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Hospitals Say Staffing Is a Main Concern

Valley News Staff Writer
Published: 8/31/2018 11:50:01 PM
Modified: 9/5/2018 9:12:41 AM

Montpelier — Workforce issues were at the top of the list of challenges officials of three Upper Valley hospitals shared with Vermont’s Green Mountain Care Board during budget hearings in recent weeks.

Difficulty recruiting and retaining workers, including nurses and doctors, has forced Gifford Medical Center in Randolph, Springfield (Vt.) Hospital and Mt. Ascutney Hospital and Health Center in Windsor to resort to hiring temporary traveling providers, at a high cost.

Staff vacancies also have resulted in lower patient volumes and revenues for at least two of the three hospitals, contributing to deficits in the current fiscal year that made board members question the hospitals’ financial stability. And that lack of stability may delay one hospital’s participation in some of Vermont’s health care reform efforts.

“General surgery, orthopedics and primary care are areas where we have had vacancies over the past few years,” Gifford’s CEO Dan Bennett told the board, according to a transcript of the Aug. 20 Green Mountain Care Board hearing. “And in the last two years in particular it has impacted ... services we have been able to provide at Gifford Medical Center and also our revenue.”

Mt. Ascutney is the only one of the three not to be predicting a deficit in fiscal year 2018, which ends on Sept. 30. It is also the only one of the three to belong to a larger health system. Mt. Ascutney is an affiliate of Dartmouth-Hitchcock Health. Since the affiliation in July 2014, Mt. Ascutney has achieved cost savings as a result of participating in group buying for supplies, and integrating its pharmacy, laboratory and radiology services with D-H, Mt. Ascutney’s CEO Joseph Perras told the board during a presentation on Wednesday.

“I think it’s really challenging as critical access hospital in rural northern New England to not be part of a larger health system,” Perras said.

Mt. Ascutney’s niche within the D-H system includes operating an acute rehabilitation center, which is one of two in Vermont and helps relieve the demand for beds at Dartmouth-Hitchcock Medical Center in Lebanon, Perras said. It does not include offering services such as orthopedic surgery, he said.

Both Gifford and Springfield, which are federally qualified health centers that continue to offer such specialties, are projecting deficits for fiscal 2018, following losses in 2017, but hope to be in the black in fiscal 2019.

In addition to workforce issues, Gifford CFO Jeff Hebert also pointed to the hospital’s move to a new electronic medical record in recent months, which reduced providers’ productivity as they adjusted to the new system, as a contributor to the projected $6.3 million loss in 2018, according to the transcript of Gifford’s presentation.

Springfield Hospital is projecting a deficit of about $922,000 for the current fiscal year, in part as a result of low volumes in orthopedics due to provider turnover and having to pay traveling doctors to fill vacancies for inpatient medicine doctors, also known as hospitalists, Springfield CEO Tim Ford said in his presentation on Wednesday.

Ford also pointed to a “difficult payer mix” as a reason for the hospital’s budget challenges. The bulk of the hospital’s revenues come from Medicare and Medicaid, which reimburse hospitals less for their services than private insurers do, Ford said.

In addition, Springfield also faced substantial payments related to a self-insurance program it has, CFO Scott Whittemore said. To hedge such risks in the future, Whittemore said Springfield plans to join an insurance program offered through the New England Alliance for Health, a D-H-related membership group.

Despite these losses, both hospitals are budgeting for slight gains next year. Gifford expects to end fiscal year 2019 with a $1.4 million operating surplus, with a total operating expense of $55.3 million. Springfield is budgeting for a more than $810,000 operating surplus, with a total operating expense of $60.6 million.

Mt. Ascutney, which is projecting it will end the year with a surplus of $330,000, is budgeting $54.8 million in operational expenses in fiscal 2019, to end the year with a slight operating surplus of about $17,600.

Gifford and Springfield officials say that they expect the turnaround will come from having the providers they need in place for the coming year, which will increase patient volumes and revenues.

The proposed budgets drew some questions from board members, who wanted to know whether they are realistic before they decide to accept them or not. Wednesday’s hearings of Mt. Ascutney and Springfield’s budgets concluded the board’s hospital budget hearings. The board is expected to issue written decisions by the end of September. The public comment period runs through Sept. 10.

“We had a very similar conversation last year when we looked at your budget and where you were going to come in, and that you were going to get new docs, and things were going to get you up to the number that you had put into the budget,” board member Maureen Usifer said during Gifford’s hearing. “And now we are running about 15 percent behind your budget, and a $6 million operating loss against a million something operating loss last year. ... And so I guess the question really is just how can you insulate yourselves against future down side risk?”

Usifer asked a similar question of Springfield officials on Wednesday.

Both hospital CEOs told the board that if the losses continue, they will have to look at the services they offer and consider making cuts.

