Hospitals forced to rely more heavily on philanthropy as other funding gets squeezed
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, self-fund 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 pancreatic- cancer 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.”