UVM Health Network Ventures, Inc., also committed another $750,000 in a direct loan to Yankee Medical for working capital and business growth.
Ventures purchased Burlington-based Yankee Medical, which has been in financial trouble, on Nov. 10. Hospital officials announced the deal last week, more than a month after the agreement was finalized.
Yankee Medical, based in Burlington, sells wheelchairs, hospital beds and prosthetics. The owners of the company, John and Mary Ficociello, were carrying a $700,000 debt at the time of the sale. Hospital officials said the Ficociellos paid off the loan.
Michael Carrese, a spokesman for UVM Medical Center and the UVM Health Network, said Yankee Medical is currently losing money, and the hospital hopes to restore it to profitability.
“Through this purchase we do look to strengthen Yankee Medical’s finances so that they can maintain their vital role in helping people manage the health challenges at home, and improve the patient experience at discharge,” Carrese said in an email.
Carrese initally disclosed the company would receive $500,000 in working capital to finance the business. Later, when pressed, he also disclosed there would be an additional $250,000 for “business development.” All of the money is coming from directly from the hospital network.
Ventures, a for-profit limited liability company, is funded by the hospital network, whose money comes from patient revenue and public funds including Medicare and Medicaid. Ventures also owns an 18 percent stake in Aspenti Health, a drug testing company based in Burlington.
Todd Keating, the chief financial officer of UVM Medical Center and the UVM Health Network, is listed as the secretary of Yankee Medical on the business registration on the Secretary of State’s website. Carrese said Keating was “a natural choice given that he will have an oversight role in his position as CFO of the UVM Health Network.” He will not receive any compensation for the position and has no investment in the company.
Now that Yankee Medical is an affiliate of the hospital, technicians can begin home assessments for UVM Medical Center patients before they are discharged. Hospital communications staff said in a news release that “patients will still have the freedom to choose among equipment suppliers.”
Yankee Medical will continue to manage its own daily operations, and the 22 workers currently on staff will remain employees of the company, according to a press release.
Carrese said the hospital network is considering converting Yankee Medical to a nonprofit, but said it’s too early to say whether that would lead to lower prices for medical equipment.
“We did not acquire Yankee Medical to make money,” Carrese said. “We’re a nonprofit organization that invests any surpluses into meeting our mission to provide high quality care to the communities we serve.”
Carrese was also unable to say whether converting Yankee Medical to a nonprofit would result in a loss of a $27,700 in property taxes on its current North Avenue site. The property is currently owned by Fiorello Real Estate #3, LLC, a company owned by John and Mary Fiorello.
Currently, 44 percent of Burlington’s property is owned by tax exempt nonprofits, with UVM Health Network being among the largest. Its 2016 property tax bill, if it were not exempt, would total $10.5 million based on the current assessed value of its property. Burlington’s share of that money would be $3.2 million. The UVM Health Network makes a payment in lieu of tax to help defray the cost of essential city services. That payment was $446,000 in 2016.
