The University of Vermont Medical Center announced on Friday that it would pause construction of a new outpatient surgical center indefinitely, just weeks before it had planned to break ground.

Construction at the South Burlington site won’t begin until next spring at the earliest, according to the hospital. That means it will be at least two years — and possibly more — before the first surgeries can be performed there.

The decision comes as the hospital seeks to comply with a recent budget order from the Green Mountain Care Board that will slightly reduce the amount of money it can charge commercial insurance companies. Vermont hospitals operate on a fiscal year that begins October 1.



“This is not the step we wanted to take, because we know this will delay our ability to reduce wait times for surgeries that patients desperately need,” Dr. Stephen Leffler, the hospital’s president and chief operating officer, said in a press release. “We will continue to assess the situation and proceed as soon as we are able."
Hospital officials say the new outpatient center will help them meet the anticipated demands of Vermont’s aging population. The hospital projects it will need to eventually perform 4,000 more surgeries per year than what it can handle today.

The Green Mountain Care Board approved the $130 million project this summer. But the board was not willing to back the hospital’s latest budget request, which sought to raise prices on commercial insurance companies another 8 percent.

Instead, regulators ordered the UVM Medical Center to lower what it charges private insurers by 1 percent. They justified the move in part by noting that the Burlington hospital has managed to turn a profit the last few years and was now on solid financial ground.

Regulators also reduced the budget proposal at a second UVM Health Network hospital, the Central Vermont Medical Center in Berlin. The network says the decisions have left it with a $122 million budget gap it now needs to fill.

“The state regulator’s decisions about our nonprofit safety net hospitals are significant enough that we have no choice but to make some reductions in the care we deliver in Vermont, in addition to further increasing behind-the-scenes expense cuts,” Sunny Eappen, the health network’s CEO, wrote in an open letter last week.

The hospital did not reveal on Friday how much it expects to save by delaying the surgical center project. Nor did it spell out what additional cost-cutting measures might be on the way.

A fundraising campaign meant to raise 10 percent of the project’s cost will continue despite the construction pause.

In a statement to Seven Days, Owen Foster, chair of the Green Mountain Care Board, said the regulators appreciated UVM's "thoughtful approach and understanding" of Vermont's health care affordability crisis.

"This pause will allow UVM to continue its focus on its fundamentals and operations," Foster wrote, "and I am optimistic they will be able to realize the surgery center at the right time."