When the floodwaters of Tropical Storm Irene surged into the Vermont State Hospital in August 2011, staff loaded 16 of the most severely ill patients onto a Greyhound bus and sent them to the Brattleboro Retreat.
It was not just a temporary solution — the patients stayed. The state, Retreat CEO and President Louis Josephson recalled recently, “said, ‘we’ve got people, can you take them?’” Retreat staff at the time “just said yes.”
The Irene catastrophe knit together the futures of the state and Vermont’s largest psychiatric facility.
Since 2011, the Brattleboro Retreat has added 14 beds to accommodate the Irene transfers and is currently in the process of constructing 12 more at the behest of the Legislature.
The state hospital shuttered for good after the storm and in the intervening years, the Retreat became a de facto state facility for some patients; the Retreat has the only beds in Vermont for children and adolescents and offers much-needed outpatient services, including drug treatment for 150 people.
Now it’s in a precarious financial position. Earlier this month, Josephson described the challenges: A staffing shortage, $1 million in overdue taxes, and insufficient cash on hand to cover a surprise bill. Josephson also portrayed the hospital as the go-to for the state in times of crisis. Officials, too, described the Retreat as indispensable.
Agency of Human Services Secretary Mike Smith pointed out that the state had already provided the facility with $5.3 million in rate increases, which were included in the budget adjustment Wednesday.
“This health care provider is simply too critical for us to let fail,” declared Gov. Phil Scott at his recent State of the State address.
Lawmakers from Windham County, where the Retreat is located, described the mutual dependency as they pressed the state for more funds.
“Since Tropical Storm Irene, the Retreat has served as a contracted arm of the Agency of Human Services in the provision of state mental healthcare services,” they said in an open letter that requested more government funding. “This means the Retreat has repeatedly been faced with decision-making that requires it prioritize the public good over profit.”
Smith saw the situation differently: He declined to provide an additional $2 million requested by Brattleboro leadership, referring to it as a “bailout.” The secretary’s rebuff provided a departure from the interdependence the state and the Retreat have grown accustomed to since 2011.
Now that the Retreat is faltering, both sides are trying to disentangle themselves from a union they never intended. It’s proving difficult.
A boutique private retreat
The two entities haven’t always been so closely allied.
The Brattleboro Retreat was started in 1834, as a boutique private retreat for those with mental illness. A donor gave $10,000 to start the facility, then called the Vermont Asylum for the Insane; it was one of the first 10 psychiatric hospitals in the U.S. It included a gym, swimming pool, bowling alley, patient newspaper and dairy farm. It was completely privately funded and separate from the state.
That detachment didn’t last. The Vermont State Hospital in Waterbury was started in 1892 as a way to house some of the growing population of the Retreat. The hospital took 150 overflow patients within its first year.
The two institutions grew in tandem. By 1950, around the peak of institutionalization, the Retreat was serving 692 patients. (In 1954, the State Hospital housed 1,301 patients.)
As mental health care has shifted towards community based, outpatient care, the facility has been forced to adapt. By 2009, Josephson estimated that the Retreat had about 60 patients — largely privately insured. As the number of long-term patients has changed, so has its business model. The Retreat added a LGBTQ+ unit in 2009. In subsequent years, hospital leadership created niche programs for members of the military and emerging adults.
By the time Irene hit, state officials had long planned to close the Waterbury state hospital, which was beleaguered with reports of inhumane conditions and inadequate treatment for patients.
But the storm left the state with a shortage of beds and little time to plan. In February 2012, the Vermont Legislature voted to build the 25-bed Vermont Psychiatric Care Hospital in Berlin and then divvy up the remaining beds among several facilities: 14 to Brattleboro, six to Rutland Regional Medical Center, as well as a handful to less intensive settings.
For the Retreat, a nonprofit, Irene proved to be a gift for a facility struggling to reinvent itself. It would guarantee a steady stream of patients — and much-needed income. The state also promised to reimburse the facility at 100% of the cost for those 14 patients, a higher rate than Medicaid would pay.
According to those negotiating at the time, the Retreat’s motives were both altruistic and profit-driven.
“Even before those [14] beds were built, the Brattleboro Retreat was the most cooperative of any facilities I had to deal with. They would take patients no one else would take,” said Patrick Flood, who served as the commissioner of the Department of Mental Health during Irene. But, he added, “I do think they saw it as a good part of their business plan.”
While their business model was “evolving,” Flood said he didn’t see it as a risky investment for the state at the time. “We didn’t see any hint that they were likely to be in financial peril.”
It was a collaboration borne from mutual necessity.
By taking more acutely ill patients and involuntary patients, the Retreat made itself “indispensable” to Vermont, said Rep. Anne Donahue, R-Northfield, a mental health care advocate.
“The state really needed it in the short term and they had the building after Irene,” she said. “The irony is they’re not part of the state’s long-term vision. … We helped grow them even [though we knew] that’s not the direction to grow, it’s the direction to downsize.”
Even back then there were red flags regarding finances and quality of care, according to Doug Racine, then-secretary of the Agency of Human Services.
Not long after Irene, the Retreat was investigated and sanctioned by the feds for lack of patient oversight, and for handing over control of unruly patients to the police. Subsequently, it forcibly restrained and medicated a patient, and was found to have not properly trained its staff.
