State hospitals request $1.8 billion, a 6.6 percent increase

Vermont's hospitals have finishing filing their budget requests with state officials and are asking for $1.8 billion, an increase of approximately 6.6 percent from this year. 13 hospitals in total submitted their requests, which come to a combined amount of $1,804105,066, about $122 million more than the current hospital budgets.
The budget requests were made earlier this month to the Department of Banking, Insurance, Securities, and Health Care Administration. BISHCA is scheduled to approve the budgets and the rate increase requests by September 15, although there will likely be some downgrades for certain hospitals.
The final cost of hospital care in Vermont is calculated to finish up higher, due the exclusion of Bennington's Southern Vermont Medical Center. SVMC is currently under investigation by BISHCA following the hospital's reports of multi-million dollar fiscal year losses. The numbers also exclude the Vermont State Hospital, the Brattleboro Retreat, the White River Junction VA Medical Center, and New Hampshire Dartmouth-Hitchcock Medical Center, which cares for a large portion of Vermont patients.
Fletcher Allen Health Care in Burlington submitted the largest request, a spending plan of more than $923 million a $52 million increase from this year. The Rutland Regional Medical Center and Berlin's Central Vermont Medical Center also made large requests. Rutland Regional Medical Center requested $189 million, an increase of about $10 million. The Central Vermont Medical Center asked for $144 million, a step up of about $18 million from their current level of spending.
In addition to their 2010 budget requests, hospitals also submit their rate increases for service charges, one of the top factors responsible for increased health insurance premiums. The average rate of increase is 6.5 percent. Historically, BISHCA approves a lower amount than what is asked for.
Vermont hospitals have recently sought to increase spending thanks in part to a rise in the number of patients. Hospitals have also had to increase spending to purchase new equipment and hire new staff, in addition to paying off acquired debt.
The Obama Administration has encouraged hospitals to cut spending as part of its effort to reform the nation's health care system. While the White House has asked for $220 billion in cuts over the next decade, the American Hospital Association has agreed to $150 billion. Currently, there has been no real pressure on hospitals to reduce spending, but it remains to bee seen how these new proposals will affect hospital budgets in the future.