GMCB begins hospital budget review

Montpelier, VT – Hospitals around Vermont are preparing their budget requests for the Green Mountain Care Board to review. As board members take stock of hospital’s needs and assess the state of healthcare in Vermont they say the system needs work.

The process began on Tuesday when board members met with hospitals for preliminary budget analysis, after which approval usually hinges on commercial cost, revenue, safety and patient care among other benchmarks being met.

After an early assessment, Green Mountain Care Board Chair Owen Foster noted that Vermont’s healthcare system has struggled in recent years.

“We’ve seen a trend, the last I want to say four or five years of hospitals having very serious financial needs because their financial stability has been rocked,” Foster said. “The fiscal needs of hospitals to just remain solvent have really increased dramatically over the last five years.”

Foster said nine out of Vermont’s 14 hospitals showed negative operating margins due to factors like low patient volumes, high operating costs and an aging demographic straining the healthcare system.

He has also noticed costly trends among Vermont hospitals, like patients going to large hospitals for routine checkups instead of smaller community practices, and staffing shortages that increase operation and labor costs.

“Healthcare gets really expensive when it’s concentrated at hospitals. Hospitals have expensive operations, and you want to make sure that your system has enough community providers — the mental health care, the long-term care, the primary care — to try and keep care out of more expensive places,” continued Foster.

“There’s still a pretty heavy reliance on traveling nurses. The prices have come down but the volume of need for traveling nurses has not abated as much as we’d like.”

Foster noted that financial difficulties in the healthcare system cause medical costs to rise and insurance rates to spike, forcing Vermonters to pay more than residents of other states, but said the board is looking for ways to keep the state’s healthcare system sustainable.

Individual hospitals will begin presenting budget requests through August and September, and the Green Mountain Care Board will return budget rulings in early October.

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