State Regulator’s Orders Create $122 million Budget Gap for Coming Fiscal Year
Vermont Business Magazine University of Vermont Medical Center is temporarily pausing construction of its planned outpatient surgical center. This decision comes as the hospital works to meet the obligations of Green Mountain Care Board orders that significantly reduce its budget for the new fiscal year, which began this month. These budget reductions are due in part to further budget reductions imposed by the Green Mountain Care Board related to increased patient demand for care that exceeded approved limits on the amount of care we provided last year.
While planning related to the project may continue, active construction will be paused until next year at the earliest. UVMMC said in a statement that this decision is an early step of a difficult, but necessary process to reduce our budget, which will impact our ability to deliver the care patients need.
The GMCB had approved the building of the outpatient surgery center in a 3-2 vote on July 29, 2024.
When built, the new surgery center will increase the UVM Medical Center’s surgical capacity by initially adding eight operating rooms, 12 prep rooms, and 36 recovery spaces, which will include eight extended-stay recovery rooms. The project in South Burlington will also allow UVM Medical Center to shift all surgeries from its Fanny Allen operating rooms, which cannot be expanded or further updated. The project is estimated to cost $130 million.
“Our population is getting older and sicker, which means they need higher levels of care – including surgeries. When it is built, this facility will allow us to deliver more affordable, high-quality care in a more appropriate setting for most patients. But as a nonprofit hospital, we are in the difficult position of having our budgets cut substantially when we are trying to respond to the health needs of our community,” said Stephen Leffler, MD, president and chief operating officer of UVM Medical Center.
“This is not the step we wanted to take, because we know this will delay our ability to reduce wait times for surgeries that patients desperately need,” Dr. Leffler said. “We will continue to assess the situation and proceed as soon as we are able. In the meantime, we will do everything we can to minimize impacts on our patients, communities and staff.”
UVM Medical Center originally intended to break ground and begin construction on the surgery center this fall, with it taking roughly 18 months for the facility to be open to serve patients in mid-2026. Delaying the project will push the opening into 2027, at the earliest.
Planned Facility Would Address Growing Care Needs
A dramatic demographic shift in Chittenden County – where the population is both growing and aging – is largely responsible for driving increased demand for outpatient surgical services at UVM Medical Center. Without construction of the facility, which will be more efficient and offer more space, the hospital projects its current surgical capacity to fall short of demand by nearly 4,300 cases annually by 2030. Third-party experts hired by the GMCB validated UVM Medical Center’s analysis.
The shift to an outpatient setting for surgeries addresses anticipated future capacity needs, improves efficiency and minimizes the need for inpatient hospital stays, letting patients return to their regular lives sooner.
After more than a year of review, the GMCB approved the application for the project this past summer, with numerous conditions that differed from the original project proposal and made it more challenging to operate the facility sustainably.
Prior to the recent annual budget review process, UVM Medical Center had reviewed the impacts of these conditions and decided it was in the best interest of patients to move forward with the project even with the imposed conditions.
One of those conditions was a fundraising campaign to cover at least 10% of the total cost of the project. The campaign has seen early success and despite the decision to pause, will still continue.
Budget Orders Made the Pause Necessary
In its recently issued orders, the GMCB reduced the budgets of two UVM Health Network hospitals – UVM Medical Center and Central Vermont Medical Center. In addition to the cuts from the budgets proposed by the two hospitals, the GMCB also penalized UVM Medical Center for meeting increased demand and providing more care to patients than was approved for the 2023 Fiscal Year. The cumulative impact of the board’s reductions on both hospitals and enforcement action on the care provided at UVM Medical Center created the need to cut approximately $122 million worth of patient care and support expenses for the current fiscal year – the equivalent of closing the health system’s Vermont hospitals for 17 days.
UVM Health Network leaders recently shared with patients, as well as government and community stakeholders, that reductions to clinical services impacting patients and to the administrative departments that indirectly support care would be needed to follow the state regulator’s budget orders. The decision to pause the outpatient surgical center is a first step, but additional actions will be necessary. The health system is approaching these decisions thoughtfully with the goal of minimizing the impact on patients to the extent possible.
About University of Vermont Health Network
University of Vermont Health Network is an integrated system serving the residents of Vermont and northern New York with a shared mission: working together, we improve people’s lives. The partners are:
University of Vermont Medical Center
University of Vermont Health Network Medical Group
University of Vermont Health Network – Alice Hyde Medical Center
University of Vermont Health Network – Central Vermont Medical Center
University of Vermont Health Network – Champlain Valley Physicians Hospital
University of Vermont Health Network – Elizabethtown Community Hospital
University of Vermont Health Network – Porter Medical Center
University of Vermont Health Network – Home Health & Hospice
Source: UVMMC 10.4.2024.
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