UVM Health Network announced sweeping measures to address revenue loss during the COVID-19 pandemic. Currently, projections show $152 million in losses for the fiscal year.
Base salaries for leaders have been immediately reduced, and employer retirement benefit contributions for leaders have been eliminated. UVM Health Network has also instituted a freeze on hiring and capital spending.
The measures are intended to support others announced in March that eliminated performance based compensation for leaders and physicians during the current fiscal year.
Combined, the expense reductions are estimated to save $25 million this fiscal year. UVM Health Network has also received $37.9 million in federal relief funds.
UVM Health Network President and CEO Dr. John Brumsted said future financial assistance will be vital.
“Any relief we get from those sources lessens the necessity that we go to other expense reduction,” Dr. Brumsted said. “Really, what is critical is that procedures like doctor visits and outpatient, imaging, those are the things that bring revenue in that support the system.”
UVM Health has estimated that their facilities have seen a 50 percent drop in non-COVID-19 patient care. We asked Dr. Brumsted if additional budget cuts could be coming soon.
“We’re day-to-day working on bringing services back online that will restart the revenue, and we’re going to not take any actions that impact our employees unless absolutely necessary,” Dr. Brumsted said.
According to Dr. Brumsted, a freeze on capital spending at UVM Health means that minor repairs and replacements across the six-hospital network could be pushed back 6-12 months.
Some ongoing projects will continue, including the implementation of electronic health care records.
“New building projects like the inpatient psychiatric facility that we’re planning at our Central Vermont campus, we’ve put that on pause,” Dr. Brumsted said. “We’ll come back to it. There are those sorts of things that we can pause from a capital investment perspective.”
As careful financial planning for continues, Dr. Brumsted emphasized that necessities are still accounted for.
“A piece of equipment that breaks that is critical for our patients, we’re going to go out and spend money for that,” Dr. Brumsted said.