The cumulative patient generated revenue across all 14 Vermont hospital budgets is slated to rise 5.84 percent in Fiscal Year 2013. That is an increase of roughly $142 million from last year, bringing the total hospital revenue base for Vermont up to about $2.1 billion.
This number comes from the Green Mountain Care Board today, which finished its initial review of state hospital budgets. After that review, it rejected budgets from Middlebury’s Porter Medical Center and Morrisville’s Copley Hospital. Even when the board made every requested exemption asked for by the two hospitals, the two budgets still came in above the 3.75 percent cap in exemption-included revenue increases.
Copley came in at $384,572 above the threshold and Porter was $465,931 above the mark. The board told those two hospitals to cut that amount from patient revenues and resubmit their budgets by early October.
When budgets are adjusted for what the board considers cost-neutral items — like changes in physician practices and costs borne from the closing of the Vermont State Hospital — changes in hospital revenues range from a decrease of 0.22 percent at North Country Hospital in Newport to a 10.01 percent hike at Porter, which is the highest increase in the state.
Green Mountain Care Board Chair Anya Rader Wallack explained why it’s important for the state to control hospital revenue increases.
“This is 40 percent of total health care (costs) in the state, and health care spending has been increasing at two to three times the rate of our income growth in recent years,” she said. “We can’t sustain that.”
Vermont’s hospital budgets account for a larger percentage of state medical costs than in other states, said Wallack, because many of Vermont’s physicians are employed by these medical centers.
In addition to the roughly 40 percent of Vermont health care spending injected into community hospitals, Vermonters spend a significant amount on physician services, drugs, supplies and administrative costs related to health insurance.
The 5.84 percent increase in hospital budgets represents the total increase in actual revenues when cost neutral items are removed. When exemptions for technology improvements and other board-approved upgrades are subtracted from hospital budgets, the rise in overall Vermont hospital revenues this next fiscal year is 2.66 percent.
Correction: The revenue base is $2.1 billion, not million, as originally reported.
