UVM Health Network fiscal year 2022 results highlight continued financial challenges and important progress

Submitted by katie on Thu, 11/17/2022 - 07:34

Focused Work Leverages Strength of Network to Stabilize Finances, Support Workforce, Provide Access to High-Quality Care

VermontBiz Extraordinary cost inflation and workforce shortages continue to impact hospitals and health systems as the University of Vermont Health Network releases its Fiscal Year 2022 year-end results. To address these broad challenges, the Network is actively implementing a focused path forward plan to improve revenue and expenses, recruit and retain talented employees and continue improving patient access to high-quality care in Fiscal Year 2023.

Financial Results:

Largely due to the sharply increased cost of labor and providing patient care, the UVM Health Network ended Fiscal Year 2022 with a $90 million loss (-3.3% margin).
The budgeted, or target, margin for FY22 previously approved by Vermont regulators was $66.5 million (2.5% margin). Operating margin is what nonprofit organizations use to invest in people, buildings and equipment, to provide the highest quality care and pay staff competitively. A financially stable health system should see a minimum 3.0% operating margin.
Without $55 million in one-time state and federal funds received in Fiscal Year 22 to support expenses previously incurred due to COVID-19 initiatives and losses, the loss across the health system in Vermont and Northern New York would have been $145 million (-5.3% margin).

Hospitals and health systems nationally are struggling to maintain vital services in the face of increased expenses, and some are reducing services to limit their losses. As a nonprofit organization committed to meeting the needs of patients in our region, the Network has instead invested in the temporary staff necessary to meet patient needs as many hospital facilities continue to be at capacity nearly every day.

“Our year-end financial results are consistent with the sharply increased cost of labor and providing patient care we have been experiencing for months,” said Rick Vincent, Chief Financial Officer of The UVM Health Network. “We know this continues to be a challenging time in health care, and we are continuing to do the hard work to stabilize our organization and protect the critical services that our patients rely on us to provide.”

The Path Forward:

In July, when all of Vermont’s hospitals submitted their proposed budgets and needed commercial rate increases for Fiscal Year 2023 to the Green Mountain Care Board, the Network announced it would also be implementing a series of initiatives, known as the “Path Forward,” to help stabilize its financial condition, while continuing work to improve the patient experience and access to care. Although the Board cut the needed commercial rates requested by UVM Medical Center and Central Vermont Medical Center – leading the organization to review all options – the Network remains committed to that important work.

“Our teams have come together with the singular goal of allowing the Network to avoid major service cuts,” said Al Gobeille, Executive Vice President, Operations, UVM Health Network. “As the last two years have demonstrated, achieving these outcomes will require continued evaluation and adaptation to an unpredictable health care landscape. But I am proud of the work our teams have done already, and the benefits we are already seeing for our patients and staff.”

Early improvements and momentum as part of the “Path Forward” include:

MRI backlog: Wait times for radiology (MRI) scans at UVM Medical Center have been reduced to two weeks from eight weeks, thanks in part to the addition of a new MRI machine. The addition of weekend appointments for patients needing diagnostic PET and CT scans have also helped drop wait times from eight weeks to four to six weeks.
·Future of Work: By offering a mix of hybrid, remote and on-site work, the Network has improved its ability to recruit amid ongoing national workforce shortages, bolstered staff satisfaction and begun cultivating a more diverse, equitable and inclusive workforce. The Network currently employs 138 employees in 37 states other than Vermont and New York. The Network has also saved about $1 million to date by reducing leases for office space no longer needed with this work strategy.
·By increasing coordination among operating rooms across the health system, the UVM Health Network can maximize patient access, helping to address a backlog that developed during the pandemic. This work also will help the Network maximize clinical quality, employee satisfaction, operational efficiency and financial sustainability. Initiatives are ongoing or in development at all Network hospitals, including at UVM Medical Center, where additional OR capacity will open at the main campus by the end of November to address backlogs in several types of surgical procedures.

This effort also addresses the number of patients who wait in Network hospitals on any given day to be discharged to a more appropriate level of care, such as to skilled nursing facilities for patients who no longer need hospital-level services, or to specialized care and community services for patients with mental illness isolated in emergency departments. These bottlenecks in patient flow will require significant action by and investment from the States of New York and Vermont. The UVM Health Network continues to partner with both states on these efforts, but is at the tipping point of jeopardizing the ability to care for many other patient populations seeking care.

Other Financial Information:

Last month, a national report recognized the UVM Health Network as one of the most transparent health systems in the country based on its efforts to make pricing available publicly.

Vermont remains the lowest cost state in the country for Medicare per capita expenditures, led by the health service areas where Network hospital affiliates Central Vermont Medical Center, Porter Medical Center and UVM Medical Center are located. The UVM Medical Center has also recently been ranked first among academic medical centers in the country for value.

The UVM Health Network works with patients to determine if they are eligible for discounted and free care through our Financial Assistance Program. Patients may also qualify for our Health Assistance Program, which covers the cost of medications, dental care, glasses and other medical equipment for low- and middle-income patients. For more information, click here.

About The University of Vermont Health Network

The University of Vermont Health Network is an integrated academic health system serving the residents of Vermont and northern New York with a shared mission: working together, we improve people’s lives. The partners are:

Our 15,000 employees 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 affiliates remains committed to its local community by providing compassionate, personal care shaped by the latest medical advances and delivered by highly skilled experts.