Vt. lawmakers to consider funding hospital sustainability study

MONTPELIER, Vt. (WCAX) - Can Vermont lawmakers keep cash strapped hospitals above water? A new proposal from state regulators aims to make rural health care financially sustainable.

In 2019, the Springfield hospital almost became a statistic -- one of more than 180 rural hospitals nationwide shuttered since 2005. After the facility filed for bankruptcy, policymakers in Montpelier sprang into action to make sure other rural hospitals stayed in the black.

From 2017 to 2019, six of Vermont’s 14 hospitals were in the red. Experts say the state’s aging population uses more resources and the pool of commercial insurance recipients is shrinking, driving up costs. The pandemic only made the situation worse.

“Right now, we’ve seen a system that’s on an unsustainable path, and care is very expensive,” said Kevin Mullin, chair of the Green Mountain Care Board.

Health care represents the biggest part of Vermont’s economy and local hospitals are huge economic drivers. In a new report this week, the GMCB is asking lawmakers for $5 million to fund a study that would look into switching all 14 hospitals from fee-for-service payment structures to “global budgets,” flat payments that cover all services for all Vermonters and help regulators account for the entire revenue stream of a hospital.

“This is something that’s reliable, predictable. They can staff accordingly because they know those dollars are coming in,” Mullin said

Hospitals say they aren’t opposed to exploring global budgets but they oppose cutting services. “At the end of the day, the goal here is to make care more effective and affordable for Vermonters,” said Jeff Tieman with the Vermont Association of Hospital and Health Systems.

The proposed change still raises many questions, including what those payments would look like, how they would be divvied up, and how telehealth and other pandemic changes will impact hospitals’ bottom lines.

Vermont lawmakers have a limited timeframe to make decisions and regulators and hospitals agree those conversations about sustainability need to happen in local communities, not at the Statehouse. “If we’re going to make big changes, we should do that by listening to the people who it will affect the most -- patients, nurses, and physicians,” Tieman said.

And the GMCB’s Mullin says getting those local conversations could get jump-started this year as long as the federal cash is there to pay for it.

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