with sustained annual increases in patient volumes even during the pandemic. This means, since the state's investment in Bioscience CT in 2010 to this current fiscal year, UConn Health's clinical care revenue is on target to triple from $326 million to $919 million in FY24.
UConn Health's workforce needs to be substantial enough to meet the very large and rapidly growing volume of patients who choose to receive care here, who come from all of Connecticut's 169 cities and towns. Inpatient and outpatient medical and dental care at UConn Health had a record 1.5 million outpatient visits last year, and our hospital's Emergency Department saw over 51,000 patients. In fact, since 2013, UConn Health outpatient care visits have close to doubled. Last fiscal year alone clinical care net revenue increased by $98.3 million to total $841.8 million and from 2022 to 2024, we expect the clinical net revenue to increase by nearly $180M. From 2014-2024, UConn Health has grown its net patient care revenue by 141%.
What is important to know is that UConn Health's top 10 earners for the past fiscal year collectively generated nearly $46 million in 2023 in clinical care and research revenue for UConn Health -this is more than quadruple their total combined salaries. Cumulatively, from 2016 to 2023, UConn Health's 10 highest-paid faculty brought in more than $281 million in clinical and research revenue. This revenue is critical to UConn Health, since state support accounts for about 13% in FY24. Not only are they providing exemplary, compassionate cutting edge care to our patients, they contribute to generating 59% of our self-generated total revenues, largely from our clinical operations, which the largest source of UConn Health's revenue.
Public Mission: As the state's only public academic medical center, part of UConn Health's responsibility and mission is to leverage our workforce, research, and clinical knowledge to be a key resource to the state when needed. This is a responsibility we take very seriously.
UConn Health is the major safety-net care facility providing equal access and the same quality of care for under-served populations who depend on us for treatments for both inpatient and outpatient services that are provided at levels not supported by most other private entities. These services include specialty surgery (spine, orthopedic surgery, neurosurgery, cardiac surgery and vascular surgery), painful-inherited red blood cell disorder sickle cell disease, childbirth, dental health, and mental health care and operation of the state's Poison Control Center. As a result, we have patients from every one of the 169 cities and towns in the state. Of these patients, one in four are Medicaid recipients. The School of Dental Medicine is the single largest provider of dental care to the uninsured and underinsured in the state. Due to the under-reimbursement nature of safety net care, UConn Health clinical operation loses $104M each year.
Most recently, our very own, UConn Health practitioner, Marina Creed, led the construction and distribution of "Corsi-Rosenthal Boxes", which remove virus-carrying aerosols from the air, into public school classrooms across central Connecticut. The boxes are an uncomplicated combination of easily obtained supplies that can be assembled in minutes. The components- a box fan, pleated air filter panels, cardboard and duct tape; add up to less than it costs to travel to Washington, D.C., where Creed presented members of the Biden administration's Office of Science and Technology Policy (OSTP) a Do it Yourself (DIY) air purifier by the UConn Health team.
Strong Fiscal Stewardship: With extensive cost reductions, revenue enhancements and strategic growth initiatives, unlike other state agencies who receive 100% of their funding from the state, UConn Health receives only 13% of its revenues from the state to support its public missions of education, research, and caring for the citizens of Connecticut, including that for the underserved.
2024 Legislative Requests:
With respect to UConn Health's appropriation, if enacted as written, the proposed budget makes one reduction to UConn Health. It reduces $4.3M in fringe support for the UConn Health Fringe Benefit Cost Differential. Overall, the budget shortfall remains at $29 million in the next fiscal year. The projected deficit is largely due to rising salary and fringe costs.
The proposed budget includes a FY25 recommended appropriation for UConn Health that is $45.3 million less than our FY24 appropriation. During this session of the General Assembly, we are seeking an additional $16.9 million ($12.6 million appropriation and $4.3 million for the UConn Health Fringe Benefit Cost Differential), that CGS 3-123i be restored and the differential be funded on an ongoing basis at $4.5 million annually). The fringe benefit cost differential recognizes the higher state fringe benefit rates for active and current employees as compared to private hospitals' rates (~35% vs~26%). That difference is approximately $23M in FY24 and FY25.
We have internal revenue gains and spending reductions already in place for FY25 but need this additional support from the state to balance the budget.
Over the last six years, UConn Health has implemented $143.3 million in cost savings and spending reductions while simultaneously increasing clinical revenues by $335 million during this timeframe.
With regard to the wage reopener for all state employees that is currently being negotiated, any salary increases will require additional permanent state support. To be clear: the university supports our workforce being paid fairly and competitively; our request is that the state fund the full cost of any pay increases it negotiates, as it does for nearly every other state agency rather than passing most of these costs on to the university, and, by extension, our students. We will be asking the state to cover those increases for all our employees on a permanent basis. For context, the value of a 1% increase in salary for all our employees is $6.4 million.
It is important to note that state financial support to UConn Health is 13% of our total budget. Every dollar in state support is spent on employee salaries, 19% of our workforce is supported by state appropriated funding, while the remaining 81% are funded by UConn Health. This data illustrates that we are doing more than our fair share of absorbing the costs of running the state's public academic medical center that benefits our entire state. It also means that even when the state funds the cost of pay increases for a percentage of the salaries of our employees, the university is still in the position of having to fund the bulk of our employees' salaries.
Cannabis Regulatory Fund Fix: UConn Health receives funds from the state for two positions at the State's Poison Control Center, which is operated on UConn Health's campus. In the Governor's proposed budget, 178,385 is budgeted to UConn Health under the Cannabis Regulatory Fund, however, the two positions are shown under the University of Connecticut. We would please like to request the two positions be attributed to UConn Health, not UConn.
Thank you.
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***Restore CGS 3-123i. Funding for fringe benefit cost differential re The University of Connecticut Health Center employees. For the fiscal year ending June 30, 2014, June 30, 2024 and for each fiscal year thereafter, the Comptroller shall fund the fringe benefit cost differential between the average rate for fringe benefits for employees of private hospitals in the state and the fringe benefit rate for employees of The University of Connecticut Health Center from the resources appropriated for State Comptroller-Fringe Benefits in an amount not to exceed $13,500,000$4,500,000. For purposes of this section, the "fringe benefit cost differential" means the difference between the state fringe benefit rate calculated on The University of Connecticut Health Center payroll and the average member fringe benefit rate of all Connecticut acute care hospitals as contained in the annual reports submitted to the Health Systems Planning Unit of the Office of Health Strategy pursuant to section 19a-644.
