State regulators approve smaller than requested rate hikes for two hospitals in UVM Health Network
The Green Mountain Care Board on Friday approved mid-year rate increases for the University of Vermont Medical Center in Burlington and Central Vermont Medical Center in Berlin — but at only a small fraction of what the hospitals were asking for.
The hospitals were seeking a 10% rate increase to cover what administrators called historic inflationary pressures. But on split votes, the board instead authorized Central Vermont to raise its rates 2.7% and UVM to raise its rates 2.5%.
In a press release issued after the board’s vote, UVM Health Network President and CEO John Brumsted said the reduced rate hike will not cover the expenses piling up for the medical system.
“The Green Mountain Care Board’s decisions on mid-year budget adjustment requests from the University of Vermont Medical Center and Central Vermont Medical Center, after multiple years of denying hospitals the budget increases necessary to ensure access to services and invest in facilities, have put at risk major portions of Vermont’s not-for-profit, community-based health care safety net,” Brumsted wrote.
“More revenue is needed to cover the increased cost to both hospitals for providing the care that Vermonters count on.”
UVM Health Network argued that inflation was causing price increases to everything from medicine to surgical equipment. The network also said the ongoing labor shortage forces hospitals to pay higher wages to traveling nurses and full-time staff.
“The Green Mountain Care Board’s decisions on mid-year budget adjustment requests from the University of Vermont Medical Center and Central Vermont Medical Center... have put at risk major portions of Vermont’s not-for-profit, community-based health care safety net."
Friday morning's meeting was the third hearing the board held for the UVM price hike. Before voting, Green Mountain Care Board Chairman Kevin Mullin said the entire Vermont health care system is becoming unaffordable and unsustainable.
“I don’t think that this solves the problem. But it recognizes the shoes that the people at UVM are in now, given the nature of the pressures that have been put on each and every one of our hospitals around the state,” Mullin said before supporting the increase.
“They’re not alone. And I think these pressures are being seen by hospitals throughout the country. And not just by hospitals — by nursing homes, and everyone else that’s delivering health care.”
The board voted 3 to 2 in support of the reduced price hikes.
Board member Tom Pelham voted against the mid-year price increase, saying that allowing hospitals to come in mid-year to raise their rates went against everything the Green Mountain Care Board is supposed to be doing to control health care costs in Vermont.
“We should deal with it in the regular budget process, and we should we deal with it in the context of our efforts on health care reform which are picking up momentum and speed,” Pelham said. “And increases now seem to be quite contrary to the goals that we have for ourselves and health care reform.”
The decision to allow UVM to raise its rates follows a similar request from Rutland Regional Medical Center, which was seeking a 9% rate hike.
"Increases now seem to be quite contrary to the goals that we have for ourselves and health care reform.”
The board rejected Rutland’s request last week. At the UVM meeting, some board members said they thought Rutland’s financial situation was not quite so dire, and that the hospital had more cash on hand to make it through until the next budget process, which will happen this summer.
Rutland Regional President and CEO Claudio Fort declined to comment on the UVM decision.
Fort said his hospital was still figuring out how it would make it through the rest of the year after the board denied a rate increase.
"Rutland Regional's leadership team is evaluating cost-reduction strategies and the level of deficit we can realistically fund from our cash reserves," Fort said. "This process will take some time as the health and welfare of 60,000 residents of the greater Rutland County area depend on these services."
The UVM Health Network will now have to negotiate the price hikes with the state’s insurance providers.
But the board’s decisions mean that every small business owner who offers insurance, along with any Vermonter who pays insurance premiums, will see an increase in their health care costs.
“Hospitals must be held accountable for meeting their annual budgets,” said Blue Cross and Blue Shield of Vermont spokesperson Sara Teachout. “They need to balance both cost pressures and expenses along with all of Vermont’s employers and families.”