GMCB Gets Somewhat Tougher on Hospital Budgets

By Hamilton E. Davis

   The Green Mountain Care Board on Thursday ground some more money out of the proposed spending by Vermont hospitals, trimming here and there on the budgets for four of the hospitals that breached the Board’s cap of 3.4 percent inflation for the fiscal year that begins Oct. 1. Their methodology precluded an immediate determination of just how much money is involved; the Board’s finance chief, Mike Davis, will get the final figures by early next week.
   I set out the parameters for the four in a post yesterday entitled A Crummy Deal -- a proposal by the four hospitals to reduce their roughly $15 million total overage by 20 percent. Total spending for Fiscal Year 2017 in the 14-hospital system, will run to $2.4 billion.
   The offerings for cuts were worth a little over $3 million. The Board’s decisions, all reached by unanimous voice vote of the five-member panel, were as follows:

Southwestern Vermont Medical Center in Bennington:

   The Board with little discussion let the 20 percent offer stand for Southwestern. The members judged that the Bennington facility showed clear evidence of budget discipline over the last few years, and has to deal now with significant problems in that region.

Northwestern Vermont Medical Center in St. Albans:

   The Board was more critical of the budget performance by this hospital. The 20 percent offer for Northwestern amounted to a cut of $168,000 in the overage total of $836,000. The Board increased that by figure linked to the hospitals requested rate increase charged to insurance carrier(s). My guess is that the final order will amount to an increase in the cut by another couple of hundred thousand dollars. (I will look much more closely at Northwestern soon.)

The University of Vermont plus Central Vermont Medical Center:

   The decision for those two hospitals, which are now partners, but whose systems are not yet sufficiently integrated to permit consideration of a single budget, had their reductions increased from the offer of 20 percent to 30 percent. Neither Mike Davis nor the Board members could come up with a quick dollar estimate for the effect of that decision.

N.B. The Board formally approved the submitted budget of Copley Hospital in Morrisville, with the understanding that Copley, now under new management and with its budget pretty much of a total mess, will have to submit a revised budget within the next three months.