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Hospitals in southern Windsor County and Claremont in talks about sharing services



Valley News Staff Writer
Wednesday, August 28, 2019

MONTPELIER — The three hospitals serving southern Windsor County and the Claremont area are in talks about combining services as officials at Springfield Hospital say it can’t survive without some sort of partnership.

Discussions are ongoing as Springfield Hospital goes through Chapter 11 bankruptcy, citing in part high levels of charity care and a payer mix that includes fewer patients covered by private insurance in a town that was once a thriving hub of the machine-tool industry.

The other two hospitals in the talks are Mt. Ascutney Hospital and Health Care in Windsor and Valley Regional Hospital in Claremont, two communities that also have seen declines from their economic heyday.

Given that Mt. Ascutney is an affiliate of the Lebanon-based Dartmouth-Hitchcock Health system, and D-HH employs the interim CEO of Valley Regional, D-HH is also at the table, Mt. Ascutney CEO Joseph Perras told Vermont health care regulators at a hospital budget hearing in Montpelier on Wednesday.

The goal is to find a way to deliver services to patients in southern Windsor County and Sullivan County in a more efficient and cost-effective way.

“I am cautiously optimistic,” Perras said.

Springfield Hospital Interim CEO Mike Halstead told the Green Mountain Care Board on Wednesday that he was uncertain “if there is a light at the end of the tunnel” for his hospital, saying it has just 10 days of cash on hand while it is going through bankruptcy to reorganize its debt. Despite a series of efforts to trim expenses, Halstead and Springfield Interim CFO Tom Marshall told the Vermont health care regulators they could not achieve sustainability without a partner.

But Halstead, an employee of the Tennessee-based consulting firm Quorum Health Resources, said he’s been encouraged by the fact that the other hospitals’ leaders are coming to the table.

“We’ve got to look at trying not to duplicate (or) triplicate what we’re doing,” he said.

Members of the Green Mountain Care Board welcomed news of these talks and said they hoped to learn more in the future.

Board member Robin Lunge, who also is serving as chairwoman of a statewide Rural Health Services Task Force, said she will be “interested to see where you land.”

Lunge noted that Brattleboro Memorial Hospital, which sits farther south in the Interstate 91 corridor from the hospitals involved in these talks, also is struggling. In March, in the wake of Springfield Hospital’s announcement that it would stop delivering babies, the Brattleboro hospital announced it would begin offering pre- and postnatal care in Springfield for expectant and recently delivered mothers.

Perras said Brattleboro has not been involved in these talks but has been involved in increasing collaboration with the Keene, N.H.-based Cheshire Medical Center, another D-H affiliate. In addition, Perras noted those two hospitals could be affected by the pending combination of D-HH with GraniteOne Health, a health system that includes Monadnock Community Hospital, a critical access hospital in Peterborough, not far from Keene.

At this point, it is unclear what shape the collaboration in the southern part of the Upper Valley might take and what services might continue in which community. Perras said primary care would certainly remain in each community, but all other services ought to be on the table. Halstead said Springfield has two urologists whom he would hate to scare away.

“Urology should be on the table for Springfield to maintain,” he said.

Stephen LeBlanc, D-HH chief strategy officer, said in a Thursday phone interview that each community also likely needs to maintain some sort of emergency and/or urgent care access.

“Then the question is ‘Do you need all the beds that you have today?’ ” he said. “That’s what we’re trying to study.”

Each of the three hospitals, all of which carry the federal designation of a critical access hospital, has 25 beds. Each operates an emergency department and performs some surgeries. Mt. Ascutney also operates a 10-bed rehabilitation center, and Springfield has a 10-bed adult inpatient psychiatric care center in Bellows Falls. All three hospital systems also run clinics in nearby towns.

Springfield officials told regulators they have an average daily census of 12 patients in the hospital and seven in the psychiatric center. Mt. Ascutney is busier with about 20 patients on average in the hospital beds and about eight in the rehab center.

In the past year, Mt. Ascutney has seen an increase of 25% in patients from the Springfield area and 13% from New Hampshire.

As the group discusses which services ought to continue to be offered where, LeBlanc said issues related to transportation also are on their minds.

When and if hospital officials can sort out a delivery model that makes sense to serve community needs in a financially sustainable way, they will then work to develop a governance structure to support it, LeBlanc said.

The effort will require “some tight working relationships,” he said.

Deanna Howard, Valley Regional’s interim CEO, said she only recently joined the group’s talks. She said she views it as a “golden opportunity” to discuss how care is provided to the approximately 50,000 people in the region.

She emphasized that what is being discussed is not a merger. She also noted that it’s still very early and there will be challenges to executing whatever plan they may come up with.

“You can talk a lot, but doing it is a different part of the process,” she said.

Budget review

Wednesday was the last day of 2020 hospital budget hearings before the Green Mountain Care Board. Now the board will begin considering whether or not to approve them.

Mt. Ascutney officials have proposed a 2020 operating budget of $57.7 million, which is up from the $55.9 million in expenses officials expect for the fiscal year that ends Sept. 30.

Though Mt. Ascutney is expecting a slight loss of about $400,000 on operations this year, officials there aim to turn that around next year for a surplus of $600,000.

But Mt. Ascutney CFO David Sanville told regulators that due to uncertainty around contracts with the accountable care organization OneCare Vermont — which pay providers a fixed monthly payment based on the number of patients they care for — he is having a hard time predicting where Mt. Ascutney will end up.

“At this point in the year, I have no idea how I’m really going to finish,” Sanville said.

As part of the budget process, Mt. Ascutney also has asked regulators to approve an increase of about 3% in the rate it charges commercial insurers, but Sanville said Mt. Ascutney could avoid raising rates if there were more certainty around how much money the organization is required to hold in reserve for the OneCare contracts.

The budget Springfield Hospital proposed for the fiscal year beginning Oct. 1, which does not include costs relating to the bankruptcy, includes total operating expenses of $51.4 million. This is down from the $56.7 million in expenses hospital officials project they will have at the end of this year on Sept. 30.

Hospital officials have worked to reduce expenses by nearly $10 million in recent months, in response to substantial operating losses in recent years. They expect to end this year with a loss of $6.5 million but to reduce the loss to just under $1 million next year.

The budget, however, does not reflect any changes that might take place as a result of the ongoing discussions with neighboring hospitals or costs associated with the bankruptcy itself, Halstead said.

Officials at Randolph’s Gifford Medical Center presented their 2020 budget to regulators last week.

Though Gifford officials expect to lose $437,000 on a total operating budget of $52.7 million in the fiscal year 2019, which ends Sept. 30, they are budgeting for a surplus of $1.5 million next year.

Board member Maureen Usifer, in a video recording of the meeting, asked Gifford CEO Dan Bennett to explain whether the budget is overly optimistic, given the hospital’s recent red ink that include a loss of $5.4 million last year.

Bennett said he has confidence in the hospital’s 2020 budget, given the work officials have done to curb expenses.

“I think it’s attainable,” he said.

The board is expected to issue decisions by mid-September.

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