Gifford: $15 Wage Tough on Budget

  • State Sen. Mark MacDonald, D-Orange, at the Valley News in West Lebanon, N.H., on Oct. 16, 2014. (Valley News - Jennifer Hauck) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • Dan Bennett

Valley News Staff Writer
Tuesday, February 06, 2018

Randolph — Gifford Health Care is raising concerns about a proposal in Montpelier to raise the minimum wage in Vermont from $10.50 to $15 an hour by 2022.

Gifford Health Care CEO Dan Bennett told a group of Vermont legislators gathered for breakfast on Monday morning that such an increase, if it were to take place today, would cost the Randolph-based health system at least $335,000 in increased labor costs, without a revenue source to meet it.

“I personally support and we support a livable wage for Vermonters and for our employees here as well,” Bennett said during the breakfast, which was held in a conference room at Gifford Medical Center. “The concern that we have is as a health care entity, (is) not having the mechanism to make up the additional cost that we would bear with the increase.”

Bennett added that, if approved, the higher required minimum wage would come at a time when the health system faces a series of possible funding cuts at both the state and federal level.

State Sen. Mark MacDonald, D-Williamstown, a co-sponsor of a Senate bill to raise the minimum wage, pushed back, saying that minimum wage workers are among Gifford’s patients and employees and that the health care system has a responsibility to care for them.

“It’s an interesting conundrum in this country and state where the wages get further and further apart and when you try and deal with folks at the bottom, the solution is that we can’t help them or we’ll just continue what goes on,” said MacDonald, whose district includes much of Orange County. “It’s not as simple as just minimum wage. There’s a lot of things going on, but those are the people that you serve and work in your hospitals.”

Legislators recently have indicated that they may pare back their proposal to match the proposed minimum wage for upstate New York, which is slated to reach $12.50 an hour by 2020.

MacDonald compared Gifford’s attitude to the minimum wage to the attitude of larger hospitals toward Gifford; the larger hospitals, he said, provide services with higher reimbursement rates and leave the rest to Gifford. Gifford, as a federally qualified health center, focuses on primary care.

“Small hospitals are the burdened and the downtrodden and that’s who we serve,” MacDonald said.

The largest amount of money at risk for Gifford is from federal grants which support community health centers and currently are funded only through the end of March, Bennett said. If the grant program is discontinued, Gifford — which has an annual budget of $72 million — stands to lose $1 million, he said.

At a state level, Bennett said Gifford also stands to lose tens of thousands of dollars if the state cuts a per member per month payment for Medicaid patients; if the state cuts funding for a loan reimbursement program for health care providers; and if the state reduces the amount it pays hospitals in disproportionate share payments intended to help them offset the cost of Medicaid or uninsured patients.

In addition, Bennett noted that Gifford is constrained by a budget review process overseen by the Green Mountain Care Board and by the state’s efforts to move to an “all-payer” model, which aims to move away from fee for service toward paying providers based on the health of the population they serve.

“There are constraints on and actual targets for what the increase in health care costs will be moving forward,” Bennett said.

Gifford lost money — nearly $750,000 — in the year ending Sept. 30, 2016, for the first time since 1999. At a meeting last August, Bennett told the GMCB he was anticipating a loss in 2017. Audited results for last year will be available later this month through the GMCB.

Rep. Anne Donahue, R-Northfield, who sits on the House Health Care Committee, asked Bennett which potential funding cut he would seek most to avert over others.

“Budgets are about priorities,” she said.

She added that in addition to the state cuts, Republican Gov. Phil Scott’s budget proposal also includes investments that could help curb costs, such as home visits for new mothers and infants, mental health outreach and new mental health beds for prisoners.

“What is difficult from my perspective is that there is a number of major movements and initiatives,” Bennett said, citing the all-payer model.

Built into the all-payer model are efforts to curb overall health care costs, which include partnering with community groups to offer education on the prevention and management of chronic diseases, for example, he said.

“We can’t do those things if we’re going to keep getting hit here and hit there,” he said. “We’ve got to come up with a plan.”

In his remarks, MacDonald expressed frustration about the lack of a better way to manage the health care system as a whole.

“We wouldn’t be having these conversations that go into detail about things that bolster up this, bolster up that, gets undermined here ... if we had a single-payer system that focused on health and not trying to plug up leaks,” he said.

Valley News Staff Writer Nora Doyle-Burr can be reached at ndoyleburr@vnews.com or 603-727-3213.