BRATTLEBORO-Brattleboro Memorial Hospital is seeking $4 million in expense reductions and new revenue in the next four months to balance its $119 million annual budget.
"Like rural hospitals here in Vermont and across the nation, BMH faces significant financial challenges that have been imposed on us in large measure by both the state and federal governments," President Christopher Dougherty wrote to the hospital's 150 community corporators in an email over the Memorial Day weekend.
The hospital is exploring 40 "strategies" to save or earn money between now and the end of its fiscal year on Sept. 30, Dougherty said on May 27. The list ranges from drawing more revenue through services such as a new MRI machine to continuing to reduce expenses through a hiring freeze that began April 1.
Laying off some of the hospital's 520 staffers would be a last resort, Dougherty said.
"It is absolutely a possibility, but it is at the end of the line of things that we would pursue," he said of personnel cuts at the hospital, one of Brattleboro's three largest employers.
The hospital received budget approval from the state's Green Mountain Care Board last fall, only to now see diminishing results from the $600,000 a month it pays in Vermont health care provider taxes to help finance Medicaid expenditures for people with limited incomes.
"While part of that money comes back to us to help offset uncompensated care, the state recently reduced the percentage of annual return to less than 10 percent," Dougherty wrote in his email.
The hospital president said reimbursements for professional services from the 65-and-up Medicare insurance program have declined by almost 3% annually. He also noted the state rejected a request for a 4.7% increase in its commercial insurance rate.
In its decision on the Brattleboro request, the board wrote that "the commercial market in Vermont cannot afford the current cost of care," saying that "for commercial rate increases to slow, our statewide health system needs to curb spending."
The board repeated a similar argument in decisions for other hospitals. In particular, Blue Cross Blue Shield of Vermont, which covers roughly one-third of all Vermonters, is facing financial difficulties due to the increasing cost of care.
The board added that Brattleboro's low Medicare payment-to-cost ratio, clinical productivity data, and higher-than-average wait times "indicate system inefficiencies."
"It is appropriate for the hospital to focus on managing expenses and reducing inefficiencies to obtain a positive margin," the board's decision read.
The hospital is now working on a "robust combination of expense reductions and revenue generating tactics," Dougherty wrote before ending his email with a link to "donate now."
Brattleboro is just one of many hospitals in Vermont wrestling with what the Green Mountain Care Board has called "a health care affordability crisis."
"It's estimated that as many as 753 small rural hospitals like us are at risk of closing across the United States," Dougherty said on May 27. "I hate to say we're one of those 753, but we're not going to let that happen."
This story was republished with permission from VTDigger, which offers its reporting at no cost to local news organizations through its Community News Sharing Project. To support this work, please visit vtdigger.org/donate.
This News item by Kevin O'Connor originally appeared in VTDigger and was republished in The Commons with permission.