Care Board approves budgets for Springfield, Gifford, Mt. Ascutney hospitals

Valley News Staff Writer
Published: 9/12/2019 10:15:21 PM
Modified: 9/12/2019 10:15:11 PM

WHITE RIVER JUNCTION — The Green Mountain Care Board will require regular monitoring of two Upper Valley hospitals as part of the regulatory body’s approval of 2020 budgets for Vermont’s 14 hospitals, which the board announced in a news release Thursday.

Gifford Medical Center in Randolph and Springfield (Vt.) Hospital, both federally qualified health centers that have seen substantial losses in recent years, will be required to provide the board with regular updates in the coming year as they work to stabilize their finances, according to draft minutes of the board’s Sept. 4 meeting.

Across the state, the cost of health care continues to rise even as six of the state’s hospitals have reported losses for the 2019 fiscal year that will end Sept. 30. Among those reporting losses this year are all three Upper Valley hospitals subject to the board’s review: Gifford, Springfield, and Mt. Ascutney Hospital and Health Center in Windsor.

“With the closure of 113 rural hospitals nationally since 2010, the rural health care crisis continues,” Board Chairman Kevin Mullin said in Thursday’s release. “This, paired with workforce shortages, aging demographics, and skyrocketing costs of prescription drugs, drives up the cost of health care in Vermont.”

Because of these pressures, Mullin said the state’s effort to move from a fee-for-service system of health care to a value-based system — which pays providers based on metrics such as how well they do at keeping people out of the hospital and emergency room — “is imperative, now more than ever.”

The board approved a systemwide increase in net patient revenue — the amount hospitals receive from patient care before expenses are factored in — of 4.3% for the coming fiscal year. That includes a net patient revenue increase of 5.9% for the University of Vermont Medical Center, the state’s only academic medical center, according to VtDigger. UVM Medical Center is expecting to spend $1.35 billion next year, about $75 million more than the spending the board approved last year.

As part of the board’s efforts to curb the growth in spending, it ordered Mt. Ascutney officials to bring down their budgeted increase in net patient revenue from 7.4% to 5%, “with the intent that Mt. Ascutney reduce its expenditures to achieve its desired operating margin,” Abigail Connolly, the board’s executive assistant, said in a Thursday email.

The board also approved a 3.2% increase in the average rate Mt. Ascutney charges commercial insurers, Connolly said in the email.

Mt. Ascutney, a member of the Dartmouth-Hitchcock Health system, has seen smaller fluctuations in its operating margins than the other two Upper Valley hospitals in recent years.

Mt. Ascutney officials had projected a loss of approximately $400,000 on an operating budget of $55.9 million for 2019, and had sought the board’s approval for a budget of $57.7 million, which they expected would yield a positive margin of $600,000.

As part of the board’s approval of Springfield Hospital’s proposed budget that includes spending $51.4 million for 2020, the hospital is required to participate in “monthly monitoring,” which will include reports about the effect of the ongoing Chapter 11 bankruptcy on its budget.

At the hospital’s budget hearing in August, Springfield officials told the board they expect the bankruptcy, including legal and professional service fees, will cost between $1.2 million and $1.5 million if they exit bankruptcy within a year of their June filing.

Springfield officials also told the board that the hospital will not be able to come out of bankruptcy without a partner. Springfield officials said they were in talks with officials at Mt. Ascutney, Valley Regional Hospital in Claremont and Dartmouth-Hitchcock about how they might share services.

Gifford, which lost $5.4 million in 2018 and is expected to end the current fiscal year at the end of this month with a loss of $437,000, won approval of a $51.7 million operating budget but will be required to participate in in-person meetings with the board every other month and to work with regulators to develop a sustainability plan, according to the draft minutes.

Gifford officials told the board in August that they will continue to cut costs to address the budget shortfalls, and they expect to come in with a positive operating margin of $1.5 million next year.

Nora Doyle-Burr can be reached at or 603-727-3213.

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