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Proposed Tax Worries Greenwich Hospital CEO

Greenwich Hospital President and CEO Frank A. Corvino believes that Gov. Dannel P. Malloy's proposed plan to tax hospital income would inflict a deep wound on the state's health-care system. The plan is part of the governor's strategy to reduce the state's $3.2 billion budget deficit and would need approval by the General Assembly .

Corvino said in a recent interview that if the proposed tax plan were approved, the hospital and its patients all stand to lose. "We understand the critical nature of the budget challenges facing the governor and the state of Connecticut," he said. "But hospitals are not like any other business in Connecticut. We care for people day-in and day-out without any regard to their insurance status, and we continually strive to ensure our patients receive safe, high-quality health care in the most appropriate setting."

Corvino said the state and federal health-care overhauls "could not come at a worse time — when hospitals are in need." For Greenwich Hospital, he estimates a loss of $11 million to $13 million annually under Malloy's plan. "And $13 million on a $300 million budget is significant. It means, quite simply, that we won't be able to sustain our level of service," he said.

Ben Barnes, secretary of the Connecticut Office of Policy and Management, said that overall, the proposed changes would benefit the state by a half-billion dollars. "We are clearly trying to find a way to make health-care reform affordable in the state of Connecticut," he said. The overhaul "is not out of line with the sacrifices we have asked other social service providers, state employees and taxpayers to make."

Under Malloy's proposed plan, Connecticut hospitals would pay a 5 percent tax on the first $50 million in revenue. The tax would increase to 7.5 percent on the next $250 million, with the highest rate at 10 percent for income above $300 million.

Though Greenwich Hospital is an affiliate of the Yale New Haven Health System , it operates with financial autonomy. Therefore, says Corvino, the hospital won't stand to gain from Yale New Haven's projected increase of net annual revenue of $30 million to $40 million.

But Corvino stresses a wider effect reducing hospital revenue might have. "It would impact everything from our services, many of which we provide for free, to patient care, technology and employment," he said. The hospital is the town's biggest private employer, according to the Greenwich Chamber of Commerce .

Corvino believes the plan would have dire consequences. "Because we take everyone who comes here on an emergency basis, the hospital provides a safety net for residents of the state. If this goes through as planned, it will effectively shred that safety net." Corvino didn't specify which programs would be affected. Corvino said, "If the deficit is $3.3 billion, this plan might bring $170 million into the state of Connecticut. Is it worth $170 million to impact people's health care? There are other ways to bring in that revenue," he says, adding, "Maybe we need a higher cigarette tax."

"I understand the need to reconcile the budget," he said. "But it seems that everyone is trying to balance their budgets, whether federally or on a state level, on the backs of healthcare. That seems like an unfair burden."

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