Three University of Vermont Health Network hospitals are asking for more money in 2024 because of rising inflation costs, which could impact the cost of healthcare.
In a budget breakdown session, UVM Health Network CFO Rick Vincent said the hospitals have been improving financially since the pandemic, but still face “significant” challenges.
“We are nowhere where we need to be to be a financially stable organization,” Vincent said.
The University of Vermont Medical Center, Porter Medical Center, and Central Vermont Medical Center have experienced rising care costs since before the pandemic. Vincent said around 2018, the Network started to see rate and budget requests not keep up with inflation.
“Finances are starting to improve but we’re still seeing a significant amount of headwinds, we project we’ll be pretty close to breaking even, maybe a little bit ahead of breaking even,” said Vincent.
When the Network goes in front of the Green Mountain Care Board Wednesday, it will discuss its $105 million fiscal year 2024 budget. Each of the three individual hospitals are requesting higher commercial rates that come out of factors such as Medicare, Medicaid, and total costs.
Health Network officials said Porter Medical Center will need a 6.86% commercial rate increase; Central Vermont Medical Center needs a 10.95% commercial rate increase; and the UVM Medical Center needs a 13.45% commercial rate increase to account for inflation costs. The Network said these rates are not being charged to the patient, but are costs requested of insurance companies that will be negotiated at a later date. These costs could increase what patients pay out of pocket, depending on the insurance company’s policy.
Overall, the revenue UVMMC needs to cover costs adjusted to inflation, and invest in patient care, have increased nearly 24%, covering factors such as patient volume, higher demand care, and rising costs; CVMC has submitted a 21% net patient revenue increase.
UVM Medical Center’s costs are reportedly higher than the other hospitals.
“Chittenden County is growing, more patients are seeking care, working hard to improve access, we expect that volume will increase by 8.1%,” said Stephen Leffler, President of UVMMC. “We’re seeing more complex patients, they often need more staff, which costs are going up for staff, the equipment we use is oftentimes more expensive,” he said.
Leffler said workforce shortages, high labor costs, plus equipment and pharmacy costs also have an impact on operations.
President of CVMC Anna Noonan explained one initiative to help volume.
“We’re bringing some of those volumes down at CVMC to help with some of the volume issues we’re seeing at UVM, but to also help make care more accessible to individuals who need it,” said Noonan.
Leffler said UVMMC’s priorities are expanding gender affirming care, creating a specialized pediatric emergency department, and securing National Cancer Institute designation for its Cancer Center.
The Green Mountain Care Board Budget meeting is on Wednesday, but the Health Network will still have to negotiate numbers with insurance companies before any rates can be set in stone.