Care Board Approves UVM Medical Center Rate Hike, Asks for Access 'Crisis' Plan | Off Message

Care Board Approves UVM Medical Center Rate Hike, Asks for Access 'Crisis' Plan


University of Vermont Medical Center - FILE: COURTESY PHOTO
  • File: Courtesy Photo
  • University of Vermont Medical Center
A reluctant Green Mountain Care Board on Monday endorsed a $1.5 billion budget for the University of Vermont Medical Center that will allow the Burlington hospital to charge commercial insurers 6 percent more for services.

The budget will allow the hospital to collect an additional 6 percent — or $200 million — in net patient revenue. That's well above the 3.5 percent ceiling that the board had recommended for fiscal year 2022. Even as they approved it, the regulators expressed unease at the steep insurance charge hike, which will likely lead to higher prices for ratepayers.

But the board ultimately decided that the medical center needed the additional revenue to confront its long-standing access problems, which were thrust back into the public eye earlier this month in a Seven Days cover story.

“What's kept me up at night is that approving a 6 percent commercial rate is really tough to swallow,” said board member Jessica Holmes. “But what’s tougher for me to swallow is thinking that if we reduce it below that, we as a board will be ... limiting the resources necessary for the medical center to address what I think we all see now as a patient access crisis.”

More than two dozen patients told Seven Days last month that they had endured frustrating and sometimes debilitating waits for appointments at the UVM Medical Center, a years-old situation that the pandemic has worsened. The backlogs have increased pressure on frontline workers, who say they no longer feel like they can provide the highest level of care. Many are now considering leaving the hospital.
Human Services Secretary Mike Smith announced an investigation into the problem, saying his agency will examine all Vermont hospitals in hopes of figuring out why delays for specialty and primary care exist and what can be done to shorten them.

Days later, the Green Mountain Care Board announced that it, too, would assist with the probe. Regulators took their first step on Monday. They ordered the UVM Medical Center to develop a strategic plan for reducing wait times and requiring that health network leaders submit quarterly progress reports moving forward.

It's unclear when the strategic plan will be due, but a letter from UVM Health Network CEO John Brumsted to the care board last week previewed what it's likely to say.

Brumsted detailed steps the medical center has taken to reduce wait times, from ramping up recruitment efforts to employing technology to better use the resources it already has. He outlined ways that the state could attract more health care workers, emphasizing the need for investments in housing, education and loan forgiveness. And he requested that the state increase Medicaid payments to help shift some costs off private insurers.

But Brumsted wrote that what the medical center needs most is the financial “flexibility” to respond to the crisis.

“We are seeing the effects of multiple years of lean budgets,” Brumsted wrote. “We are efficient and low-cost, and will remain so, but we need to have enough revenue to invest in our people and our facilities. Without that, now and in the future, we will not be able to recruit and retain the talent we need."

The medical center entered the budget cycle on solid financial ground. Budget documents show the hospital projects to have a $1.2 billion fund balance, providing about 184 days of cash on hand. It also projected a $127 million surplus in fiscal year 2021, thanks in large part to a massive dump of federal coronavirus aid.

Still, health network leaders maintain that the UVM Medical Center needs additional funding to combat the wait times crisis and prepare for the demands of the future. Otherwise, they say, the Burlington hospital may need to consider cutting services.

The message seemed to resonate with regulators, who came close to approving the UVM Medical Center's proposal in full.

They granted the medical center's proposed 6 percent patient revenue growth target while trimming only one percentage point from its requested 7 percent private insurance increase — a figure that health network leaders said was necessary to compensate for the paltry reimbursement rates of government plans. The reduction will result in about $5 million less revenue.

The board was less forgiving of a requested increase at another UVM Health Network hospital: the Central Vermont Medical Center, which had asked to raise its net patient revenues by 6.5 percent. Citing previously missed financial targets, the board reduced the Berlin hospital’s growth target to 5.7 percent. Porter Medical Center, the health network’s other Vermont hospital, requested and received a 4.9 percent increase.

In a statement to Seven Days, Brumsted said the three hospitals' budgets proposed by the UVM Health Network represented exactly what the hospitals needed to "meet the needs of our communities and to make real progress on improving access to necessary services.”

“The Board’s decision to cut our budgets will make it even more difficult to accomplish those goals,” he wrote.