Hospital budget caps set by Green Mountain Care Board

Vermont health care authorities issued instructions to the state’s 14 hospitals Wednesday to keep the increases in their 2013 budgets to 3.75 percent, an even tighter lid than the last two fiscal years whose Legislature-imposed limits were 4.5 and then 4.0 percent.

The cap was set by the Green Mountain Care Board, which under state law has the authority to establish hospital budgets. The action is a significant cost constraint for the whole health care system since the state’s hospitals and the doctors whom they employ deliver more than 60 percent of the care in the state.

Anya Rader Wallack

Anya Rader Wallack. VTD/Josh Larkin

“Keeping a tight rein on the 2013 budgets is an important step in our efforts to build toward a single payer restructuring in the state,” said Anya Rader Walleck, the chair of the Green Mountain Board. “The state’s hospitals have done an excellent job on cost containment in the last two years, and we need to keep moving in that direction.”

The board built the budget target from a baseline of a 2.76 percent increase in a federal market basket of inflation indicators and then adjusted it to 3.75 percent to account for increases in hospital costs due to aging of the population, growth in income and other investments, such as improvements in information systems. If the hospitals stay within the caps, the system increase for the year would be $78 million on a base of roughly $2 billion.

As in the past two years, hospital budget writers will have the option to ask for exemptions to the cap for items that the board believes are essential to efficiency in the system as well as to health care reform itself. These include:

•Investments by a hospital to participate in the state’s plan to replace the Vermont State Hospital.
•Increases in the provider tax levied by the Legislature.
•Acquiring doctor practices that would not add to the overall cost to the system. That means practices already operating in the hospital service area and not new practices brought into the area.
•New revenues that would accrue from serving new patients from outside the state.

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17 Comments on "Hospital budget caps set by Green Mountain Care Board"

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Bethany Knight
4 years 4 months ago

Ham, this is totally Back to the Future! Didn’t this article first appear about 20 years ago??? Arghhh…well, at least you know what that ole ‘market basket’ is this, this time around. 🙂

Joyce Wilson
4 years 4 months ago
So a “tighter lid” on the hospital budgets to get ready for single payer! Now why would I choose a VT hospital over an out of state hospital, like Dartmouth? I’d much rather be seen in a hospital that has more rational flexibility in meeting health care needs that isn’t tied to an arbitrary fixed budget. That way there is less worry about cutting corners and rationing care to stay within the fixed budget. This is more like the old days on HMOs. Once the Green Mountain single payer health care system arrives, how will they force similar budgetary constraints… Read more »
Bob Zeliff
4 years 4 months ago
These rate caps have been developed with substantial discussions with the Hospitals. All are trying hard to control costs. I think we should be proud to our hospitals and health care providers. I really don’t understand you complaint! You would rather pay more? Do you really relate the more you pay with the quality of care? Do you drive a Mercedes? they cost more so should be better….at least a status symbol. Actually facts say that care costs do not correlate well with care quality. You can always do that, contribute money to any Hospital, they all have funds for… Read more »
Allan Wylie
4 years 4 months ago
Rate caps is another for name price controls and we have lots of experience with that strategy. It produces imbalances on the supply side, which, in other scenarios leads to a black market. In this application, we are already seeing a black market which is going to Poland or India for medical care. What’s not recognized by the Vermont legislators is that there is the law of supply and demand and it cannot be circumvented. You can put regulations on top of it, but it then responds to that environment in predictable and distorted way. While we don’t like to… Read more »
Joyce Wilson
4 years 4 months ago
Bob, I have actually donated money to my local hospital’s cancer center and I don’t drive a luxury car, but your questions are off topic. The point to be made is that single payer health care systems control costs with blunt instruments = arbitrarily fixed budgets, global and (or) capitated payments. Vermont hospitals will be constrained by the limited budget and may be forced to cut corners and ration care, likely by waiting times, as done in Canada. If I am diagnosed with a suspicious lesion that may be cancer and I have to wait four weeks or longer for… Read more »
Bob Zeliff
4 years 4 months ago
I’m glad that you have donated to your local hospital, but do not respect them enough manage their resources efficiently so you feel you will have to travel out of state for health care? I You say you will spend the same out of state as Vermont but you want to travel to do it. Again your logic escapes me. Do you have any data that says out of state hospitals cost less, or offer faster service. From the data I’ve seen Fletcher Allen is amount the best in the country. From my personal experience with my parents Rutland regional… Read more »
Joyce Wilson
4 years 4 months ago
Bob, I have actually donated money to my local hospital’s cancer center and I don’t drive a luxury car, but your questions are off topic. The point to be made is that single payer health care systems control costs with blunt instruments = arbitrarily fixed budgets, global and (or) capitated payments. Vermont hospitals will be constrained by the limited budget and may be forced to cut corners and ration care, likely by waiting times, as done in Canada. If I am diagnosed with a suspicious lesion that may be cancer and I have to wait four weeks or longer for… Read more »
Joyce Wilson
4 years 4 months ago

