MONTPELIER – Vermont medical professionals packed the Statehouse Wednesday to deliver a grim diagnosis: Proposed cuts in physician reimbursements and a tax hike on hospitals will undermine the quality of health care in the state.
About 220 physicians, nurses, administrators and medical staff – many attired in white smocks and a few with stethoscopes draped around their necks – arrived en masse to deliver that message to lawmakers.
The 18 professionals who testified in the House Chamber spelled out a wide array of harmful impacts that would come as the result of Gov. Peter Shumlin’s budget cuts if they are passed by the legislature.
In a well-choreographed morning hearing, the medical professionals spelled out a cascade of implications for patients and the health care community, ranging from longer waiting times and cuts in services to difficulty attracting new physicians, a decrease in quality of care and critical wellness programs, and even the threat that some of the state’s smaller hospitals may be forced to close.
Arlene Law, an emergency room registered nurse at Southwestern Vermont Health Care in Bennington, said her 99-bed hospital is the second oldest in the state and needs renovations and upgrades to its outpatient care spaces and surgery programs. As the hospital struggles to maintain quality care, it could now face an additional $3.1 million in provider taxes, she said.
Law said the current path of under-reimbursements for care (under Medicaid) and rising taxes is “unsustainable” – an oft-quoted catchword that echoed in the House chamber on Wednesday.
Dr. Phil Brown, a physician who now serves as medical director (the “dark side,” as he put it) at the Central Vermont Medical Center, said the hospital has a profit margin of less than 1 percent.
“I understand the need to balance the budget,” he said. “But not on the backs of the hospitals.”
“My concern is that Gov. Shumlin’s new budget proposal will severely impact our ability to sustain clinical services that our patients need,” he said.
The state faces severe budget pressures, and the parade of medical professionals testifying before members of the House and Senate health committees is a gauge of the unpopularity of some of Gov. Peter Shumlin’s proposals. In January, Shumlin, a Democrat, also floated a budget that raises $30 million in new revenues through a variety of “provider” taxes — a levy on insurers, hospitals and dentists.
This isn’t the first protest this session. In recent weeks, groups have protested cuts they say hurt important services, including service providers in mental health, housing, home care and veterans care. Wednesday it was the hospitals, physicians and staff who gave a few key lawmakers an earful, while respectfully sympathizing with the fiscal realities legislators face.
“We understand how tough times are,” said Dr. Fred Kniffen of Porter Medical Center in Middlebury. The small hospital, he said, is feeling the pinch as well and is $2.5 million in the hole.
Providers are object to two of Shumlin’s proposals for bridging a budget gap that now hovers around $173 million in the next fiscal year.
The governor has proposed increasing the hospital provider tax from 5.5 percent to 6 percent of net revenues in the 2012 budget. He has also proposed eliminating the Catamount Health program and merging it with the Vermont Health Access Plan, a move the Vermont Medical Society says will cut already low physician reimbursement rates by 33 percent. (They would receive Medicaid level reimbursements under the plan.)
The proposals play out against the backdrop of the governor’s controversial push to move Vermont to a single-payer health care system.
Dr. Ken Borie, a physician for 31 years at Gifford Hospital in Randolph, said the hike in the hospital tax would cost his hospital $1.7 million. The hospital is expected to lose $500,000 with the Catamount merger into VHAP.
The move would “put us in the red,” he said. The state’s 10 small nonprofit hospitals are “already fragile” and if the budget passes as proposed, cuts in staffing and services are the only alternative, he said.
Terry Bruce, a trauma center volunteer who heads engineering and maintenance at Rutland Regional Medical Center, said declining reimbursements and a steady squeeze have forced his hospital to cut 40 full-time employees). The governor’s proposed budget could mean another 45 layoffs, he said.
“I don’t think cutting the budget is going to work,” he said.
Dr. Dan Foley, an OBGYN at Rutland Medical Center, noted his hospital is the second largest employer in the county with 1,500 staffers, and it gave away $4.6 million in care last year. (According to the Vermont Association of Hospitals and Health Systems, hospitals in Vermont last year provided almost $48 million in free or reduced cost care.)
Hospital representatives said they have done what they can to cut administration and boost efficiency, and now the only thing left is services and lowering the quality that Vermonters expect from the medical community.
Foley said constant financial pressure was undermining the entire structure of Vermont’s health care system.
“I strongly urge you to consider the law of unintended consequences,” he said.
Dr. Robert Tortolani, a family physician at Brattleboro Memorial Hospital and past president of the medical society, said that Vermont’s health care system is already under stress, and the governor’s proposal will make matters worse.
He said the state already has an estimated shortfall of 25 primary care physicians, whose efforts on the front line forestall people getting care at much higher cost in emergency rooms. Doctors are feeling tremendous financial pressure; in a survey, physicians 50 percent were uncertain if they’d be running their business in five years.
The relatively low salaries in Vermont are also making it harder to attract new physicians to fill a shortage. Vermonters now receive and expect high quality care but if the squeeze continues, quality care will suffer, Tortolani said.
“It’s imperative that we do not lose this,” he said.
The Medical Society recently proposed some alternative measures, which included a delay in folding Catamount into VHAP. Lawmakers at the hearing were receptive but blunt about the challenges they face.
Sen. President Pro-Tempore John Campbell, D-Windsor, who noted his wife is a nurse and sister a doctor, said lawmakers would do their “due diligence” in drafting a budget and welcomed hearing from the front line.
House Speaker Shap Smith, D-Morrisville, said he “appreciated the input,” but he added: “Quite frankly, you are one piece of the puzzle.”
Afterward, he reinforced that refrain, declining to back any changes in the governor’s budget proposal, saying simply lawmakers were “taking everything into consideration.”
Sen. Anthony Pollina, D-Washington, who sits on the Senate Health and Welfare Committee, listened to the testimony, and said it was ironic Shumlin has said he won’t raise taxes to avoid difficult cuts yet is proposing to hike taxes on already squeezed hospitals.
Pollina, a longtime progressive advocate, said the legislative leadership isn’t considering alternatives.
“They’ve got certain doors they’re not looking behind,” he said.
