Hos­pi­tals forced to rely more heav­ily on phi­lan­thropy as other fund­ing gets squeezed

The News-Times (Sunday) - - Sunday Business - By Paul Schott

New signs posted at Stam­ford Hos­pi­tal’s main en­trance on West Broad Street wel­come vis­i­tors to the ex­pan­sive com­plex on the city’s West Side.

But the mark­ers for a cam­pus that is also known as Ben­nett Med­i­cal Cen­ter are more than geo­graph­i­cal ref­er­ences. They rec­og­nize some of the hos­pi­tal’s most gen­er­ous sup­port­ers.

Sup­port­ers like the Ben­nett fam­ily, whose mil­lions of dol­lars in con­tri­bu­tions to the hos­pi­tal started more than 40 years ago, are more im­por­tant than ever to Stam­ford Hos­pi­tal and oth­ers in the area. As reg­u­la­tory and tax changes in re­cent years have squeezed their bud­gets, med­i­cal cen­ters are in­creas­ingly re­ly­ing on phil­an­thropic sup­port to move for­ward with ma­jor in- vest­ments such as Stam­ford’s re­cently built main build­ing and a num­ber of vi­tal pro­grams and ser­vices.

“While our oper­at­ing mar­gins are fairly lean, phi­lan­thropy al­lows us to sig­nif­i­cantly in­vest in in­fra­struc­ture, pro­grams and peo­ple,” said Chris Rien­deau, se­nior vice pres­i­dent of fund de­vel­op­ment for the Stam­ford Health

sys­tem, which in­cludes Stam­ford Hos­pi­tal.

Com­mu­nity sup­port

Con­struc­tion of the main Stam­ford Hos­pi­tal build­ing, an ap­prox­i­mately $450 mil­lion project that opened in Septem­ber 2016, de­pended on a three-pronged fund­ing strat­egy.

“We knew that we could bor­row $250 mil­lion, self­fund with earn­ings of $100 mil­lion and then would need a min­i­mum of $100 mil­lion from phi­lan­thropy,” Rien­deau said. “That was the go-in calculus.”

The ac­com­pa­ny­ing fundrais­ing cam­paign, “Heal­ing Reimag­ined,” would raise about $114 mil­lion for the main build­ing, as well as about $6 mil­lion for the Ben­nett Can­cer Cen­ter, $5 mil­lion for a pe­di­atric in­pa­tient unit and $41 mil­lion for other projects.

Phi­lan­thropy has also un­der­pinned ma­jor tech­nol­ogy in­vest­ments at the hos­pi­tal, in­clud­ing a $2 mil­lion ro­botic surgery sys­tem and spe­cial­ized equip­ment for its neona­tal in­ten­sive care unit.

In ad­di­tion, pri­vate con­tri­bu­tions also fund free pro­grams that the hos­pi­tal would not oth­er­wise pro­vide, such as trans­porta­tion and fit­ness-nu­tri­tion and in­te­gra­tive-medicine pro­grams for pa­tients at the Ben­nett Can­cer Cen­ter.

Western Con­necti­cut Health Net­work — which in­cludes Nor­walk, Dan­bury and New Mil­ford hos­pi­tals — has also seen ro­bust com­mu­nity con­tri­bu­tions in re­cent years.

Do­na­tions of more than $10,000 in­creased by 48 per­cent dur­ing the past three years. In the same span, an­nual giv­ing av­er­aged $23 mil­lion. Last year, the to­tal hit $30.5 mil­lion last year, the sys­tem’s third-high­est an­nual to­tal in the past 15 years.

Those con­tri­bu­tions are fully fund­ing a new $4 mil­lion pe­di­atric in-pa­tient unit at Dan­bury Hos­pi­tal, a $2 mil­lion pan­cre­at­ic­cancer study, and pro­grams that in­clude a Com­mu­nity Care Team fo­cused on im­prov­ing the health of at-risk area res­i­dents.

“Back in the day, phi­lan­thropy in health care was a ‘nice-to-have’; now it’s a ‘must-have,’ ” said Grace Lin­hard, WCHN’s chief de­vel­op­ment of­fi­cer.

The Yale New Haven Health sys­tem — which in­cludes Greenwich, Bridge­port and Yale New Haven hos­pi­tals — sim­i­larly re­lies on com­mu­nity sup­port for ma­jor projects.

Pri­vate-sec­tor fund­ing ac­counted for $22 mil­lion of a $70 mil­lion neona­tal in­ten­sive care unit that opened in Jan­uary at Yale New Haven Hos­pi­tal and all of the fund­ing for a $10 mil­lion ren­o­va­tion of the same type of unit that opened in Fe­bru­ary at Bridge­port Hos­pi­tal.

Fam­ily and foun­da­tion de­ci­sions to make mul­ti­mil­lion-dol­lar do­na­tions are built on con­fi­dence in hos­pi­tal of­fi­cials.

In 2014, the Carl and Dorothy Ben­nett Foun­da­tion made a $9.1 mil­lion gift to Heal­ing Reimag­ined. In to­tal, the Ben­nett fam­ily has given more than $20 mil­lion to the hos­pi­tal sys­tem.

