University of Vermont Health Network won’t build the inpatient psychiatric unit it planned at Central Vermont Medical Center in Berlin unless it regains its financial footing, its leaders told state regulators on Wednesday.
The psychiatric unit, a project that has been in the works since 2018, would have added 25 adult beds on top of its existing 15 beds. The need for inpatient mental health beds has only grown in the pandemic, and the health network estimates that this trend will continue.
John Brumsted, president and CEO of the UVM Health Network and the University of Vermont Medical Center, blamed the delay on the board’s recent denial of a large midyear price increase. The network wanted to raise charges to cover a $44 million deficit. Regulators allowed an increase of only $14 million.
At a price tag of $158 million, the psychiatric project is beyond the financial capabilities of Vermont’s 11 other hospitals.
“The ball’s in your court,” Brumsted told regulators on Wednesday. “That (money) either sits there and simmers until hopefully we can resurrect this project.”
Wednesday’s hearing was the health network’s first appearance before the Green Mountain Care Board since the rate decision. Brumsted told regulators the network has temporarily suspended all of its building projects, and is considering scaling back some services.
The Berlin hospital’s adult psychiatric unit project has been stuck in the planning phase for almost four years. Around that time, the Green Mountain Care Board ordered the network to commit $21 million of its surplus from fiscal year 2017 to projects that improve psychiatric bed capacity. The network quickly pledged the money to the Central Vermont Medical Center project.
On Wednesday, Brumsted suggested the network return the remaining $20 million and let the board decide how to spend it. But even if the network handed that money back to the state, it’s unlikely that another organization would be able to pick up such an involved construction project.
Regulators at the Green Mountain Care Board said they’d like the project to move forward in some form. They asked Brumsted to consider a request for assistance from the state or a collaboration with other health care facilities.
“I don’t think your request is unreasonable,” board chair Kevin Mullin told Brumsted at Wednesday’s hearing. “You can’t lose additional money. I’m just trying to figure out what would make this project viable so that it could happen.”
This is the second time the health network has put the project on hold. The hospital operator suspended the project in 2020 because of the coronavirus pandemic. Before that, planning had slowed because of disagreements on the size and cost of the project.
UVM Health Network continued its planning in 2021, aiming to open the unit in 2025. But hospital system leaders said they’re delaying now because of the budget shortfall. The network estimates that adding the psychiatric unit to the mix would increase its operating deficits by $25 million a year.
The unit at Central Vermont Medical Center would have been a four-story building connected to the main hospital, featuring natural light, exercise areas and access to the outdoors. The unit was supposed to have single-occupancy rooms large enough to accommodate psychiatric patients with complex medical needs.
Correction: The estimate of how much the psychiatric unit would increase the UVM Health Network's operating deficit has been clarified.
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