The University of Vermont Health Network expects to lose $152 million this fiscal year because of the coronavirus crisis.
The UVM Health Network outlined a series of steps to fill the gap Friday, including reducing salaries and eliminating retirement benefits for leadership, freezing new hiring, reducing doctors’ pay, and halting new capital projects.
Those measures will save $25 million for the network, which lost $44 million in March alone. UVM Medical Center and the five other hospitals in New York and Vermont that make up the network also received a $37.9 million check from the federal government to help offset the losses.
“This pandemic is incredibly challenging at an unprecedented time for those delivering health care around the world and we are no exception,” said CEO and President John Brumsted. “We’re essential to health care delivery in this region. We know we need to respond to the clinical challenges and the very significant financial challenges.”
Vermont hasn’t experienced the flood of Covid-19 patients that officials had feared, but the virus has incurred a heavy financial toll on hospitals. The state’s hospitals are collectively losing about $100 million a month, a revenue decrease of between 40% and 80%, according to Jeff Tieman, president and CEO of the Vermont Association of Hospitals and Health Systems.
Last week, Gifford Medical Center in Randolph canceled its Barre-based adult day program, Project Independence, which served about 16 people a day, according to spokesperson Ashley Lincoln. On Wednesday, Northwestern Medical Center requested a 15% rate increase from the Green Mountain Care Board to help address its budget shortfall.
The UVM Health Network attributed the majority of its losses directly to the pandemic. It has canceled all elective procedures and appointments since March 17. Earlier this month, the hospital staff outfitted UVM’s Patrick Gym to care for up to 100 Covid-19 patients. That space has not been used, even as health officials have said the number of coronavirus infections has already peaked.
It has also created new testing facilities, stopped collection of unpaid patient bills, and provided an extra week of pay for employees earning less than $99,000 a year. UVM Medical Center, the largest hospital in the network, has also furloughed 400 employees, and reduced hours and pay for others.
Measures to address Covid-19 have cost the network a total of more than $20 million, and resulted in a 50% reduction in medical care.
The network-wide loss is expected to balloon to $152 million by the end of its fiscal year, which ends in September.
To help make up the difference, the hospitals cut the pay of about 300 of the network’s 14,000 employees, imposing a 5% cut for directors and a 10% reduction for vice presidents and above, according to Brumsted. Administrators eliminated performance-based pay for hospital leaders and physicians, a move which will reduce doctors’ pay by around 10%. He said the network has also stopped hiring consultants, paused construction of a 25-bed inpatient psychiatric facility, and has halted hiring.
Brumsted said the UVM Health Network could make up a portion of the shortfall by continuing to furlough and reduce hours of staff members. But getting people back to the hospital for primary care visits and regular appointments is “what really will get us back to where we need to be,” he said. “That’s the most important piece of this.”
This story was updated at 5:15 p.m. Friday with comments from CEO Brumsted.
