Vermont’s hospitals emerged from the latest coronavirus surge in a much weaker financial position than before the pandemic, their filings with state regulators show.
Most hospitals — including the state’s largest — expect to finish this fiscal year, which runs until Sept. 30, with a loss from normal operations. Taken collectively, Vermont’s hospitals expect a $63 million deficit.
Almost 70% of that — around $43 million — is attributable to the University of Vermont Medical Center in Burlington.
Central Vermont Medical Center in Berlin, part of the same network that runs UVM Medical Center, is projecting a $13.5 million deficit.
The state’s second-largest hospital, Rutland Regional Medical Center, is projecting a $12.5 million loss from operations this year.
Hospital leaders cited personnel shortages, rising inflation and an overreliance on costly travel staff as reasons for the deficits. Most have asked the Green Mountain Care Board, the body that regulates hospital growth in Vermont, for substantial budget increases in the next fiscal year to help make up for this year’s steep losses.
Looking ahead to rate requests, the care board had set a two-year growth target of 8.6% for hospitals, far above the 3.5% it usually approves. But most hospital proposals exceeded that threshold.
Rutland Regional requested a 16% increase over its current budget, almost a $44 million increase for the fiscal year 2023, which begins Oct. 1. Much of that would come from raising the prices of services for Vermonters with private insurance, which could substantially increase health insurance costs for those populations.
The University of Vermont Medical Center’s request for a 10% increase equates to an extra $150 million in fiscal year 2023. The 562-bed medical center in Burlington is a regional hub for complex medical care, medical resident training and more.
This year’s budget hearings begin in mid-August. The board expects to decide each hospital’s budget by September. The debate the board will consider typically pits consumers with commercial insurance against hospital executives.
Hospital executives often argue they need more money for facility repairs and vital services, and often warn that cuts in their budget proposals would translate into painful cuts in services.
Consumers, on the other hand, worry about being priced out of their insurance, or being forced to pay money they don’t have to cover their medical care.
The two factions are particularly at odds this year as inflation ratchets up the cost of living for consumers. The same pressures play a role in hospital finances, but, unlike previous years, Vermont’s hospitals aren’t counting on state or federal aid to save them.
Most hospitals have noted that little to no Covid aid is coming their way in fiscal year 2023, but shockwaves from previous surges continue to affect budgets. By some predictions, this fall could bring another massive Covid wave, but executives aren’t anticipating significant aid, according to their budget projections.
Exactly how the board will balance these competing needs will be decided in the next month or two. Either way, this year’s budget season will be especially important for hospitals and consumers alike.