Here is just a little background information on hospital ratings from US News Reports. Both Fletcher Allen and Rutland Regional in 2011 rating had a low nurse to patient ratio. The Green Mountain Care Board has put an ever tightening squeeze on the hospitals in VT with the arbitrary budget cap. 2013 will be an even tighter budget cap on the VT hospitals than 2012 and 2011!

http://health.usnews.com/best-hospitals/fletcher-allen-health-care-6130001/cancer

Jason Kelley
4 years 4 months ago
I just read with interest the article from The Montreal Gazette referenced by Joyce Wilson. It simply states that one particular hospital in Montreal cannot offer screening colonoscopies to Montrealers who do not normally receive their care within that hospital’s system. The author actually goes on to point a finger at the private clinics that have been set up in Montreal as a cause of the problem. It would be a real stretch to read this article as a condemnation of all health care in Canada or even care in the greater Ville de Montreal. Incidentally, the fact that we… Read more »

[…] commission is almost here.  On April 19th the Vermont Digger posted an article entitled “Hospital budget caps set by Green Mountain Care Board“, which basically informs us of the […]

walter carpenter
4 years 4 months ago
“At the same time Vermont, with its tiny population (15% of British Columbia’s), had a waiting list for the same procedure that exceeded 150 patients.” Thanks, Jason. When I was dying several years ago, and the doctors were giving up hope, I got this way because I had to spend a month simply finding a physician/specialist (insurance network problems was the cause for this), then at least another month before I could even get an appointment, then another month to try to get the procedure I needed. Fortunately, when the doctors saw the stage I was at, they overrode the… Read more »
Joyce Wilson
4 years 4 months ago
This is an excerpt from the Montreal newspaper article: “And it’s not just low-risk patients who are affected. Those with a first-degree relative with colorectal cancer – which places them in the high-risk category – have told The Gazette that they have been waiting longer than a year for a colonoscopy. In one case, a 50-year-old patient, whose father underwent colorectal-cancer surgery and whose grandfather died from the same disease, has been booked for a colonoscopy in 2014.” Vt Digger readers should read this article and draw their own conclusions. Read more: http://www.montrealgazette.com/news/Royal+Victoria+Hospital+turning+away+patients+colonoscopies/6237231/story.html#ixzz1soyBOML6 You say, “Under a single payer system,… Read more »
John Greenberg
4 years 4 months ago

Assuming the report Joyce Wilson refers to — http://www.montrealgazette.com/news/Royal+Victoria+Hospital+turning+away+patients+colonoscopies/6237231/story.html#ixzz1soyBOML6 — correctly portrays the situation, it implicates one department of one hospital. Should we really draw conclusions about the Canadian health care system on that basis? Is Joyce Wilson seriously suggesting that there are no similar (or worse) problems at American hospitals?

Dan McCauliffe
4 years 3 months ago

John, Waiting times for colonoscopies are even worse at the Montreal Jewish General hospital – 5 years for high risk patients and 7 years for routine colonoscopies. http://www.globalmontreal.com/video/colonoscopy+wait+times+in+quebec/video.html?v=2205010992#stories
There numerous other examples of prolonged waiting times in Canada. Other countries that provide universal access to health care at far less cost than the US, do not have such long waiting times. Representative Cynthia Browning recently questioned the wisdom of Vermont’s choice of using the Canadian model for health reform, when she spoke at a health care reform meeting in Manchester recently.
http://www.manchesterjournal.com/editorials/ci_20637150/worth-try
and http://www.manchesterjournal.com/letters/ci_20698113/health-care-forum

Joyce Wilson
4 years 4 months ago
“Charles Adler and guest Dr. Brian Day on Canadians not being treated as customers, falling through the cracks of our medical monopoly.” http://www.sunnewsnetwork.ca/video/featured/prime-time/867432237001/healthcare-horrors/1456820505001 Back to the emphasis of this Vermont Digger article to controlling health care costs with the Green Mountain Care Board putting an arbitrary budget cap on Vermont hospitals and an ever tightening squeeze. Plus see my earlier post to a link US News & World Report 2011 ranking of hospitals. In the 2011 ranking,both Fletcher Allen and Rutland Regional were falling behind. The nurse to patient ratio in 2011 was already low and the Green Mountain Care… Read more »
Bob Zeliff
4 years 4 months ago
Joyce, Your US News article shows the results of the current system failing. Don’t confuse that with the future. Right now hospital have to absorb i.e. cost shift or cute cost because Medicade significantly under funds due to rate setting from Washington. Note Vermont has stepped up some what to augment this but we don’t have a lot of money for more. On top of this the hospital also have to aborb i.e. cost shift or cut costs when ever it is Forced to treat those with out insurance. These are just a few of the flaws in the current… Read more »
Joyce Wilson
4 years 4 months ago
Good for you Bob that you are confident that arbitrary budget constraints put on the Vermont hospitals by the Green Mountain Care Board is part of the solution. Did you look at US News & World Reports rankings of hospitals? Vermont hospitals in the 2011 rankings were not holding up compared to rankings of other hospitals in the country. The nurses to patients ratio was low already in 2011 and is a very important indicator of adequate patient care when hospitalized. “..providing MORE funds to the hospital which they do not have.” The Green Mountain Care Board is putting a… Read more »
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