Connecticut Children’s Medical Center faces financial and staffing challenges

Hartford Courant – Friday, July 31, 2026
By Livi Stanford

Connecticut Children’s Medical Center is seeking to consolidate its inpatient pediatric services located at Saint Mary’s Hospital in Waterbury to its main campus in Hartford, a move reflective of the hospital’s financial challenges staffing shortages and fewer patients coming to the satellite office, hospital officials said.

Connecticut Children’s Chief Operating Officer Bob Duncan said over the last decade hospital officials found the number of patients that needed inpatient care declined, down to less than three a day at the pediatric services unit at Saint Mary’s Hospital.

He said the decline in patients occurred because routine conditions are less likely to need inpatient care and that the more medically complex, sicker children needed a level of care only available at the main hospital in Hartford. Sicker patients were transferred to the main hospital in Hartford for treatment, he said.

The state’s only health system dedicated entirely to children submitted its application for a Certificate of Need approval (CON) from the Office of Health Strategy to relocate its pediatric services. A hearing was scheduled for Thursday.

While battling financial and staffing challenges, the hospital is also serving children with more complex pediatric conditions including complex cardiac, neurosurgical, congenital anomalies, cancer and blood disorders.

Duncan said the stagnation in Medicaid reimbursement rates, inflation, drug and labor costs have all negatively impacted the hospital.

Lawmakers and advocates for hospitals say that the state has some of the lowest Medicaid reimbursement rates in the country and that legislation seeking to address the issue failed to make it out of committee last year. They say that the gap between the cost of care and reimbursement is impacting patient care.

“If you look at Medicaid rates in the state of Connecticut we have not seen an increase in almost 12 years. Yet, our expenses and costs go up and labor doesn’t come cheap. We have to be competitive financially to attract that talent,” Duncan said.

Duncan said the hospital loses about 47 cents on every dollar that is spent taking care of those covered by Medicaid, which is about 56% of the hospital’s patients.

Connecticut Children’s currently employs 900 nurses and is experiencing staff shortages. Specific numbers on that shortage were not available by publication.

Connecticut Children’s reported an $18.3 million operating loss for fiscal year 2025. Fitch Ratings downgraded the hospital’s credit rating from an A+ to A.

“The downgrade reflects an operating loss and a weakening in unrestricted liquidity in FY25,” Fitch said in a press release.

At the same time, Fitch Ratings reported a “Stable Outlook” for the hospital, which it said is reflected in “stronger fundraising.”

“Many children’s hospitals as well as adult hospitals are seeing downgrades in this current environment where the Medicaid payments are not keeping up with the cost of inflation and doing business,” Duncan said.

The hospital recently received a $1 million “philanthropic commitment from Frank Ferrucci and the Ferrucci family to support Connecticut Children’s new eight-story clinical tower,” according to a release from the hospital.

Duncan said the commitment “strengthens our philanthropic base but does not replace state funding, insurance reimbursement, fundraising or operating revenue.

“We need to continue to advocate for sustainable funding and equitable Medicaid rates for children’s health,” he said. “This gift is also spread over the course of five years and not a one-time lump sum.”

Medicaid reimbursement rates

The Connecticut Hospital Association has said that Connecticut’s “distressingly low Medicaid reimbursement rates lag significantly behind other states and create barriers to health care access for low-income residents.”

In an email to the Courant, a CHA spokesperson said that hospitals “continue to face significant economic headwinds driven by the gap between the cost of care and reimbursement from government programs like Medicare and Medicaid, which creates challenges for hospital sustainability and healthcare access.

“In FY 2024, those underpayments totaled nearly $3 billion, including $1.46 billion in Medicaid losses,” the spokesperson said. “Connecticut hospitals continue to work closely with state and federal policymakers and partners across the healthcare delivery system to address these pressures and protect access to care.”

Sen. Jeff Gordon, a Woodstock Republican, and member of the state’s Public Health Committee, said the Medicaid reimbursement rates are some of the worst in the country. He advocated last year to raise the rates but said the legislation did not make it out of committee.

He said he modeled his proposal similar to the state of Indiana, which raised its Medicaid reimbursement rates, phasing them in.

“It was extremely disappointing,” he said of the legislation failing to pass. “We see that the failure of Connecticut to up its Medicaid reimbursement rates affects hospitals just as it affects private practice doctors and other healthcare professionals.”

He said he was told the proposal was too expensive.

“I had data to show that it wasn’t,” he said. “If a bigger state like Indiana was able to handle it and get it done in a bipartisan way why couldn’t we?”

He said not increasing the Medicaid reimbursement rates would harm patient care when the hospitals can’t provide the services.

Gordon said every hospital is facing such an issue and that he is hoping to introduce another proposal in the next legislative session.

Sen. Saud Anwar, a South Windsor Democrat and co-chair of the state’s Public Health Committee, said the state’s Medicaid reimbursement rates are harming the sustainability of the healthcare system.

“Part of the reason we don’t have the workforce is because the workforce is deciding to go to other states so that they can have a better life,” he said.

Sen. Heather Somers, a Groton Republican and the ranking member on the Public Health Committee, said if the state wants to provide access to good healthcare it needs to look at increasing its Medicaid reimbursement rates.

“We need to prioritize our rates because as more and more people are going on Medicaid we’re not going to have any doctors if we can’t pay them what they should be paid in order to provide the services,” she said.

Relocating Waterbury unit

In 2007, Connecticut Children’s opened its pediatric unit at Saint Mary’s Hospital.

Duncan said that he observed over the last decade “a decline in the number of patients that need an inpatient unit down to less than three a day.”

The Saint Mary’s Unit includes 12 inpatient beds, according to the hospital’s CON application.

“The Proposal is necessary due to a number of factors, including staffing pressures on Connecticut Children’s that have forced Connecticut Children’s to relocate needed providers and staff to its other clinical locations, including its main Hartford campus and its specialized neonatal intensive care units where there is a greater need for staffing support,” the CON application said.

Duncan said, “at the end of the day our responsibility is to deploy what we have as finite resources where they can help the greatest number of children.

“And the data showed that those from Waterbury and other parts of the state are coming to Hartford where they can get that specialized pediatric care,” he said.

Duncan said that caring for children is important.

“They may only make up 25% of our population but the reality is they are 100% of our future,” he said. “And if we are not taking care of them now, our future is bleak.”

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