The Ben­netts’ ties to the hos­pi­tal date to 1974 when Carl Ben­nett, now 95 and liv­ing in Greenwich, was asked to join the hos­pi­tal’s board. He and his late wife, Dorothy, started the dis­count-store chain Cal­dor.

Daugh­ter Robin Ben­net­tKanarek, pres­i­dent of the Carl & Dorothy Ben­nett Foun­da­tion, served from 2000 to 2013 on the hos­pi­tal foun­da­tion’s board and also worked as a nurse at the hos­pi­tal.

Ben­nett-Kanarek cred­ited new Stam­ford Health CEO and Pres­i­dent Kathy Si­lard, who pre­vi­ously served as the or­ga­ni­za­tion’s chief oper­at­ing of­fi­cer, with an in­stru­men­tal role in the fam­ily’s de­ci­sion to make the 2014 do­na­tion.

“I think it’s a mat­ter of form­ing strong re­la­tion­ships,” said Ben­net­tKanarek, a Greenwich res­i­dent. “Kathy did that with my fa­ther. She was the one who re­ally con­nected with him, and she met many times with him and me. That re­la­tion­ship re­ally so­lid­i­fied the trust we have in the hos­pi­tal’s lead­er­ship.”

Fi­nan­cial pres­sures

Phi­lan­thropy’s im­por­tance to hos­pi­tals has grown as ma­jor reg­u­la­tory and tax changes in the past 10 years have strained spend­ing plans.

The 2010 Af­ford­able Care Act led to lower Medi­care pay­ments to hos­pi­tals, as an off­set­ting move to fi­nance the Med­ic­aid ex­pan­sion. En­su­ing re­im­burse­ment rates to treat the grow­ing ranks of Med­ic­aid pa­tients have cre­ated on­go­ing bud­get chal­lenges.

In the 2017 fis­cal year, Stam­ford Health’s re­im­burse­ment rate ran at 48 per­cent. Med­ic­aid-in­sured in­di­vid­u­als con­sti­tuted 16 per­cent of its pa­tient pop­u­la­tion.

For WCHN, the re­im­burse­ment level rate last year ran at 64 per­cent. Med­ic­aid pa­tients ac­counted for 16 per­cent of the to­tal.

Yale New Haven Health of­fi­cials were not able to im­me­di­ately pro­vide sta­tis­tics on their sys­tem’s Med­ic­aid re­im­burse­ment and par­tic­i­pa­tion rates.

Sep­a­rate from the ACA, the state in­tro­duced in 2012 a gross re­ceipts tax on hos­pi­tals’ net rev­enues. The levy was de­signed to help Con­necti­cut qual­ify for more fed­eral match­ing funds, but hos­pi­tals have re­ported only par­tial re­funds for their tax bills.

“Times are chang­ing, and re­im­burse­ments are not what they used to be,” Lin­hard said. “Pres­sures have grown from state and fed­eral gov­ern­ments. If we’re go­ing to build and en­hance any­thing, we’re look­ing to the com­mu­nity to help make it hap­pen.”

Long-term strat­egy

Hos­pi­tals’ need for pri­vate fund­ing likely will not di­min­ish any­time soon.

Yale New Haven Hos­pi­tal would need be­tween $120 mil­lion and $150 mil­lion next year just to cover cap­i­tal ex­pen­di­tures, in­clud­ing fa­cil­ity main­te­nance, es­ti­mates Kevin Walsh, the hos­pi­tal’s vice pres­i­dent of de­vel­op­ment.

“Phil­an­thropic sup­port is crit­i­cal now,” Walsh said. “And it’s go­ing to be even more im­por­tant as we go for­ward,”

Two years after open­ing its flag­ship build­ing, Stam­ford Health’s next fundrais­ing ini­tia­tive could fo­cus on pro­grams and ser­vices such as those at the Ben­nett Can­cer Cen­ter or oth­ers sup­port­ing women and chil­dren’s care and nurs­ing ed­u­ca­tion.

“We built this won­der­ful ves­sel, with the new build­ing, and now we have to sup­port the pro­grams, peo­ple and ser­vices in it,” Rien­deau said. “We want to take a broader view of what in­no­va­tion means in health care.”

At the same time, hos­pi­tals gar­ner many small do­na­tions. WCHN pa­tients and fam­i­lies of pa­tients fre­quently give con­tri­bu­tions be­tween $25 and $100, as ex­pres­sions of grat­i­tude for their care, ac­cord­ing to Lin­hard.

“You don’t have to give a $10,000 or $100,000 gift to make a dif­fer­ence,” Lin­hard said. “We love that we have donors at ev­ery level. It all makes a dif­fer­ence in help­ing us to make ma­jor in­vest­ments and serve our com­mu­ni­ties.”

Con­trib­uted photo

New signs have been in­stalled at the en­trance to Stam­ford Hos­pi­tal, whose cam­pus is also known as the Ben­nett Med­i­cal Cen­ter. The Ben­nett fam­ily has given a to­tal of more than $20 mil­lion to the hos­pi­tal. In front cen­ter is Carl Ben­nett. In back, from left, are Robin Ben­nett-Kanarek; Kathy Si­lard, CEO of the Stam­ford Health sys­tem; and Marc Ben­nett.

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