×

Gifford Medical Center sees turn in operating budget, plans for 2020 gain



Valley News Staff Writer
Friday, August 09, 2019

RANDOLPH — Officials at Gifford Medical Center are budgeting for an operating gain of more than $1.5 million in fiscal year 2020, which starts in October. If realized, it would be the first time the Randolph-based hospital has been in the black since 2016 and a marked difference from last year when it saw a loss of $5.4 million.

Gifford also is investing more in its OB-GYN practice, which has enjoyed a growth spurt in the past year.

In filings with the Green Mountain Care Board, Gifford officials primarily attribute the anticipated gains to their cost-cutting efforts over the past couple of years, which have included eliminating about 10 positions, using the hospital-owned thrift shop for office supplies, cross-training staff, better matching staffing levels to patient volumes, reviewing contracts annually, moving a physical therapy practice out of rented space and into a Gifford-owned clinic and improving energy efficiency.

“We asked people throughout our organization to look at everything that we do on a daily basis,” Gifford CEO Dan Bennett said in an interview on Friday.

The cost-containment strategies, combined with improvements in patient volumes, have helped to bring Gifford — a 25-bed critical access hospital that is part of the federally qualified health center Gifford Health Care with clinics in the White River Valley — onto more even footing already. The hospital expects to lose $437,000 on a total operating budget of $52.7 million in the fiscal year 2019, which ends Sept. 30, and is a vast improvement compared with the $5.37 million deficit the Randolph hospital saw in 2018.

The hospital’s recent filings come as more than 100 rural hospitals around the country have closed in recent years. Others, including most small hospitals in the Upper Valley, have cut services such as obstetrics. The financially troubled Springfield (Vt.) Hospital, which closed its birthing center in May, is in the midst of restructuring through Chapter 11 bankruptcy.

Gifford officials have explained recent deficits by pointing to a range of issues, many of which are not unique to Gifford: a staffing shortage, which has required that the hospital contract with traveling doctors and nurses to fill in and had a negative effect on patient volumes; the costs of complying with the state’s health care reform efforts; rising pharmaceutical costs; and a conversion to a new electronic medical record system. Costs for benefits, including health insurance, dental insurance and workers compensation, also are up at Gifford.

While Gifford’s reserve funds have carried it through the recent years when revenue hasn’t been sufficient to meet expenses, Bennett said, Gifford “can’t rely on those reserves for a long period of time.”

The budget now awaiting the Green Mountain Care Board’s approval assumes that patient volumes will remain relatively stable as providers grow more accustomed to the electronic medical record system and as new providers see more patients, Bennett said. The proposal includes net patient revenue — the amount hospitals receive from patient care before expenses were factored in — of $52.4 million, which would be a slight increase over the $51.3 million Gifford is projected to have at the end of fiscal year 2019.

One path Gifford is not planning to take is to join a larger health-care system such as the University of Vermont Health Network or Dartmouth-Hitchcock Health, which in addition to Dartmouth-Hitchcock Medical Center consists of several critical access hospitals including Mt. Ascutney Hospital and Health Center in Windsor, Alice Peck Day Memorial Hospital in Lebanon and New London Hospital.

So far, Bennett said Gifford aims to tackle these challenges as an independent entity, which allows the community to maintain local control through its board and also preserves Gifford’s status as a federally qualified health center.

But, he said, “I don’t have a crystal ball.”

And Bennett emphasized the importance of Gifford’s relationships with other providers around the state, including through its participation in OneCare Vermont, the accountable care organization that is managing contracts between insurers and providers that pay providers a fixed amount per month to keep people healthy, rather than as a fee-for-service.

Gifford continues to buck the regional trend of small hospitals closing their maternity wards. This year, Gifford plans to pursue a $1.9 million renovation of 6,500-square-feet of the hospital as space for its outpatient obstetrics and gynecology practice.

Doing so will move the practice out of one of Gifford’s old buildings elsewhere on its campus and into space near the hospital’s birthing center, Bennett said. While the move will allow for more energy efficiencies, it’s also an investment in a service that Bennett said is “core to what we do.”

Gifford’s annual report shows that there were 188 births at Gifford in 2018, up slightly from 180 in 2017.

Bennett credited this increase to the closings of birthing centers elsewhere, but also to Gifford’s “unique program,” which has employed midwives since 1977.

“We’re very bullish on that,” Bennett said.

The Green Mountain Care Board is slated to review Gifford’s 2020 budget proposal at an Aug. 21 hearing. More information is available online at gmcboard.vermont.gov/content/FY2020-Budget.

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