Second Quarter of FY 2021: One-time state and federal provider relief funding, cost control measures and patients returning for necessary health care services help to stem earlier losses
Vermont Business Magazine As the response to the COVID-19 pandemic continues, The University of Vermont Health Network has seen some progress toward its financial recovery, thanks to state and federal provider relief funding, cost control measures, and an increase in patient visits for necessary health care services during the month of March 2021. The Network announced today financial results from the second quarter of Fiscal Year 2021 and for the year-to-date of the fiscal year – which runs from October 1, 2020 – September 30, 2021.
While financial challenges persist, the Network’s current year-to-date financial position includes a positive 1.4 percent, or $17.4 million, margin. This is thanks to the results of its second quarter, ending March 31, 2021, where a positive 9 percent, or $60.9 million, margin was achieved, due largely to $83 million in one-time state and federal provider relief funding. Not including these one-time funds, the Network would have seen a $22.1 million loss for the second quarter and a year-to-date loss of $65.6 million.
Network affiliates have seen varying results for the second quarter of the current fiscal year, with three achieving positive margins (Elizabethtown Community Hospital, Porter Medical Center, and The University of Vermont Medical Center) and four seeing negative margins (Alice Hyde Medical Center, Champlain Valley Physicians Hospital, Central Vermont Medical Center, and Home Health & Hospice). Every UVM Health Network affiliate continues to actively implement plans throughout the fiscal year to address their specific financial challenges.
“Amid the ongoing challenges of the COVID-19 pandemic, the UVM Health Network’s recent financial results reflect the hard work and resiliency of our providers and staff; the trust of our patients and communities; and the importance of support from our partners in state and federal government,” said John R. Brumsted, MD, President and Chief Executive Officer of the UVM Health Network. “While we continue to face uncertainty and factors that are beyond our control, we will continue to keep the needs of our patients at the center of everything we do.”
The positive margin – funds left over after expenses which are used to invest in the sustainability and improvement of our services – is driven by three primary factors:
State and Federal Provider Relief
For Fiscal Year 2021, the UVM Health Network has received a total of $83 million in state and federal relief for the financial impact of the COVID-19 pandemic. Although cost-control measures have contributed to a significant reduction in expenses, without provider relief funding the Network would have seen losses for the second quarter and year-to-date in the current fiscal year. It is too soon to tell whether any of the Network’s six hospitals will qualify for any additional federal provider relief funding resulting from the American Rescue Plan. There is currently no additional state-based provider relief funding.
The UVM Health Network has taken significant actions to control costs including: limiting capital spending to focus on critical projects, implementing a process to review position vacancies, continuing to combine administrative functions and harnessing the power of our Network to maximize supply chain savings. The total cost savings achieved so far in Fiscal Year 2021 is approximately $38 million.
Increased Patient Visits
The third factor behind the second quarter’s positive margin is an increase in patient visits for necessary health care services to our Network. As the COVID-19 vaccine became more widely distributed and infection rates dropped in the region, we saw a significant uptick in visits for March 2021, to near pre-pandemic levels.
Thanks to the dedication and commitment of providers and staff across the Network to control costs and provide high quality care to patients, along with state and federal relief, the second quarter shows progress in the right direction. However, it is important to note that one month does not indicate a long-term trend. Although we have seen positive momentum in the second quarter, many of the same challenges we faced earlier in the pandemic – along with the systemic challenges rural health care providers faced before COVID-19 – will continue to impact the health system.
About the University of Vermont Health Network
The University of Vermont Health Network is a five-hospital system serving the residents of Vermont and northern New York with a shared mission: working together, we improve people’s lives.
The partners are:
- The University of Vermont Medical Center
- The University of Vermont Health Network – Alice Hyde Medical Center
- The University of Vermont Health Network – Central Vermont Medical Center
- The University of Vermont Health Network – Champlain Valley Physicians Hospital
- The University of Vermont Health Network – Elizabethtown Community Hospital
UVMHN consists of 4,000 health care professionals who are driven to provide high-quality, cost-efficient care as close to home as possible. Strengthened by our academic connection to the University of Vermont, each of our hospitals remains committed to its local community by providing compassionate, personal care shaped by the latest medical advances and delivered by highly skilled experts.
Source: Burlington. 5.16.2021. The University of Vermont Medical Center. UVMHealth.org/MedCenter