Our Hospitals' Commitment to Cost Control, Quality and Access

There has been a lot swirling lately around health care costs and hospital budgets. It’s that time of year, when the Green Mountain Care Board (GMCB) reviews the annual budgets and subsequent rate requests from our non-profit system of hospitals. As you may recall, budgets were filed several weeks ago and this week, the first round of hearings took place. It is a process unlike any other in the country.

The fact that health care costs are simply too high for too many Vermonters is undeniable. We are fortunate to have leaders at every single one of our hospitals who not only understand this reality, but are committed to doing the hard work to reduce costs wherever they are within our control, but never ever at the expense of quality and access. Examples of this commitment can be found in how our hospitals continue to respond to the COVID-19 crisis. As the pandemic roared into Vermont, our hospital system geared up, spending millions on facilities changes, testing supplies and protective equipment. At the same time, elective procedures were suspended, causing hospital revenues to plummet by more than $220 million. In response, leaders leapt into action and quickly reduced expenses by nearly $50 million. With financial support from federal partners of about $130 million, a gap remains.

All of this was unfolding literally as hospital staffs were being asked to develop budgets for the coming fiscal year. We heard from some this week just how challenged that exercise has become. How do you even begin the work of predicting how we might be impacted by a second COVID-19 wave this fall or winter, while also estimating how much care your community may need? The answer is the same way you prepare for an invisible contagion that has no known cure: by imputing all the available data you have as judiciously and carefully as possible to arrive at a response—in this case a budget filing, that is responsible and well-founded. That’s what our hospitals have done.

It helps that we’re no strangers to challenges in health care. We live in an aging and rural corner of the country, which means our population requires a significant amount of health care. Ensuring access to critical services from daily dialysis to weeks-long NICU stays available close to home are game-changers in the quality of life our people have. These services can also be costly, especially when they are spread over the shrinking population of our region.

This dynamic is the very reason our hospital leaders remain committed to the promise of health care reform and the move away from fee-for-service health care. They are doing this not because they have to or because it’s an easier approach. In fact, it is immensely complex and hospitals assume far greater financial risk. We invest in changing how we deliver health care because it is our only hope to slow the growth in costs—and because it is the right thing to do for our patients and our state.

We have one more week of hearings before the GMCB rules on hospital budgets. These budgets are modest, responsible and reflect an unwavering commitment to excellent care in these wildly unprecedented times. We believe budgets should be thoroughly scrutinized, but never reduced or starved out of a false sense of cost saving. Vermonters are unlikely to see such cuts in the form of lower co-pays or insurance premiums, but they will certainly feel them if the care they need is no longer available close to home.

Jeff Tieman, VAHHS President and CEO