| [February 24, 2010] |
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Hartford Healthcare Makes Great Strides With "Solid Foundation" Strategy
HARTFORD, Conn. --(Business Wire)--
Hartford Healthcare today announced major progress in a strategy launched last year called "Solid Foundation." The Solid Foundation strategy is a major endeavor by Hartford Healthcare to further its commitment to quality healthcare through strengthening its solid financial foundation, including: further reducing costs through process improvement; creating new economies of scale; continuing its cost savings initiatives without sacrificing quality or diminishing programs; and negotiating new contracts with all major managed care companies.
"Everything we do at Hartford Healthcare is for the good of our patients and to benefit the communities we serve; this is our number one priority," said James Blazar, Senior Vice President & Chief Strategy Officer. "Our ability to invest in new technologies, recruit and retain the best doctors and nurses to care for our patients, and to provide critical services like much-needed emergency and trauma care, relies heavily on our financial foundation. Our Solid Foundation strategy was developed to support our initiatives that improve patient care and better our communities, and we've made great strides in the last several months."
Since the launch of the strategy late last year, Hartford Healthcare has signed new multi-year contracts with four major managed care companies - Aetna, CIGNA, HealthNet, and ConnectiCare. These new contracts ensure that thousands of patients in Connecticut will continue to have uninterrupted access to the highest quality healthcare offered by the Hartford Healthcare family of hospitals and doctors including Hartford Hospital, Windham Hospital, MidState Medical Center, Natchaug, and VNA Healthcare.
Negotiating with managed care companies is one key element of Solid Foundation. In 2010, Hartford Healthcare has two more major contracts to negotiate, and these contracts have a common thread - historic underpayments from private insurance companies. Hartford Healthcare physicians and hospitals have been paid too little for too long compared to hospitals across the country with similar services and capabilities. With the state's current budget shortfalls and expected future difficulties with adequate reimbursement from government-funded programs like Medicaid and Medicare, it's even more imperative that over the next year new managed care contracts include fair market rates for care provided in the future.
"We believe in a level playing field, so Hartford Healthcare's strategy is for every managed care company to pay approximately the same amount for the same care - at a level equal to rates of peer hospitals," said Blazar. "Establishing parity may not be easy, but it's necessary and it's fair to all our patients with private insurance. Years of low payments from managed care companies have taken a toll on our financial foundation and threaten our ability to provide high quality care to our patients. We're committed to recalibrating all of our managed care contracts during the round of renewals that will be complete this year."
The facts clearly show why Solid Foundation is necessary to support Hartford Healthcare's ability to better serve its patients and communities. Hartford Hospital, Hartford Healthcare's flagship hospital, provided $24 million in charity care in 2008 and a similar amount in 2009, one of the two largest charity care hospital providers in the state. The difficult economy has only increased the financial strain created by providing this uncompensated care, driven in part by rising unemployment.
Hartford Healthcare, as a system, has also invested $81 million over the last year alone in the latest proven state-of-the-art technology and life-saving equipment like LIFE STAR (News - Alert), the state's first emergency air transport system. There are a number of key healthcare services that no other hospital in the area can provide, including trauma, stroke care, cancer care, transplants, and much more. This type of complex, comprehensive care can be found at just a handful of hospitals in the Northeast, and Hartford Healthcare does it at significantly lower cost than most.
Hartford Hospital also teaches and trains hundreds of new doctors each year through its affiliation with the University of Connecticut Medical School. These investments meet the needs of patients with complex health problems and fulfill Hartford Healthcare's responsibility as a Level One trauma center.
Even with a low cost structure compared to similar hospitals, Hartford Healthcare has made considerable progress over the last two years in another core element of the Solid Foundation strategy - continuing cost savings initiatives without sacrificing quality care or diminishing programs. Since the start of 2008, Hartford Healthcare has reduced costs by more than $23 million, including adjusting staffing levels, tackling supply costs, and restructuring employee benefits. It continues to look for new ways to control costs and do more with less, while still honoring the talented physicians, nurses, and other employees that make Hartford Healthcare the quality institution it is today.
"2009 was a turning point year for Hartford Healthcare, and the Solid Foundation strategy helped set the stage for the future," said Blazar. "In fact, for the first time in nearly a decade, Hartford Hospital operated in the black. The system overall is working toward an operating margin of 1% to 2% to allow for reinvestment in new technologies, the modernization of facilities, and improved access to critical care for the community. All of these important investments require a Solid Foundation that is supported by more efficient operations, carefully targeted process improvement, and fair payment from managed care companies."
An important part of Solid Foundation is a commitment to transparency and frequent communication, and Hartford Healthcare will provide regular progress updates.
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