Three years after COVID-19 descended, the state’s 27 hospitals are in bad financial shape, their condition exacerbated by soaring costs, depressed income and post-pandemic patients in need of extended care, according to a report released Tuesday by the Connecticut Hospital Association.

Painting a dire picture, the association, which commissioned a consultant to analyze data, said current trends, if not reversed, threaten hospitals’ stability and the services they provide.

“As the backbone of the health care system,” hospitals can’t continue to operate without more resources, Jennifer Jackson, the association’s chief executive officer, said during a remote press conference that originated from the association’s Wallingford office.

In the fiscal year that ended Sept. 30, 2022, Connecticut hospitals’ combined operating margin was negative 1%, with losses from operations totaling $164 million, according to Erik Swanson, senior vice president of data analytics for Kaufman Hall, the consultancy.

Asked for comment on the findings and the availability of specifics regarding Lawrence + Memorial Hospital in New London, an L+M spokeswoman referred a reporter back to the association, which provided only statewide data, without any breakdown on individual hospitals.

Swanson said Connecticut hospitals’ recent financial performance also reflected a $3.5 billion increase in expenses over the past three years, with costs associated with salaries and wages, drugs and supplies, and longer patient stays skyrocketing. In fiscal 2022, salaries and wages were up 20% over pre-pandemic levels, with contract labor costs increasing 61%. Drugs and supplies had risen 28% since 2019.

Hospitals are seeing more and sicker patients in the pandemic’s aftermath, with the average patient’s length of stay in fiscal 2022 up 9% over fiscal 2019, Kaufman Hall reported.

“In addition, labor shortages in post-acute settings are preventing the timely discharge of patients from hospitals, leading to increased expense without a commensurate increase in revenue,” the consultants wrote.

At Middlesex Health, cost increases have continued into the current fiscal year, with the price of some medical supplies tripling over the past 12 months, Susan Martin, the Middletown-based network’s chief financial officer, said during the press conference. Medicare and Medicaid reimbursements ― about 68 cents on the dollar ― must be adjusted, she said.

Dr. Syed Hussain, vice president and chief medical officer of Trinity Health of New England, said his system’s hospitals are seeing sicker patients who stay longer, a trend partially attributable to Connecticut’s aging population. Amid the pandemic, he said, many patients were hesitant to seek hospital care, which caused them to need greater attention when they finally sought treatment.

The impact of greater patient volumes has been heightened by a shrinking workforce, Hussain said, with doctors, nurses and other health care workers leaving their posts at high rates due to retirements, “burnout” and attractive offers from other employers.

According to the Kaufman Hall study, the findings “underscore the significant financial and operational threats Connecticut hospitals continue to face three years after the beginning of the pandemic.”

Jackson, the hospital association’s CEO, said the situation deserves the attention of policymakers and the public.

“Connecticut can’t be strong unless its hospitals are stable,” she said.

The association has called for state and federal support of health care worker recruitment, retention and training programs and has pushed for greater investments in Medicaid.

It also is urging Connecticut lawmakers “to oppose legislation that restricts access to health care services in the community, reduces ― by billions ― vital funding to hospitals, gives leverage to national health insurance companies over Connecticut hospitals, and makes it harder for nurses to do their jobs and will result in delayed patient care.”

b.hallenbeck@theday.com