“Hopefully we don’t have to get into that difficult conversation on what programs do we have to cut,” Ford told the board.

One program that could be under threat if hospital officials aren’t able to stabilize finances is obstetrics, Ford said. Other than DHMC, Gifford and Springfield are the only remaining hospitals in the Upper Valley with birthing centers. Alice Peck Day Memorial Hospital in Lebanon, a D-H affiliate, closed its birthing center this summer and merged services with DHMC.

Mt. Ascutney, which saw losses as recently as fiscal year 2015, and had a particularly large deficit in 2012, has made some changes such as closing its nursing home in response to those difficulties, Mt. Ascutney CFO David Sanville told the board.

“What we’ve done in the last six years is steady the ship,” he said.

Another Vermont hospital also is looking to grow its relationship with D-H, following losses in recent years, according to a VtDigger story published on Wednesday. Brattleboro Memorial Hospital is predicting a $2 million operating loss in 2018, due to a variety of challenges including staffing and volume issues, VtDigger reported.

To help turn things around, the hospital’s CEO Steve Gordon told the board that it might look to expand current relationships with D-H and D-H affiliate Keene, N.H.-based Cheshire Medical Center, VtDigger reported. Currently, the hospital staffs its emergency department in partnership with Cheshire, and works with D-H to staff its radiology department. Other affiliations currently exist in oncology, podiatry, rheumatology, pathology and otolaryngology, which is the specialty involving the ear, nose and throat.

“... I think that is one of the opportunities for us to look at as a small hospital,” Gordon said in the VtDigger story. “What is the future for us if we were part of a larger system, and what does that mean?”

In addition to Mt. Ascutney, D-H’s current presence in Vermont also includes D-H Putnam Physicians, a physicians group that staffs Southwestern Vermont Medical Center in Bennington.

Cutting Expenses

Part of steadying the ship has included reducing expenses, something all three hospitals are looking to do.

“Cost containment is our focus because that’s one thing you can control,” Whittemore said.

Whittemore said Springfield Hospital officials are in the process of reviewing all of their contracts. They are ensuring that contracts do not automatically renew each year, so they can decide whether or not to continue them. So far, he said they have found savings in copier, pager and telephone costs.

In addition to cutting costs in materials, Springfield also plans to replace some physician anesthesiologists with nurse anesthetists for a savings in salary expenses.

To reduce costs at Gifford, officials have reduced the hospital’s overall workforce by 9.5 full-time positions, partly through attrition, according to a narrative provided to the board. In addition, Gifford stopped printing its annual report and moved to an electronic version, reduced its copier fleet and is working with Efficiency Vermont to curb energy costs, Hebert told the board.

Mt. Ascutney has worked to cut its costs in collaboration with D-H. For example, the affiliates have taken a team approach to stabilizing workforce issues, which Perras described as “critical,” noting that D-H currently has about 700 vacancies and Mt. Ascutney has more than 40, about 10 percent of each organization’s workforce.

The system is working toward having one medical staff to be shared among the member hospitals, Perras said. In doing so, he said the hope is to be able to relieve workforce issues by being able to “fill holes when needed.”

Population Health

As part of the budget process, the Green Mountain Care Board, asked all hospitals whether they have committed to participating in the accountable care organization OneCare Vermont and the risk-based contracts it oversees. Through such contracts with payers including Medicare, Medicaid and Blue Cross Blue Shield of Vermont, rather than being paid on a fee-for-service basis, hospitals receive per patient payments, but if a patient’s care exceeds that amount, the hospital is on the hook for the difference.

The idea of OneCare, which was created by D-H and University of Vermont Medical Center in 2012, was to incentivize providers to focus on prevention and wellness and in so doing, reduce costs.

Springfield Hospital is a member of OneCare and has been participating in contracts with all three payers since the beginning of this calendar year, Ford said.

“We felt like we could be an early adopter because that’s kind of what our system is built around — a population health model... ,” Ford said. “I think it’s been to our advantage to do so.”

Mt. Ascutney is gearing up for participation in 2019, and to do so has included a $250,000 buffer in its budget in case its costs outweigh revenues.

“Our biggest concern is we have a small (base),” Sanville said. “We don’t have a lot of covered lives.”

Covering fewer people means that it doesn’t take many sick patients who need a lot of care to put a dent in the budget.

But Perras, who is D-H’s representative on OneCare’s board, said, “This is an incoming tide. ... At some point you have to let it wash over you.”

Gifford officials have not yet decided whether to participate in the ACO in 2019, Bennett told the board.

“We do need to make sure that we have the stability and the reserves in order for us to take on the financial risk in that,” Bennett said. “That might mean that we take a different glide path than some others, but ... that is not an indication that we are not — that we don’t buy into the goals of that and want to be a part of it.”

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

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