VAHHS urges support for hospital budgets after pandemic year as GMCB begins hearings

Vermont Business Magazine Vermont Association of Hospitals and Health Systems President and CEO Jeff Tieman today issued a warning about the ongoing pandemic response, workforce shortages and increased patient care needs as the Green Mountain Care Board began its annual hospital budget hearings. VAHHS lobbies on behalf of the hospitals. Tieman is advocating for the regulators to support hospitals budget requests. Typically the GMCB would trim, to a greater or lesser extent, the requests made by the hospitals. Tieman said the hospitals have been under tremendous workload and cost pressures since the beginning of COVID and are more recently dealing with an increase in inflation in the general economy.

Following are remarks from Vermont Association of Hospitals and Health Systems President and CEO Jeff Tieman before the Green Mountain Care Board.

“Good morning, thank you for the opportunity to make some comments as this year’s budget review process begins. I am Jeff Tieman, president of the Vermont Association of Hospitals and Health Systems, which represents our state’s network of nonprofit hospitals. I plan to focus my comments today on a difficult trifecta of issues including workforce, COVID, inflation.

“In the 5 years I’ve been in this job, including the perilous last 18 months, I have never seen hospitals so challenged. In many ways we are in the most intense part of the pandemic so far. Our hospitals are full, they are full of very sick people, and their capacity is further tested and stressed every day.

“We have patients seeking care for mental health conditions who are stuck in emergency departments when they need and deserve a better space for treatment. In terms of COVID, we are back in the business of prevention and vaccination and testing. And complicating all of this is the monumental workforce challenge that creates new problems and expenses every day and leaves existing staff flat out and burned out.

“Given all these factors--and how much hospitals are squeezed by them right now--you may hear from a couple organizations a request for some degree of relief from the regulatory process. Hospitals have already submitted their budgets, they’ve done the hard work, and they’ve done it with their mission in mind.

“Now is not the time to add more concerns around financial stability to the list of their immediate challenges. The hospitals have submitted these budgets because they represent what is required to care for patients, meet community need and continue to lead us through the public health crisis.

“In terms of the budgets, a few brief notes worth highlighting: Vermont hospitals’ chargemaster increases over the past three years average 3.8%, and our revenues are growing slower than Medicare’s estimate of health care inflation (4.7%). Without other operating revenue, Vermont’s hospitals would report a negative 6.8% operating margin versus the still thin 2.3% positive one they are reporting now.

“It is also important to note hospitals’ gratitude for the CARES Act funding they received to be stabilized last year. The appearance of healthy hospital balance sheets and income statements today is largely the result of federal monies, without which we would have faced certain financial ruin and closed doors. With that backdrop, as you listen to these budget presentations I ask that you appreciate the effect of several factors:

“We are still in the middle of the pandemic. Case growth right now is higher than at any time since COVID started and the hospitalization projection is daunting. The situation remains extremely uncertain with variants, and hospitals may soon see supply shortages like those occurring in Oregon and elsewhere.

“This budget process starts long before today— instead of building budgets based entirely on need, the GMCB sets parameters through guidance, and hospitals try to manage their budget within those limits. Then, hospitals come before the GMCB with the possibility of seeing those budgets cut even further. This process has kept costs down, but has also left hospitals with less room to respond to the crises we now face. The hospitals have already tried hard to meet the conditions of the budget guidance; if they didn’t need what they are asking for, they wouldn’t be asking for it.

“Patients have delayed care during the pandemic and that has caused many to come in sicker than they would otherwise. This had led our hospitals to see significant increases in census, further stretching staff and increasing wait times. In addition, even before the pandemic, Vermont was managing a mental health crisis that only worsened during COVID and requires a response at all points along the care continuum.

“The workforce challenge we face is so urgent and severe that it affects every other piece of the business, from the times patients wait for procedures to the costs of labor all along the continuum of care.

“Hospitals have played a pivotal role in keeping Vermont safe and weathering the worst of the pandemic so far. This is an important reminder of how hospitals are a critical part of infrastructure and public health apparatus. Similarly, with the continued uncertainty, hospitals must remain prepared.

“Thank you for your careful and thoughtful consideration of these budgets. We made most progress during the pandemic by working together and understanding the situation we face collectively. I hope that collaboration and partnership continue through these hearings.”