UVM Health Network at risk of $20 million loss in FY24 as financial woes continue

CORRECTION: The UVM Health Network is facing a possible $75 million shortfall in revenue in fiscal year 2024, which would result in a budget loss of $20 million rather than a budgeted positive margin of $55 million. Also, the Green Mountain Care Board reduced the amount UVM Health Network hospitals could charge commercial insurance companies. A previous version of the story mischaracterized the nature of the cuts.

The University of Vermont Health Network won't fill 130 open administrative positions as part of an effort to stave off a possible $20 million loss for fiscal 2024, which ends on Sept. 30.

A projected $75 million shortfall in revenue would result in the loss, rather than the $55 million positive margin anticipated in the FY24 budget.

Health Network executives hope to cut $20 million in "expenses for administrative services that support operations for all health care partners in the Network." The UVM Health Network includes UVM Medical Center in Burlington, Central Vermont Medical Center in Berlin, and Porter Medical Center in Middlebury, in addition to three hospitals in upstate New York.

Health Network spokeswoman Annie Mackin said Friday in an email that it's difficult to point to "one specific patient impact" from the cuts, because positions were reduced "all over the organization," but wait times for appointments, which are already long in many cases, could get even longer as a result of the cuts.

"If you think about improving access to care as an example, to get someone in quickly for an appointment you need the clinical team, but you also need many additional staff to schedule the appointment, maintain the IT system, keep the facilities open and clean, etc.," Mackin said. "Not hiring into some of those positions impacts the speed at which those teams can do all the work that is needed of them, which in turn impacts patients."

"The reductions in open positions will unfortunately reduce the ability to make progress on key patient-care and patient-experience initiatives, but are a necessary consequence of mandated budget cuts," the UVMHN news release stated.

Green Mountain Care Board reduces requested insurance charges from UVM Health Network hospitals

In Vermont, hospital budgets must be approved by the Green Mountain Care Board, which regulates major areas of the health care system in the state. The Care Board reduced the requested increases from all three Network hospitals for how much they could charge commercial insurance companies.

• Central Vermont Medical Center asked for a 10% increase in commercial rates, which was cut to 5% by the Green Mountain Care Board. A request for a two-year increase of 20% was reduced to 15%.
• Porter Medical Center asked for a 5% increase in commercial rates, which was cut to 3.1% by the Green Mountain Care Board. A request for a two-year increase of 20.1% was reduced to 13.2%.
• UVM Medical Center asked for a 10% increase in commercial rates, which was cut to 3.1% by the Green Mountain Care Board. A request for a two-year increase of 20.1% was reduced to 13.2%.

Last September, Green Mountain Care Board Chair Owen Foster characterized the commercial rate increases granted by the Care Board as still being "extreme."

"The hospital price increases are more than double medical inflation over the last two years," Foster said in a statement. "While we recognize the extreme costs these increases impose on Vermonters, it is important we invest in and support our hospitals. Where appropriate, the Board limited hospital price increases and required additional reporting and planning to promote efficiency and access."

Multi-million dollar budget surpluses for the UVM Health Network are long over

UVM Health Network's financial predicament stands in stark contrast to years past − pre-pandemic − when the Network often ended its fiscal year with a multi-million dollar surplus it then had to decide how to spend, with guidance from the Green Mountain Care Board.

What things cost:UVM hospitals in 'deteriorating' financial position, want more money. Here's why.

In FY23 the Health Network eked out a $3 million margin, which was $47 million less than it hoped to achieve.

"This follows several years of persistent financial losses and the compounding impact of the pandemic," UVMHN says in its news release. "Without pandemic relief funds, the Network would have lost $162 million in FY20, $54 million in FY21, and $145 million in FY22."

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Self-scheduling is coming to MyChart patient portals in 2024, and more eConsults

UVM Health Network announced several other initiatives to both save costs and improve access to health care, which are mandates from the Green Mountain Care Board:

• Launch self-scheduling in MyChart in FY24 so existing patients will be able to directly schedule appointments and services at times convenient for them.
• Expand eConsult services across the system throughout the fiscal year. eConsults allows physicians to receive virtual patient consults from specialty care providers, often eliminating the need for a separate referral appointment and reducing the time it takes for patients to receive care.
• Identify additional ways to reduce the amount of time patients stay in the hospital when it is more appropriate for them to be transferred to a different care setting.
• Continued scrutiny of new hiring. While the hiring of patient-facing and clinical roles remains a priority, hiring into these positions is now evaluated more stringently.

More:UVM Health Network proposes $18 million program to address mental health crisis in Vermont

Inflation, staff shortages and budget cuts

At the same time it strives to reduce the amount of time patients stay in the hospital by sending them somewhere else, UVM Health Network acknowledges "a lack of post-hospital care options in the region," in its news release.

Dr. Sunny Eappen, president and chief executive officer of UVM Health Network, sums the situation up by saying "historical approaches and methods have failed to keep up with the changing landscape of operating a rural academic health care system."

"We are taking a hard look at who we are and what we need to do to be a sustainable health care organization," Eappen said in a statement. "That is our commitment to our communities."

Contact Dan D’Ambrosio at 660-1841 or ddambrosio@freepressmedia.com. Follow him on Twitter @DanDambrosioVT.