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Vitality of Our Hospitals

March 15, 2019

The financial health of our hospitals has been in the news this week. It’s a critically important topic that requires continued and careful discussion.

Concerns about the health of hospitals, especially rural hospitals across the country, are not new. Since 2010, as many as 100 hospitals have closed nationwide. Many more have downsized or eliminated critical, but costly, services such as obstetrics, dialysis and cancer treatment. Vermont health care leaders have been watching and studying these trends. Recent news that some of our hospitals are challenged financially has brought the issue close to home.

Our hospital and health system is set apart from other states by several key characteristics we should take pride in and protect fiercely. First, we are a system of non-profit hospitals. Believe it or not, that’s unusual. Most states have, at least in part, a for-profit system. These hospitals produce profits for owners. Here in Vermont, dollars hospitals earn for delivering services are reinvested in the mission to improve care and build strong communities.

This non-profit system reduces competition between hospitals and enables collaboration for the benefit of all. Take for example the work we are doing to increase inpatient mental health capacity. In other states, this work would more likely take place in isolation rather than with regard for a statewide, comprehensive approach. Vermont’s team approach extends beyond our hospitals and into communities where organizations including designated agencies, schools, and local officials are partnering and making real progress by coming together.

And of course, all of this work is anchored by our innovative and nationally recognized health care reform work under the state’s All-Payer ACO Model. This is where the real magic is happening, as providers are now able to invest more of their most precious resource: time on keeping their patients and our communities as healthy as possible.

We can be proud of what we are doing together to protect our oft-cited “best in the nation” system of hospitals and health care providers. What we cannot do is take it for granted. The fact is, for all of our hard work, our health care system is fragile.

Each year, when hospitals go before the Green Mountain Care Board for budget review, there are some who report negative operating margins. Leading a hospital, like leading any complex system, is tough work. Our hospitals manage multiple payers including those who underfund – meaning they reimburse the hospital less than the actual cost of care provided. Our hospitals manage workforce shortages that challenge them to hire and retain nurses, physicians, information technology experts and many others.

Meanwhile, hospitals are managing crises in substance use disorder, in mental health needs and, as our state continues to gray, in caring for more older patients with complex needs. These variables, coupled with major national changes, leave little room for error.

A Vermont hospital is generally its area’s largest employer, the biggest contributor to area social organizations caring for vulnerable people and, most importantly, the only 24/7/365 provider of critical health care services available for miles. That hospital is staffed by your neighbors who deliver babies, perform surgeries, treat cancer and conduct ground-breaking research.

Think now of what happens if that hospital’s financial health, or even survival, is jeopardized.

This is why our hospitals, in partnership with so many others, are working hard to maintain healthy margins – signs of strength, stability, and stewardship – as they continue to innovate and transform to serve Vermonters affordably and with great value and quality.

The only thing certain about the future of health care is uncertainty. Here in Vermont, we are facing that uncertainty head on and together. As always, the health and wellbeing of our people and communities is at the center of everything we do.

Jeff Tieman, President, and CEO