Sunny Eappen, president and CEO of the University of Vermont Health Network, speaks during a groundbreaking ceremony to announce a second investment in new housing in South Burlington on Dec. 15, 2022. File photo by Glenn Russell/VTDigger

Updated at 6:32 p.m.

The University of Vermont Health Network announced Tuesday it will cut 77 positions, including 68 staff roles and nine leadership roles, as part of its plan to reduce expenses for the coming fiscal year.

While some staff will remain in their roles until the end of the fiscal year in late September, other staff positions will end as soon as Tuesday this week, said Annie Mackin, the network’s spokesperson.

The health network — which comprises three hospitals in Vermont and three in northern New York — will also not fill 69 current vacancies following Tuesday’s announcement. The network chose not to fill 120 vacant positions last year, and several hundred more positions were phased out earlier this year.

The announced staffing cuts, which amount to over $5 million in spending reductions, come a week ahead of hospital budget review hearings overseen by the Green Mountain Care Board. The state regulating body is tasked with approving the amount of patient-related income in budgets for the next fiscal year at all 14 of the state’s non-federal hospitals.

The cuts are largely to positions not involved in direct patient care, specifically in the networkwide finance, human resources and information technology teams, said Mary Broadworth, vice president of human resources for the health network. The Vermont hospitals in the health network are Central Vermont Medical Center in Berlin, Porter Medical Center in Middlebury and University of Vermont Medical Center in the Burlington area.

Along with layoffs, the health network aims to reduce spending through deferring capital projects, increasing efficiencies in clinical care and administrative work, reducing the number of traveling and temporary workers in favor of permanent staff, eliminating tentative, performance-based bonuses for administrative leaders, and consolidating real estate.

The plans set forth Tuesday represent approximately $185 million in expense reductions, according to the network. The cost-saving measures will help the University of Vermont Medical Center meet its proposed $2.3 billion budget for the next fiscal year.

University of Vermont Health Network is requesting the Green Mountain Care Board approve a nearly 8% decrease in rates charged to commercial insurers by the Burlington hospital, the largest by far in the network, according to their budget review filings.

In recent years, the network has surpassed the Green Mountain Care Board regulated budget caps for patient revenue by millions of dollars. The regulatory board approved a settlement with the network this spring to address some of the overrages.

Staffing is the organization’s largest expense, with the non-physician workforce compensation accounting for 36 cents of every dollar spent by the network. In their effort to reduce costs, staffing cuts were “unavoidable,” Broadworth said.

The health network aims to support the staff impacted by the cuts, including identifying other opportunities within the organization, and minimize the “impact on patient care as a result of this decision,” Broadworth said.

Sunny Eappen, president and CEO of the University of Vermont Health Network, said the administrative layoffs and other cost-saving measures reflect the broader affordability challenges facing the health care industry in rural areas.

“Our goal has been to be very transparent and stay focused on putting patients and communities and their health first, and keep making choices that make us be effective and efficient to support them in the long term,” Eappen said.

Sunil “Sunny” Eappen, president and CEO of the University of Vermont Health Network, in South Burlington on Thursday, December 15, 2022. Photo by Glenn Russell/VTDigger

Updated at 5:37 p.m.

The University of Vermont Health Network announced plans Thursday for a sprawling series of health service cuts at its facilities, reductions that could impact how and where patients across Vermont could receive medical care.

The network plans to eliminate the transplant department at UVM Medical Center, shutter the inpatient psychiatric unit at Central Vermont Medical Center, offload dialysis programs in Newport, Rutland and St. Albans, and close two clinics in the Mad River Valley.

UVM Medical Center, in Burlington, is also slated to reduce its census of inpatients — currently about 450 — by about 50 in the coming months.

Health network leaders blamed the reductions on recent orders from the Green Mountain Care Board, a key state health care regulator. Those orders limit how much revenue the network’s hospitals can raise from medical services, and how much it can charge commercial insurance for those services.

“Today’s a hard day for our organization and for our leaders,” Sunny Eappen, the CEO of the UVM Health Network, said at a press briefing Thursday morning. “We’re having to take action on a number of measures that we don’t want to be doing. But as a result of the decisions by the Green Mountain Care Board, we’re being forced to do that.”

A struggling health care system

Vermont’s aging population — as well as labor shortages, high pharmaceutical costs, a lack of long term care facilities and other factors — has pushed prices for health care up around the state.

