Vermont’s hospitals reported $107 million in losses since the start of the fiscal year due to Covid-19, which state regulators called “very troubling.”
The pandemic has left the state’s health care system in a precarious financial position, according to data presented at a Green Mountain Care Board Wednesday. Combined, Vermont’s 14 hospitals reported a combined $77 million in losses in March and April alone.
“The state is all hands on deck here to try to figure out how to … ensure that Vermonters still have access to essential services,” said Alena Berube, who helped compile the information for the Green Mountain Care Board. “Time is of the essence.”
Board member Jessica Holmes called the reports “sobering.”
About half of the state’s 14 hospitals were already bleeding money before the pandemic hit; six reported losses in 2019. Some of the stories are more dire: Springfield Hospital filed for bankruptcy last year. Northwestern Medical Center in St. Albans reported $9.6 million in losses in early 2020, before Covid arrived in Vermont.
Covid brought additional strain to an already fragile system. Expenses rose, as hospitals bought costly personal protective gear and changed the layout of their buildings to prepare for a surge of patients. Income also plummeted after Gov. Phil Scott ordered hospitals on March 20 to cancel nonessential appointments and elective procedures.
Hospitals also lost money they had invested, as the stock market tumbled.
The University of Vermont Medical Center reported nearly $100 million in losses so far this fiscal year; only about half of that came directly from medical care and other related operations. Spokesperson Annie Mackin said last month that the six hospitals in the UVM Health Network are expecting to lose $192 million this fiscal year.
Copley Hospital, a 25-bed facility in Morrisville, lost $2.3 million in April alone, as much as the hospital lost all last year, according to CEO Joe Woodin.
The numbers may look rosier than they actually are.
Hospitals are holding onto cash; they’ve deferred paying bills, taken on more debts in loans from the federal government, and are holding onto money to stay viable, said Patrick Rooney, director of health systems finances for the Care Board. Officials have decided not to move forward with new programs or construction.
They’ve also benefited from millions of dollars in government loans and grants.
Hospitals have received advances in Medicare payments from the federal government. Some have taken out loans and received PPP loans, Rooney said
They have also received a combined $115 million from federal CARES Act funding; some, but not all of that money was factored into the loss totals, Rooney said. Gov. Phil Scott aso announced yesterday that hospitals and other health care organizations could apply for $275 million in grants to cover Covid-related expenses. Those funds would be awarded by Sept. 1.
Even with government aid, hospital losses have come “on a scale that is unprecedented in our state, and it shows the severity of Covid impact,” Rooney said.
“Things aren’t all roses,” acknowledged Green Mountain Care Board Chair Kevin Mullin in an interview. But, he added, the results could also have been much worse. “I’m thankful we’re not going to see mass closings,” he said. Unless there’s a second wave, the health care system is “going to come out of this without being completely decimated.”
Hospitals object to sustainability plans
Hospital officials objected to the board’s proposed solution. The board asked every hospital in the state to submit a detailed sustainability plan, which would include financial data, patient care statistics, and long-term planning around the cost and sustainability of each service they provide.
The concept would be “poorly timed and extremely onerous,” said Jeff Tieman, president and CEO of the Vermont Association of Hospitals and Health Systems. Hospitals do not have the capacity to do extra reporting during a pandemic, Tieman said in the public comment period of the meeting, calling the required sustainability plans “represented enormous government overreach without clear benefit.”
He worried that the board was collecting information that would ultimately result in “cutting the health care services that are available in our communities.”
“As a small hospital CEO, the timetable is totally unrealistic taking into account our limited resources as well as the necessity for our Board and community involvement. We need a lot more dialogue” Brattleboro CEO Steve Gordon wrote in a comment to the board.
The board has yet to vote on the policy; under the current proposal, hospitals would submit initial answers about financial sustainability by Oct. 31, and continue to file additional information each of the next three months. Tieman suggested delaying the process by several months.
Hospital CEOs and board members alike questioned whether the sustainability plans would actually work as planned. The problem may be a systemic issue with how health care is funded — not the fault of any individual hospital, suggested board member Tom Pelham. Woodin, of Copley, worried that focusing solely on financial success may stymie creativity or cause hospitals to cut services that are valuable but not profitable.
Mullin said the board would take feedback from hospitals and make adjustments accordingly. “The ultimate goal is getting the right care at the right time in a community setting and at a right cost,” he said. “And, he added, “while making sure the institutions stay open.”
