Fewer D-H referrals putting Mt. Ascutney budget in the red

  • Dr. Joseph Perras has been a physician at Mt. Ascutney Hospital since 2013. After 18 months as Chief Medical Officer for the hospital, he will be assuming the additional role of Chief Executive Officer on January 11. Dr. Perras will take over the CEO position from Gay Landstrom, PhD, RN, who has served as interim CEO since June. (Valley News - John Happel) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Sunday, April 14, 2019

WINDSOR — Among Vermont’s struggling small hospitals, Mt. Ascutney Hospital and Health Center was one of the few financial success stories in fiscal year 2018.

But when administrators brought their good news last week to the Green Mountain Care Board, they also carried a warning: Fiscal 2019 is proving more difficult, and the Windsor hospital could end up with an operating deficit this year.

Mt. Ascutney’s situation is another indicator of the fragility of hospital finances across the state.

“Our swing in the last couple of months has kind of raised the issue of how tenuous even good performance can be in Vermont,” said Dr. Joseph Perras, Mt. Ascutney’s chief executive officer and chief medical officer.

Recent Green Mountain Care Board statistics show that eight of Vermont’s 14 medical hospitals lost money on operations in the fiscal year that ended Sept. 30. Those issues have prompted deeper discussions about what’s ailing rural hospitals, and the care board also has summoned several hospitals for questions about their fiscal 2018 results.

Among those hospitals, only Mount Ascutney is appearing before the board due to positive financial performance.

The hospital posted positive operating income of $1.05 million in fiscal 2018. That equals an operating margin of just 1.9%, but that was good enough to be the best margin among Vermont’s eight small “critical access” hospitals.

It was the third straight year of positive operating margins for Mt. Ascutney. Additionally, in a key patient-revenue figure tracked by the care board, Mt. Ascutney exceeded the amount in its board-approved budget by 4.4%.

“We actually had every line of business exceeding gross revenue targets for the year. So that was very positive,” said David Sanville, the hospital’s chief financial officer.

Sanville noted that the hospital’s acute inpatient revenue jumped 23% in fiscal 2018, primarily due to “a disproportionate number of inpatient surgeries.”

Outpatient and emergency room revenue also was up, as were the number of days patients spent in the hospital. Several long-term “boarder” patients played a role in that, administrators said.

Perras said Mt. Ascutney has for several years faced a shortage of primary care doctors, which could be driving more patients into the hospital and emergency room. However, “we’ve hired three primary care doctors in the last six weeks, and we’ll be in a much better place with much better access,” he told care board members.

Rising expenses — which are outpacing hospital revenue growth across Vermont — were not a major factor for Mt. Ascutney last fiscal year. That, coupled with strong revenues, meant that “the stars aligned for a year,” Perras said.

But they don’t seem to be aligning this year. Documents presented to the care board by Mt. Ascutney show the hospital running about $700,000 behind budget through the end of February — five months into the fiscal year. Sanville cited a variety of factors, dubbing the hospital’s performance “death by a million paper cuts.”

“I don’t think we have any one thing that is running away from us or creating chaos that we cannot get in front of,” he said.

Administrators did cite inpatient volumes that are “significantly down” in the current year. Perras said one big factor in that decline was a significant drop in post-acute care patient referrals from Lebanon-based Dartmouth-Hitchcock Medical Center, with which Mt. Ascutney has been affiliated since 2014.

In February, Dartmouth-Hitchcock patient referrals to Mt. Ascutney “dropped 30% in one month” due to glitches in the referral system, Perras said.

Ironing out those issues is “an ongoing process,” he said. Perras added that “our relationship with (Dartmouth-Hitchcock) generally allows us, except for February, to keep our hospital full and keep our staffing where it should be.”

Mt. Ascutney administrators say they’ll be working hard to manage expenses in the second half of the hospital fiscal year in order to improve their outlook. At the moment, the hospital is projecting a $679,613 operating deficit by year’s end, though Sanville said that’s a “conservative” estimate.

“I’m fairly confident we’re going to do better than that,” he said.