“There was concern whether the Brattleboro Retreat was going to be a strong part of the long-term solution,” said Racine.
The move had unintended consequences for the Retreat as well, according to Josephson.
After the storm, the facility started accepting more acutely ill and involuntary patients, most of whom are on Medicaid. Those patients were more expensive to care for, and are reimbursed by the government at a lower rate than privately insured patients. As the Retreat started accepting a different clientele, hospitals started calling, asking the Retreat to take a more difficult patient, or someone who was stuck in the emergency room waiting for a bed. “We started growing to meet that demand,” Josephson said.
Over the next several years, the Retreat nearly doubled its beds, from 62 to 119.
“Whether it was conscious or not, what happened, serving our most acute people in the state in the unit, the state started turning to us with greater confidence and need and demand,” he said. “We began a transformation with unintended consequences to become a Medicaid-dependent organization.”
Now, half of its total patients — and 70% of the inpatient population — are on Medicaid. According to Josephson, the Retreat went nearly seven years after Irene without an increase in Medicaid reimbursements from the state.
The Retreat started hemorrhaging money in 2015, according to a financial analysis published by the Green Mountain Care Board this month.
“The Brattleboro Retreat has not reported a positive operating margin since FY 2015,” and had accumulated a loss of $4.7 million, according to the 11-page report. Its facility was aging and its long-term debt was building up. The hospital owes the state more than $1 million in unpaid provider taxes and late fees.
“These types of losses are not sustainable from an operating perspective,” the report concluded. “Even if losses are cut 50% per year for the foreseeable future, it will be difficult for the Retreat to maintain operations.”
The Legislature also didn’t give the Green Mountain Care Board oversight; the regulatory body has purview over the state’s 14 hospitals, but not the Retreat. A turnover of three AHS secretaries in six months prevented the agency from providing consistent scrutiny.
Josephson blamed the decline in revenues, in part, on fewer patients; the staff shortage forced them to temporarily close some units and patient numbers often dip around the holidays, he said. State officials and lawmakers expressed frustration that there are backlogs in other parts of the state, as patients wait for days in the emergency room before they can get a bed for mental health treatment.
Staff complaints
At the same time, staff have issued a series of complaints about the Retreat. Eileen Glover, who worked there as a nurse from 2009 until last October, and said she’s seen an erosion of patient rights.
Retreat leadership required staff to lock the restrooms and kitchens, leaving patients to ask staff members to use the bathroom or to get a snack. Shower curtains were removed, leaving patients without privacy, she said. Glover decided to leave the job in September when a patient had to ask her for a drink of water.
“If I stay and keep basically enacting these rules, I’ve become part of the problem,” she decided. “I couldn’t in good conscience keep doing that.”
With fewer staff and more traveling nurses, regular employees would frequently be expected to stay and work a double shift; some would work a 16-hour shift at least twice a week, Glover said. Tired staff led to poorer care and more turnover.
Glover, who ultimately found a new job, is one of a steady stream of exoduses from the facility. According to Dan Watson, president of the nurses union, roughly 200 of the 550 union members had left the Retreat in the past year.
Josephson said he was unable to confirm that number. But he called the Retreat’s staffing shortage “the canary in the coal mine” for the rest of the state’s hospitals and said he had increasingly been forced to hire more expensive traveling nurses.
House member Donahue called the situation “a real crisis from my perspective in quality of care.”
“It’s really inappropriate for the state to be funding” a program with such issues, she said. Still, Donahue added that she would support some injection of cash to help out the institution.
Both sides have asked the other for favors. In 2018, state officials asked the facility to build 12 new beds to address the overburdened mental health system and gave it $5.5 million for the project. They also provided a $3.5 million annual Medicaid rate increase in November, in addition to the $5.3 million proffered by the state last week.
The Retreat has repeatedly asked for Medicaid increases over the past several years.
Now both sides are trying to envision a future on their own. Josephson said he’d likely try to cut dependence on state funding and close at least a quarter of the facility’s beds. The state would have to find a place to house the remaining displaced patients. “We have to take our destiny into our own hands,” he said.
The state has developed a contingency plan of its own; if the Retreat does have to shutter, the state would send as many patients as possible to various hospitals around the state. Some of the children would be sent across the lake to the inpatient facility in Plattsburgh, New York. Vermont Mental Health Commissioner Sarah Squirrell acknowledged that the state doesn’t have the capacity to accommodate all the patients.
The state has required that the Retreat hire an independent firm to look at its finances. It will also evaluate outpatient services for efficiencies and review its admissions process for patients. Retreat leadership also has agreed to meet weekly with the Agency of Human Services.
Meanwhile, a chorus of state and hospital leaders have pushed to ensure that the Retreat will survive.
Jeff Tieman, CEO of the Vermont Association of Hospitals and Health Systems, said it would be “painful” if the Retreat closed. Hospitals are “very reliant on the Brattleboro Retreat,” he said.
“The state is a partner,” said Rep. Laura Sibilia, I-Dover. “The entity is at risk, there’s urgency that needs to be brought to bear for the patients.”
The Retreat will likely live to see the future. But if Smith has his way, the relationship will not revert to one of co-dependence.
“This is math at this point,” he told the House Health Care Committee. “We’ve got to figure out the math.”
Correction: A previous version of this story incorrectly characterized federal sanctions imposed on the Retreat.
