by Mike Del Trecco, VAHHS President and CEO
As you can tell from Devon’s legislative update, it’s been a busy time for health care in the State House. Last Friday, hospital leaders from across Vermont, along with VAHHS, testified before a joint meeting of the House Health Care and Senate Health and Welfare Committees about the critically important work we are doing to improve the health care system for our patients and communities.
Our message was straightforward and sincere: Vermont’s hospitals recognize the financial pressure facing families, employers and the state, and we are taking meaningful and sometimes difficult steps to address affordability while working just as hard to keep care local.
We shared with lawmakers that the status quo is not sustainable, as you’ve heard me say more than once. Hospitals know that, and we are acting accordingly.
Across Vermont, hospital leaders are rethinking how care is delivered and how institutions work together. Increasingly, the answer is collaboration and partnerships to share providers and staff, create scale through group purchasing and making sure patients get the right care in the right place at the right time as affordably as possible.
Here’s what that work looks like on the ground. At Gifford Medical Center in Randolph, for example, leaders noticed something troubling, but also full of opportunity: inpatient beds sitting empty, while beds at Dartmouth and UVM Medical Center were overflowing. Through coordination with both academic medical centers, more patients who can safely receive care locally are now doing so. Gifford has doubled its inpatient numbers, while patients spend less time traveling far from home.
UVM Health is responding to requests from our smaller hospitals to find ways to share specialists, such as cardiologists and urologists, where those hospitals do not need, or cannot afford full-time specialists, but want to keep services local and more affordable.
Northeastern Vermont Regional Hospital already shares a pharmacy director with North Country Hospital and collaborates on HR policies, saving time and money.
Smaller hospitals are also finding strength through a more formal collaboration that’s showing promising results. Several independent hospitals now belong to the New England Health Collaborative, where they are sharing business insurance, pooling employee health insurance and participating in group purchasing.
These examples are not the exception; in fact, they are fast becoming the rule. Each hospital is working with AHS to develop their own individual transformation plans that include ways they can operate more efficiently within their organizations and also how they can formalize more of these types of collaborations.
This work is anchored by the VAHHS Affordability Action Plan developed last year, which has three areas of focus.
First, meeting FY 2026 budget guidance. Working with legislative leaders and the Green Mountain Care Board, hospitals committed to eliminating $230 million in operating expenses. That work is already happening. These were real reductions, including administrative cuts, operational changes and productivity improvements across all levels of the workforce, including physicians. These decisions were made carefully, with one goal in mind—to minimize impacts on patient care.
Second, committing to additional savings. Through our partnership with Kaufman Hall, a nationally recognized consulting firm, hospitals have identified and committed to reducing another $100 million in costs over the next two years. This brings total operating expense reductions to $330 million by FY 2028.
Third, committing to transformation in partnership with AHS. As I mentioned above, hospitals are working with the Agency of Human Services and with each other to develop regional and systemwide transformation plans that preserve access, particularly in rural communities where hospitals are often economic anchors as well as health care providers. These efforts have already identified approximately $40 million in additional targeted savings.
Taken together, this work puts Vermont on track to meet state consultant Oliver Wyman’s 2030 savings target two years ahead of schedule—incredible work by state leaders and our hospitals.
At the same time, readers need to know that transformation is not easy work. I’d be remiss if I didn’t toss a little dose of reality into this column too! A key ingredient to getting this right is ensuring our hospitals and health care institutions are financially stable, and many continue to be in really precarious financial condition. It will be absolutely essential that we keep this in mind when examining new proposals, legislation, policies and regulatory changes. If we get this part wrong, we can easily and unintentionally cause harm that would slow progress.
Transformation requires real investments, tradeoffs, trust and a willingness to change long-standing practices. Some people will see changes in service along the way too. That’s the delicate balance of ensuring that the most affordable care is accessible across Vermont. But please know that Vermont’s hospitals are leaning into this moment because we know that what’s at stake is affordability for patients and a health care system that is strong, high-quality and local.
As the voice of Vermont’s hospitals, VAHHS is proud of where we are today and we also know full-well there’s much more to be done. Thanks for taking the time to read and have a great week.
Vermont Association of Hospitals and Health Systems
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