In an attempt to keep those costs in check, the Green Mountain Care Board has recently taken a harder line with Vermont hospitals, placing firmer limits on patient revenue and commercial insurance charges.

But the board’s recent orders have caused friction between the regulator and UVM Health Network administrators, who say they plan to appeal them. In the meantime, however, the network will move forward with cuts, executives say.

“We unfortunately need to take these actions because this is for this fiscal year,” Eappen said Thursday, “and so we need to keep moving forward while that legal process continues down the road.”

The Green Mountain Care Board said in a statement Thursday that members learned about the network’s plans just one day before and are seeking to better understand the rationale behind them.

Board members are “deeply concerned about the impact of UVMMC’s decisions on patients, its dedicated staff, and the broader healthcare system,” the board said.

Changes across the state

If implemented as planned, the changes at the UVM Health Network — which includes UVM Medical Center in Burlington, Central Vermont Medical Center in Berlin and Middlebury’s Porter Medical Center, as well as three hospitals in New York — could affect care throughout Vermont.

In Burlington, UVM Medical Center is seeking to decrease, by roughly 50, the number of patients who stay overnight, by limiting transfers to the hospital and removing barriers to getting patients into lower-level facilities like nursing homes. It was not immediately clear how that would be achieved.

The Burlington hospital currently performs roughly a dozen kidney transplants a year. Halting those would likely send patients to New Hampshire’s Dartmouth Hitchcock Medical Center, UVM Health Network administrators said.

The health network is also hoping to transfer dialysis centers in St. Albans, Newport and Rutland to other non-network operators. Those centers serve about 115 patients and lose about a combined $3 million annually, the network said.

UVM Health Network also plans to shutter a family medicine clinic and a rehabilitation clinic, both affiliated with Central Vermont Medical Center, in Waitsfield.

“Those providers and staff will be moved to existing primary care locations,” said Anna Tempesta Noonan, Central Vermont Medical Center’s president and chief operating officer. “The closest being the Waterbury clinic that we have, which is approximately 12 miles from where our current practice is in the Valley.”

Central Vermont Medical Center’s inpatient psychiatric unit, which currently has eight patients, would also shut down. Noonan said that the hospital was working to provide lower-level psychiatric care elsewhere in the hospital, through “enhanced services” in the emergency department and “psychiatric supports” in primary care facilities.

Administrators said they have also implemented or planned cuts to non-clinical expenses totaling $38 million, which include delaying maintenance and upgrades and halting programs to improve patients’ access to care, according to a Thursday press release.

Network administrators said that the cuts would affect about 200 employees in total. The hospitals plan to not renew contracts for roughly 100 traveling staffers and find other positions within the network for approximately another 100 permanent staff.

The changes announced Thursday come just a month after UVM Health Network announced that it would delay construction of an outpatient surgical center — another action it blamed on orders from the Green Mountain Care Board.

UVM administrators did not provide a hard timeline for the cuts, saying they will likely take months to implement.

Concerns from stakeholders

In an interview Thursday, Owen Foster, the chair of the Green Mountain Care Board, pushed back against UVM Health Network executives’ argument that the regulator was to blame for the cuts.

“I think that the board’s responsibility is to contain costs and ensure access and quality is sufficient,” Foster said. “And our findings explain that UVM did not hit those marks. They have extremely high prices, their quality was declining, and their access was poor. So I think in that circumstance, with those budgets, we made the right decisions.”

Foster said that the hospital could have taken multiple other steps to cut costs other than reducing health care services, such as improving efficiency, repaying loans from the network’s New York hospitals and correctly budgeting federal grant money.

“I think that there’s many other hospitals, other academic medical centers across the country, other Vermont hospitals, that (did) a far better job of controlling expenses over the last five years,” Foster said.

Thursday’s announcement also drew a rebuke from the Vermont Federation of Nurses and Health Professionals, which represents nearly 3,000 nurses and other staff at the University of Vermont Medical Center. Deb Snell, the president of the federation, called news of the cuts “very disappointing” in an interview Thursday.

“The UVM Health Network seems to be taking no responsibility for their poor management of their finances the last few years,” Snell said. “And now these decisions are coming on the back of Vermonters.”

Mike Fisher, Vermont’s chief health care advocate, also expressed concern about the network’s announcement.

“I’m frustrated at UVM for blaming the economic situation we’re in on the Green Mountain Care Board,” Fisher said. “We desperately need UVM and other hospitals to come to the table in good faith to figure out how we can best serve Vermonters, given the financial crisis we’re in.”

