RANDOLPH — Two Vermont hospitals in the Upper Valley ended fiscal year 2020 with positive operating margins, largely due to federal COVID-19 relief payments, according to recent filings.
As a group, the state’s 14 hospitals had a positive margin of $3.2 million for the fiscal year, well below the $20.3 million the hospitals finished with for the 2019 fiscal year.
“The pandemic has certainly taken a toll on the state and the hospitals,” Maureen Usifer, a member of the Green Mountain Care Board, said in a March 3 board meeting held virtually.
Gifford Medical Center in Randolph ended the 2020 fiscal year, which ended in September, with an operating margin of $1.42 million, or 2.5%, on a total budget of $54.6 million, according to audited financials provided to the Green Mountain Care Board. That result was an improvement compared to the loss of $414,000, or 0.8%, Gifford reported the prior year and marked the first year since 2016 that the 25-bed critical access hospital finished in the black.
Gifford wouldn’t have finished the year with a positive margin without $6.6 million in CARES Act and other relief funds amid the pandemic and the related reductions in surgeries and emergency department visits, which drove a nearly 10% drop in net patient revenue, a measurement of the health care services provided to patients.
But Gifford was already on track to have a better year before the pandemic hit, according to Patrick Rooney, the Care Board’s director of health systems finances.
“Gifford hospital has turned the financial aspects of their organization around with or without the COVID piece,” Rooney said during the March 3 meeting.
On the cost side in 2020, Gifford saw expenses rise nearly 6% over what officials had budgeted. Increases included temporary labor to help in imaging and surgical departments; costs for cancer drugs as the hospital increased the care it provides for cancer patients; costs associated with COVID-19 testing; and switching laundry service providers after Lebanon-based Kleen Laundry closed in mid-2019.
Gifford saved on some costs, however, through a furlough program and by not needing a contracted orthopedic physician as much as expected because elective procedures were put on hold early on in the pandemic.
Mt. Ascutney Hospital and Health Center, which has 25 beds and a 10-bed rehabilitation unit, also did well despite the pandemic. The Windsor hospital finished fiscal year 2020 with a positive margin of $538,000, or 0.9%, on a total budget of $56.2 million. This also was an improvement from a loss of $43,000, or 0.1%, in 2019.
Mt. Ascutney benefited from $2.5 million in federal stimulus payments, as net patient revenue dipped more than 7% from the budgeted amount. The hospital also saw a boost in grant and pharmacy revenues.
Though the federal relief and other revenue helps to plug budget holes in the short term, it’s not a permanent solution, said David Sanville, Mt. Ascutney’s chief financial officer, in a narrative provided to the Care Board.
“Growing reliance on non-patient revenues is a concern for the future,” Sanville wrote.
Mt. Ascutney managed to pull expenses down 1.5% below budget without furloughs or layoffs, in part by reducing overtime, limiting new hiring and not offering merit salary increases.
Springfield (Vt.) Hospital, which recently exited bankruptcy, still had a loss of $3.18 million or 6.7% in 2020, according to unaudited financials. But that was a substantial improvement from the $9 million loss Springfield saw in 2019.
The University of Vermont Medical Center, the state’s largest hospital that in addition to the COVID-19 pandemic also faced a cybersecurity breach last year, also had a loss of $4 million, or 0.3%, in 2020. The University of Vermont Health Network, which includes the UVM Medical Center, also this week reported a loss of $21.3 million so far in the current fiscal year.
Things appear to be different for the Upper Valley’s largest hospital and health system, of which Mt. Ascutney is a member. After recording a loss of $84 million for the fiscal year that ended in June, Dartmouth-Hitchcock’s most recent filings show it had a positive operating margin of $38.6 million, or 2.9%, for the six months ending Dec. 31.
Usifer and other members of the Green Mountain Care Board acknowledged that the pandemic is not over yet.
“We aren’t going to know until we get through next year-end to really see how things truly shake out,” she said.
Nora Doyle-Burr can be reached at ndoyleburr@vnews.com or 603-727-3213.