Hospital leaders highlight challenges and opportunities as they manage staff shortages and inflation pressures and seek to recover from COVID-19
Vermont Business Magazine The Vermont Association of Hospitals and Health Systems (VAHHS) urged the Green Mountain Care Board (GMCB) to approve their budgets as submitted as they prepare for hospital-by-hospital hearings with the regulatory body beginning next week. Hospitals are calling their fiscal year 2023 budget request “stabilization budgets,” as continued staffing shortages and high demand for care and historic inflation stress the system almost to a breaking point.
Most hospitals are requesting double digit increases this year. The hospitals maintain that between the pandemic, global supply and workforce issues, rising costs and tight budgets going back several years, that most hospitals in Vermont are running a deficit and need the increase simply to hold their ground.
These challenges are not unique to Vermont, as hospitals across the country are feeling the same stresses, causing some to close operations. What is unique, however, is our regulatory structure, which requires hospitals to obtain approval of their budgets from the GMCB.
Mike Del Trecco, interim president and CEO at VAHHS, spoke today during a Zoom call with healthcare leaders and the press. Screen grab.
“We know that health care costs are high, and that is why our hospitals have taken such care to build budgets that include only what they need to stabilize their operations and ensure services remain for those who need them,” said Mike Del Trecco, interim president and CEO at VAHHS. “This year has to be about protecting our patients and staff and continuing to be a vital resource to the community, and that means approving these requests as submitted. Any reduction will further weaken hospitals and, as we have seen over the past several years, this will compromise the delivery system, continue the workforce crisis and add greater uncertainty for Vermonters.”
Here’s the situation according to the VAHHS: This year, many hospitals are asking for commercial rate increases in the double digits—the highest average request since the GMCB was created. Historically, the GMCB has approved budgets at or below medical inflation. Over time, this has eroded hospital margins—the money left over after expenses that would be used to invest in staff, facilities, services and equipment. This has caused hospitals to delay repairs and new equipment purchases and made it harder to hire staff. At the same time, a workforce crisis has worsened, requiring many hospitals to supplement labor from contract or “traveling” nurses and physicians at significantly higher cost. Inflationary pressures have caused the cost of equipment and supplies to soar, and challenges in the mental health and long-term care sectors mean patients are staying in the hospital much longer than necessary at very high cost because there are not adequate beds to discharge them to. This is a perfect storm of challenges on the heels of more than two years of global pandemic stress.
“Something has to give, and our hospitals and their providers and patients need relief now,” Del Trecco said. “We have to act to steady our hospitals if we expect any sort of recovery to be possible in the years to come. Our hospitals are critical community assets that need support to thrive.”
The hearings will take place over two weeks beginning on August 1 and concluding on August 26. You can follow the process here.
Learn more at VAHHS.org
8.11.2022. Montpelier, VT – Vermont Association of Hospitals and Health Systems