University of Vermont Medical Center. Courtesy photo.

Steep Administrative Cost Cuts and Clinical Service Reductions Will Erode Progress on Patient Access and Service Gains for Vermonters, Layoffs Might Be Necessary

Vermont Business Magazine University of Vermont Health Network is moving forward with reductions to administrative and clinical services to comply with Vermont state budget orders and enforcement actions issued by the Green Mountain Care Board (GMCB), the health care regulator in Vermont.

These actions will have both an immediate and long-term impact on patients served in the region and, based on current information, will ultimately result in a workforce reduction estimated to be as many as 200 people who currently serve the health care system, including both employed staff and temporary/travel staff. Changes will take place both immediately and over the next several months.

Patients will be informed when the timelines and care transitions for impacted services are clear.

Among other adjustments, the plan states that: The University of Vermont Medical Center will be reducing the number of patients staying overnight, which will result in approximately 50 fewer overnight patients each day – a nearly 12% reduction; the hospital will end its management of dialysis clinics in St. Albans, Rutland and Newport; the hospital will end its management of dialysis clinics in St. Albans, Rutland and Newport. This change will impact approximately 115 patients; and Central Vermont Medical Center will merge its Family Medicine main campus and Mad River sites, as well as its Mad River and Barre Rehab clinics, with providers and staff moving to already existing locations in relatively close proximity, in order to open space on the hospital’s main campus for needed specialty care.

“Health care is not affordable for many who need it – it’s expensive for patients and providers. That’s why we’re always taking thoughtful steps to control the costs we can for the people we serve,” said Sunny Eappen, MD, MBA, president and CEO of University of Vermont Health Network. “We believe the orders that made these cuts necessary will have the opposite impact. Ultimately, they will make care less affordable and less accessible for those in need.”

These actions respond to decisions by the GMCB to cut the budgets of two of the health system’s Vermont hospitals – Central Vermont Medical Center and University of Vermont Medical Center. This along with an enforcement action penalizing University of Vermont Medical Center – the state’s only academic medical center – for responding to the health needs of its community and providing more health care than approved by the regulator last year.

The cumulative impact of the budget orders requires $122 million of revenue to be eliminated at a time where the demand for care has been steadily increasing. In health care, revenue is patient care, Eappen said. University of Vermont Medical Center has provided care to more than 25,000 new patients over the last five years, with over 8,000 new patients in the last year alone.

UVMHN CEO Sunny Eappen. VermontBiz file photo.

“These decisions we are being forced to make are painful because there are patients connected to each one of them. I apologize to our patients and to our employee colleagues who will be impacted,” Dr. Eappen said. “As a nonprofit academic health system rooted in the rural communities we serve, we know these cuts will affect our friends, our families and our neighbors who need the lifesaving care we provide.”

The GMCB issued its own statement shortly after the UVMHN announcement and said that the regulator was only told of the UVMHN actions yesterday and was neither consulted about nor approved of them. GMCB said they would continue to support the state’s 14 community hospitals and work with UVMHN on finding a financial way forward.

“We have no doubt that UVMMC gave careful and thoughtful consideration to these difficult decisions. The GMCB recognizes and appreciates UVMMC’s efforts to focus any staffing reductions largely on travelers (traveling nurses) and vacant positions,” the GMCB statement said. “Nonetheless, important, hard-working Vermonters will be impacted by UVMMC’s decisions. The GMCB is committed to reviewing UVMMC’s decision with the hospital and discussing whether there are alternatives available.”

The unions representing UVMHN workers also were also disappointed with the hospital group’s decision.

Deb Snell, the president of Nurse and Tech Union at UVMMC, said, “We have never been given a good answer as to how the Health Network has improved the quality of care at the member hospitals in Vermont and we have concerns that the Network is a net drain on providing the quality patient care that Vermonters deserve.”

The revenue and expense reduction plan addresses the Vermont state regulator’s budget orders for this year, which went into effect October 1. University of Vermont Health Network has taken legal action in an attempt to seek relief from the GMCB penalty for providing higher than approved amounts of health care last year. Even as efforts to appeal the enforcement unfold through the legal process, University of Vermont Health Network leaders must take measures to comply with the legal orders issued by the GMCB earlier this year.

