- $12M for substance abuse, mental health, housing and dental programs
- $3M to support reform of delivery and payment systems
BURLINGTON, VT – The two Vermont hospitals in the University of Vermont Health Network are seeking approval from the Green Mountain Care Board (GMCB) to direct approximately $15 million in revenue that resulted from providing more patient care than anticipated in the state-approved budget for FY 2015 to support community partners serving the most vulnerable and complex patients, and to bolster state efforts to change the way health care is paid for and delivered. The Health Network will address the remainder of the budget adjustment – $14M – as part of its FY 2017 budget submissions to the GMCB, looking to continue its trend of reducing rate requests to commercial insurers.
“More patients came to us for help than we expected resulting in higher revenue than the state approved for that year, and we think it makes sense to reinvest those funds to strengthen community-based services and support reforms that will improve our health care system,” said John Brumsted, M.D., president and chief executive officer, UVM Health Network and chief executive officer, University of Vermont Medical Center. “If our community partners are successful in helping the most vulnerable patients, it can reduce the need for care provided at hospitals. This approach is consistent with our vision – working together, we improve people’s lives – and will improve community health and help to keep cost increases as low as possible,” he added.
“This plan also reflects our commitment to move away from fee-for-service medicine towards a population-based payment system that rewards collaboration among all providers,” said Brumsted.
The University of Vermont Medical Center and the University of Vermont Health Network – Central Vermont Medical Center (CVMC) are proposing to allocate the funds in three categories: community health needs, health care delivery system and payment reforms, and reduction in commercial rates.
1. Addressing identified community needs in the regions served by both institutions.
The UVM Health Network will invest $12M to address urgent needs identified through our Community Health Needs Assessments:
- $3M to the Champlain Housing Trust to support the development of additional housing for vulnerable individuals.
- $3M for mental health investments, including through partnerships with Washington County Mental Health ($1M) and Howard Center ($1.5M), and grants to the UVM Medical Center’s Community Health Investment Committee ($500,000).
- $6M in substance abuse investments in response to the ongoing opiate addiction crisis, including expanding “hub-and-spoke” services through the UVM Medical Center’s Day One program, and developing a complex pain management program that would be unique to the state. Expanded access to dental care would also be funded from this allotment.
“Howard Center and the UVM Medical Center have a long and rich history of working together to meet the needs of our community," said Bob Bick, CEO of Howard Center. "Together we recognize the importance of providing treatment that acknowledges the interconnection between physical and mental health conditions, especially when addressing some of our community’s most pressing health concerns, like substance use and mental illness. We are grateful for the UVM Medical Center’s support and welcome the opportunity to further our collaborative efforts as we seek to improve the lives of the people we both serve.”
"Like other designated agencies in Vermont, we are facing incredible challenges as we strive to meet the growing needs in our community," said Mary Moulton, executive director of Washington County Mental Health. "The proposed investment in these efforts by the UVM Health Network is an exciting opportunity for us to work together in innovative ways."
“The UVM Medical Center recognizes that housing is vital to community health and wellness,” said Brenda Torpy, CEO of the Champlain Housing Trust. “With today’s announcement, it has stepped up in a big way by providing the Champlain Housing Trust with a critical piece of the financing we need to create housing or community facilities for people who are homeless or the most vulnerable.”
2. Investing in health care delivery system and payment reforms
Under the proposed All-Payer Model, Vermont will use a unified Accountable Care Organization (ACO) structure to carry out delivery and payment system transformations. Vermont’s unified ACO plan includes:
- A strong focus on increasing independent physician practice revenue
- Continuing to build the information infrastructure required to support coordinated care delivery and quality improvement across Vermont.
- Integrating the efforts of community-based providers who address mental health, substance abuse, and social barriers to health outcomes.
- Managing the transition to financial accountability in a more affordable health care system.
Given the challenge of making concurrent progress in achieving these objectives, UVM Health Network is pledging $3M in financial “start-up” support for this initiative.
3. Reduction in Commercial Rates
Use of the remainder of the increase in revenue from patient care, including potential reductions in rates paid by commercial insurers, will be included in the hospitals’ FY 2017 budget submissions to the Green Mountain Care Board later this year, when the implications of any Medicaid payment changes are better understood.
In FY 2014, both UVM Medical Center and CVMC were less than one-quarter of 1% ($2.7M) lower than the approved patient revenue target. FY 2015’s performance was different for a number of reasons, including:
- Bad debt and free care was considerably lower than budgeted. This is thought to be connected to the increased number of people who obtained insurance through Vermont Health Connect or through Medicaid expansion.
- We provided care to a greater number of patients than expected, due to increased insurance coverage through Vermont Health Connect and the Medicaid expansion and the relatively ineffective flu vaccine.
- While the new “Express Care” service offered by CVMC helped reduce Emergency Department utilization, it also attracted more patients than anticipated, perhaps reflecting primary care access issues in general.
The result was the UVM Medical Center exceeded the GMCB’s 0.5% allowed variance guideline by 2% ($22M), and CVMC exceeded the guideline by 4.2% ($6.9M) for a total of $29M. Overall, Vermont’s hospitals fell short of, or exceeded, approved budget amounts within a range of -10.8% to +7.7%.
While patient revenue was higher than the approved levels, the combined net margin for the two hospitals − excess revenues over expenses, when taking into account all sources of income and expense − was $18 million less than budgeted.
About the University of Vermont Health Network
The University of Vermont Health Network is a four hospital system serving the residents of Vermont and northern New York:
- The University of Vermont Medical Center (formerly Fletcher Allen health Care)
- The University of Vermont Health Network – Central Vermont Medical Center
- The University of Vermont Health Network – Champlain Valley Physicians Hospital
- The University of Vermont Health Network – Elizabethtown Community hospital
With over 4,000 health care providers throughout our region, we work together to offer high-quality care more cost-efficiently and as close to home as possible. Strengthened by our academic connection to the University of Vermont, each of our hospitals remains committed to its local community by providing compassionate, personal care shaped by the latest medical advances and delivered by highly skilled experts.