Health Care

Financially troubled Brattleboro Retreat may close a quarter of its beds

The Brattleboro Retreat. Photo by Kevin O'Connor/VTDigger

The head of the Brattleboro Retreat is considering closing about a quarter of the psychiatric hospital’s beds to help address its financial woes. 

Louis Josephson, president and CEO of the state’s largest psychiatric facility, said he’s moving in that direction after Agency of Human Services Secretary Mike Smith said that the state won’t provide more cash to the beleaguered Retreat. 

“I hear Mr. Smith. He doesn’t have a dime to give us,” Josephson said in an interview Tuesday. “We have to take our destiny into our own hands.”

The facility operates more than half the psychiatric treatment beds available in the state. The Retreat is licensed for 149 beds, including the state’s only inpatient psych beds for children and adolescents. It also includes capacity for involuntarily hospitalized patients, medication assisted therapy for opioid addiction, an LGBTQ adult inpatient program, several inpatient units and a school for young patients.

Last week, Josephson met with Smith, and asked for a $2 million injection of cash, as he described the Retreat in dire financial straits. When Smith declined, Josephson told him in a letter that the board had directed him to plan for a sale or closure of the Retreat.

On Sunday, Smith issued a biting public response. The state could not keep pouring taxpayer money into the struggling institution, he said. He accused the Retreat of asking for “bailouts.” 

The state had recently granted a rate increase that would total $5.3 million by 2021, Smith said. They had also provided a $3.5 million annual rate increase as well as payment for 12 new Level 1 beds, which serve patients with the most acute conditions.

“Make no mistake, any threat of closure is both the decision and the result of the Retreat’s current leadership,” Smith said in response.

Contingency plans

According to Josephson, the financial prognosis was not a threat. “It’s a fact,” he said. 

Right now, the Retreat has about 30 days of cash on hand, he said. The facility houses roughly 104 patients a day. They may not even have enough money to complete the facility for the 12 new beds, according to Josephson.

“We have to shrink as an organization,” he said. “We’d rather have some Retreat available for Vermonters than no Retreat available.”

He attributed the financial losses to a high number of Medicaid patients. The public insurance pays less to the hospital than private insurance. About 70% of inpatient admissions and 50% of the total patient population are on Medicaid, according to Josephson. The Retreat also had fewer patients than expected in the past few months. 

The financial decline began after Tropical Storm Irene washed away the Vermont State Hospital in 2011, he said. The Brattleboro Retreat added 14 beds to pick up the slack.

“We began a transformation with unintended consequences to become a Medicaid-dependent organization,” Josephson said. 

Closing a portion of the Retreat’s beds would decrease its dependency on state funding and make the hospital more self-sufficient, Josephson contended. He said he’d try to keep the units for children and adolescents, as well as the beds reserved for the most serious psychiatric patients. The state would have to figure out how it would accommodate the patients at other facilities.

Josephson added that he still may want cash from the state to help with the short-term transition. 

“The budget isn’t going to get easier, there’s no guarantees,” he said. But “part of me is intrigued by taking our fate back into our own hands.” 

Brattleboro Retreat trustees notified the state they are considering options including sale or closure this week. Photo by Kevin O'Connor/VTDigger

The prospect of closure of the state’s primary psych hospital has sent state and hospital leaders into a state of harried trepidation. They spent the weekend walking a tenuous balance: offering assurances that Vermont patients won’t be left without the services they need while scrambling to find a contingency plan if the situation took a turn for the worst. 

Since Josephson sent his letter, he and officials from the state have formulated a rough contingency plan. 

If the Retreat did have to start the process of closing its doors, they would first halt admissions, according to Josephson. Young patients would gradually be transferred to Champlain Valley Physicians Hospital in Plattsburgh, New York, an affiliate of the University of Vermont Medical Center. The hospital won’t be able to accommodate the roughly 20 patients currently at the Retreat, according to Sarah Squirrell, commissioner of the Department of Mental Health. Adults would be spread throughout hospitals throughout the state, or transferred to the nearby Rutland Regional Medical Center, which has 16 inpatient beds.

That plan is just “due diligence,” assured Squirrell. 

She said she was optimistic that the Retreat would not close. “Certainly it’s in the interest of AHS to find a path forward in the short term,” she said.

‘A shock to the system’

Meanwhile, the state’s hospital association aims to convey to the public the impact that the shuttering of the Retreat would have on the rest of the state. Hospital leaders are “extremely concerned,” said Jeff Tieman, president and CEO of the Vermont Association of Hospitals and Health Systems. “This is a really challenging and difficult but really vital situation for us to figure out how to get right. The system of mental health care hangs in the balance.”

“If the Retreat closes, we are very concerned about the impact on patients, their families and the statewide system of care, particularly if they do so quickly,” said Robert Althoff, medical director of psychiatry for Champlain Valley Physicians Hospital. In an effort to mitigate the effects, his facility “will always accept appropriate referrals for pediatric patients seeking voluntary treatment.”

Lawmakers also said they’d be keeping abreast of the developments as the legislative session launches this week. Senate President Pro Tem Tim Ashe, D-P/Chittenden, said he hadn’t decided whether the state should provide more funding to the Retreat, though he added he’d like to examine the rate that the state pays for each Medicaid patient.

His first priority is keeping the facility open. “If it wasn’t there we’d be in very dire straits,” Ashe said. “I don’t see the notion that we’d lose the Retreat outright at all as an option to be contemplated.”

Ginny Lyons, chair of the Senate Committee on Health and Welfare, said she also wanted to look into some of the issues underlying the financial instability, including whether the Retreat should be regulated by the Green Mountain Care Board. 

Kevin Mullin, chair of the board, said he’d leave it to legislators to decide whether the board should intervene. But the Retreat’s closure would be “a shock to the system that would be very difficult to absorb,” he warned.

This week, the Retreat’s leadership will meet with Agency of Human Services officials as well as hospitals and legislators. Those discussions will help determine its future, according to Squirrell.

“We recognize the significance of the role of the retreat,” she said, but added that its future will boil down to one question: “What is the socially and fiscally optimal size of the Retreat?”

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Katie Jickling

About Katie

Katie Jickling covers health care for VTDigger. She previously reported on Burlington city politics for Seven Days. She has freelanced and interned for half a dozen news organizations, including Vermont Public Radio, the Valley News, Northern Woodlands, Eating Well magazine and the Herald of Randolph. She is a graduate of Hamilton College and a native of Brookfield.

Email: [email protected]

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