“These are not decisions we wanted to make because we know they impact patient care at a time where people need greater access to services,” Dr. Eappen said. “We are taking every step we can to prevent deeper cuts, and we will be transparent throughout this process. The truth, however, is rebuilding from the impact of these actions will take an extraordinarily long time, even if we succeed in the courts.”

Decisions were shared with University of Vermont Health Network’s Board of Trustees, who are volunteers from communities across the health system service area as well as some who are national leaders in health care. Their role is to hold leaders accountable for fulfilling the system’s mission to serve its communities. Allie Stickney, who serves as the board chair, said trustees take the forced cuts very seriously because they deeply understand the potential for negative impact to patients.

“We are all patients of University of Vermont Health Network, and our families, friends and neighbors depend on the Network for care, too,” Stickney said. “We are small business owners facing increasing costs of health insurance for our employees and ourselves; physicians who know firsthand the importance of access to care; community members who work with low-income Vermonters in our professional lives. We understand the importance of holding the line on cost, while still providing the highest level of service we can. That doesn’t make these choices any easier.”

Patient Care Service Reductions Reflect Tough But Necessary Decisions

Over the last two months, University of Vermont Health Network leaders have taken on extensive work to identify administrative and clinical reductions, both in patient care services and in staffing.

A consistent approach was created, with each decision weighed against three guiding principles:

Provide access to lower cost, high-quality care

Promote health equity

Support our nonprofit academic mission

Services identified for reduction or elimination were identified based on factors including low patient volume, high cost and whether the services operate at a loss.

Resulting from that process, the following services will experience changes over the next year:

Surgical Renal Transplant Services at University of Vermont Medical Center: To Close and Care Will Transition to Dartmouth Health

We have begun discussions with Dartmouth Health’s Dartmouth Hitchcock Medical Center in Lebanon, New Hampshire, about a collaboration for the care of patients needing kidney transplant surgery. Being explored is a collaboration where University of Vermont Medical Center would continue to provide medical care for its patients on waiting lists to receive a kidney transplant, with the actual transplant procedure taking place at Dartmouth.

“Dartmouth Health is proud to collaborate to ensure patients in Vermont have local access to kidney transplant services at Dartmouth Hitchcock Medical Center,” said Edward J. Merrens, MD, Dartmouth Health’s chief clinical officer. “Our goal is a seamless transition. We will provide additional information as our collaboration advances.”

Kidney Dialysis: End University of Vermont Health Network Staffing/Operations of Treatment Locations Outside Primary Service Area

University of Vermont Medical Center has been operating kidney dialysis treatment centers to serve patients across Vermont, even in communities beyond its primary service area. The hospital will end its management of dialysis clinics in St. Albans, Rutland and Newport. This change will impact approximately 115 patients. With the goal of maintaining these vital health care services for the patients in need, the health system is seeking alternative providers to operate the current sites, whether through existing organizations or through an RFP process to third-party organizations. Access to dialysis in these communities is critical, as patients will otherwise have to travel longer distances for care.

“We will do everything we can to support our patients and our employees affected by these difficult decisions,” said Stephen Leffler, MD, president and COO of University of Vermont Medical Center. “We are working to ensure patients receive the care they need, but we will no longer be able to provide certain types of care in order to comply with our budget orders. These actions are in direct conflict with our nonprofit mission to be here for the patients who need us, and we are very sorry for the negative impact this will have on Vermonters.”

Central Vermont Medical Center Family Medicine and Rehabilitation: Clinic Consolidations

Central Vermont Medical Center will merge its Family Medicine main campus and Mad River sites, as well as its Mad River and Barre Rehab clinics, with providers and staff moving to already existing locations in relatively close proximity. This will open space on the hospital’s main campus for needed specialty care. The Mad River locations have been operating with fewer patients than are effective for running practices of similar size. Consolidating clinic locations will increase efficiency and reduce costs of providing care.

“I know these changes will impact patients, staff and the communities we serve, said Anna Tempesta Noonan, BSN, MS, president and COO of Central Vermont Medical Center, “I deeply understand this impact and stay committed to the critical role we play in caring for the people of central Vermont.”

Inpatient Psychiatric Unit at Central Vermont Medical Center: Close Unit, Shift Care Model

Despite the continued need for additional mental health capacity in Vermont, the inpatient psychiatric unit at Central Vermont Medical Center will close. The census of the unit has been capped at eight patients. CVMC will continue to explore options for a patient-focused, holistic approach to mental health services. Earlier this year, CVMC implemented a Primary Care Mental Health Integration model, which places mental health clinicians in all primary care clinics. The hospital will also support mental health needs through innovative staffing in the Emergency Department and through community partnerships like the recently opened Mental Health Urgent Care in Burlington through a partnership between University of Vermont Medical Center and community partners.

