Del Trecco: Affordability crisis everywhere we look—health care, housing, fuel, groceries

by Mike Del Trecco, CEO, VAHHS It was another very busy week last week, as you’ll read in our legislative report and in the headlines of today’s Update. We’re over the midway point of the legislative session and those at the State House are working feverishly to get things done. We’re also just starting our hospitals’ budget review process. There’s a lot on the line in both areas. Folks on all sides of the biggest issues like housing, public safety and education have strong opinions about what we should do, but progress requires creativity, nuance and compromise. That’s especially true in health care.

There is an affordability crisis everywhere we look—health care, housing, fuel, groceries and the list goes on from here and Vermonters are feeling the pinch. Despite many well- meaning ideas, there’s a limit to the money available to fund them. 

Let’s face it, Vermonters are getting older and with age comes the need for increased and sometimes more intensive health care services. 

And demands are growing significantly in housing, k-12 education needs and social services, too. So, how do we reconcile the need for more of everything with our limited ability to pay the tab? It’s an extremely delicate balance, but one we have to fight to the best of our collective ability to strike.

For our hospitals, we are taking several approaches. First, looking to our federal partners, Vermont hospitals are exploring the AHEAD Model as a next phase of health care reform. I’ll spare you the specific details of this program for now. The important thing to know is that AHEAD is one more approach to working with the Centers for Medicare and Medicaid Services to increase payments from Medicare with a goal toward reducing costs and increasing access for Vermonters. 

Of course, there’s much more to it and as with most new things, there is uncertainty. We will manage the intricacies of the program as we learn more. Second, looking to our state partners, we are working with the Agency of Human Services and lawmakers on strategies to cover more Vermonters who may be uninsured or underinsured to be sure they can access care—especially preventative care—to lower costs and improve their health. 

We’re working with our regulators and state consultants on other strategies to identify gaps in services and enhance partnerships. You may have read in my VAHHS Update column last week about some of the many partnerships already in motion to better serve Vermonters. In addition, we are advocating strongly for more state support for wraparound and non-hospital services that keep people out of the hospital, when possible. 

These services could improve care, increase access for those do need hospital-level care and have the greatest impact on lowering costs. While working with all of these partners on these important initiatives, our hospitals are putting together budgets for the upcoming fiscal year that seek to balance the demands of access and keeping care local while working to keep costs down and operate efficiently.

Speaking of those budgets, this past week, our regulator, the Green Mountain Care Board issued its annual budget guidance to hospitals kicking off the FY 2025 budget cycle process. Hospitals have been asked by our regulators to keep revenue growth to 3.5 percent. That’s a very tall order when the reality of the current cost pressures are closer to 7%. 

These pressures are not just a Vermont experience; our neighboring states are facing increase of the same 7 to 8 percent. Despite these cost realities, we agree that we should do all we can safely do to keep costs as low as possible for our communities. Hospitals will keep this target in mind as they build budgets guided by what our patients and communities need to access high-quality care. 

Because budgets are about money, we sometimes lose sight that our costs are directly tied to the value and the services we provide to bring babies into the world, help people live better and healthier lives and ultimately to die with dignity.

There’s a lot swirling for sure, especially around fiscal issues in our state. Our hospitals are economic anchors in their communities, so ensuring that they are stable and thriving is paramount. 

That is why we’ll continue to fight for policies and partnerships that both hold costs as low as possible and improve care, while building smart and thoughtful budgets that invest in providers and staff, provide modern, high-quality care and keep services close to home, especially in rural communities.

Thanks for reading and have a great week.