Vermont Business Magazine Initial submissions from Vermont’s 14 hospitals maintain historically low growth for the secondyear in a row. Hospital budget submissions received last week by the Green Mountain Care Board (GMCB) markthe start of a budget review process that includes public hearings August 26-28 and culminates in GMCBdecisions on budgets by September 15. The budgets will guide spending in fiscal year 2015, which begins October 1.Preliminary data submitted by Vermont’s 14 hospitals indicate that the average requested total increase in netpatient revenue for FY 15 is 2.6 percent. Net patient revenue includes payments hospitals receive from patients,government, and insurers to pay for patient care — but not revenues from other activities such as cafeterias,parking, and philanthropy. Last year, Vermont’s hospitals initially requested increases averaging 3.0 percent.After its extensive review, the GMCB approved growth of 2.7 percent — the lowest increase for Vermont’shospitals in at least 15 years.The proposed 2.6 percent rate of increase represents the lowest growth rate in hospital budgets in 40 years.
This is the second straight year the GMCB has instructed Vermont’s hospitals to keep increases in net patientrevenue to 3 percent or lower, with the possibility that the GMCB would allow as much as an additional 0.8percent for investments in health reform initiatives designed to improve quality and control costs over the longterm. The 2.6 percent figure for 2015 includes investments in reform.
“These low revenue requests are a great step toward the reform envisioned in Act 48,” says Al Gobeille, Chair ofthe GMCB. “I appreciate the incredibly difficult work our hospitals have done to make health care moreaffordable for Vermonters. I credit the hospital leaders, health professionals, staff, and volunteer communityboards for doing the heavy lifting here.”
Gobeille noted that the budget numbers are preliminary and that GMCB staff will be hard at work between nowand September 15 verifying the data’s accuracy and consistency with standards.
In a statement, Governor Shumlin said: "This is great news for Vermont and is evidence that the work we are doing to rein in health care costs is showing results. Much credit goes to our hospitals, providers, carriers and especially to the Green Mountain Care Board and Chairman Al Gobeille.
"We all know we cannot afford to continue down the path we've been traveling for the last two decades. Vermont businesses, individuals and families simply cannot afford the ever ballooning cost of health care. Every year rising health care costs eat away at raises for individuals and investment for businesses. That is why containing costs is the linchpin of our overall reform efforts. And that's why today's news is so promising."
The GMCB hospital budget review process began in April with instructions from the GMCB to hospitals forbudget submissions that were due July 1. Milestones in the process include:
• July 31: GMCB staff will present an initial analysis of the submitted budgets in the GMCB’s weekly open
meeting, held from 1 to 4 p.m. each Thursday on the second floor of City Center, 89 Main St.,
Montpelier.
• August 26-28: Each hospital’s leadership will appear before the GMCB to discuss its budget requests. A
detailed schedule for the hearings, which will be held at Montpelier’s Capitol Plaza Hotel, is available on
the GMCB website: http://www.gmcboard.vermont.gov/hospital_budgets/2014schedule
• September 11: The GMCB is scheduled to vote on budgets in its regular weekly meeting.
• September 15: GMCB staff will inform hospitals of their approved budgets.
• October 1: Formal budget orders will be sent to hospitals.
PHOTO: Mom and baby courtesy of Gifford Medical Center in Randolph.
Source: GMCB 7.10.2014. See the hospital budget review section of the GMCBat www.gmcboard.vermont.gov/hospitalbudgets. Hospital budget submissions will be posted tothe site by next week.