“I have been in health care for over 40 years, 30 of which I have served in senior leadership roles. These are some of the most difficult decisions I have ever been a part of. We need to balance all of this, while working to ensure our organization is financially sustainable for the long term,” Noonan said. “Our patients, Woodridge Rehabilitation and Nursing residents, and staff remain my priority as we provide high quality care for the patients we will continue to serve.”

Overnight Stays at University of Vermont Medical Center: Reduce Number of Patients and Limit Patient Transfers

To comply with the orders to reduce the revenue generated by providing patient care, University of Vermont Medical Center will be reducing the number of patients staying overnight. This will result in approximately 50 fewer overnight patients each day – a nearly 12% reduction. The hospital will achieve this reduction by addressing challenges that prevent patients from being discharged when it is safe for them to leave the hospital or be moved to a more appropriate level of care, like a rehabilitation facility or nursing home. The hospital will also limit non-emergency patient transfers from regional hospitals. The result of limiting transfers will lead to more patients across the region being denied access to care at the region’s only Level 1 trauma and acute care center.

“Smaller community and critical access hospitals in Vermont, like Porter, rely on being able to transfer our most serious patients to University of Vermont Medical Center,” said Bob Ortmyer, president of Porter Medical Center. “Limiting patient transfers to the state’s only high acuity care center is serious and will have a negative impact on our patients.”

Steep Administrative Cost Cuts Slow Gains in Patient Access and Care Upgrades

The health system is continuously refining its budgets and is accelerating efforts to work more effectively and control costs. A prime example is the personnel review process that takes place at a health system level to scrutinize hiring. The organization is also implementing long-planned initiatives, prior to the GMCB’s orders, to leverage new supply chain services to reduce spending.

Despite ongoing efforts to control costs, University of Vermont Health Network is cutting over $18 million in administrative costs this year due to the latest budget orders. These deep cuts are being achieved by scaling back initiatives to reduce wait times, delaying facility maintenance and technology upgrades that support patient care and reducing budgets across the board. The progress the health system has made in recent years to increase patient access will be eroded by these cuts.

These cost reductions come after the health system cut non-clinical expenses last year by $20 million and eliminated approximately 130 open positions due to cuts in the previous budget by the GMCB. These earlier cuts also delayed initiatives to expand patient access to care and facility upgrades to support those efforts and help train the next generation of doctors, nurses and caregivers in our region.

Actions Reflect the Latest Effort to Comply with State Orders

After the budget orders were announced, University of Vermont Medical Center took the difficult action of delaying construction of its Outpatient Surgery Center in South Burlington, which was already challenged due to the restrictive Certificate of Need approval earlier this year by the GMCB. Without the new center, it is estimated the health system’s already stretched current surgical capacity will fall well short of demand by the end of the decade, leaving over 4,000 patients a year experiencing a backlog for surgeries, a conclusion verified by GMCB independent consultants.

Thursday’s announcement by the health system reflects steps taken to comply with the GMCB budget orders for the current year. In its legal appeal, University of Vermont Medical Center noted the GMCB did not follow Vermont law in holding a dedicated hearing on the enforcement outside of the annual budget process, allowing the hospital to present its case in how the revenue overage was a direct result of providing more care to patients. Despite the revenue overage, the hospital lost $23 million from delivering the additional care.

“Rural health care providers are the lifeblood of tight knit communities across the country, providing critical services that would otherwise be hours away, as well as supporting economic development and growth,” said Bruce Siegel, president and CEO of America’s Essential Hospitals, a leading advocate for US hospitals that serve communities most in need. “Budget cuts to essential hospitals affect disadvantaged populations hardest and are a step backward in health equity. I commend University of Vermont Health Network for taking a thoughtful approach to these tough choices and urge the State of Vermont to reconsider the path it is sending its safety net health system down.”

Next Steps Dependent on Multiple Factors

To minimize disruption to patients, in some instances it will take months to implement the changes to clinical care announced Thursday. The health system will continue to monitor its progress in following the GMCB orders throughout the year. The need for additional service and administrative cuts and adjustments will depend upon this progress and whether the enforcement action on providing additional care last year is ultimately upheld by the courts.

To support patients who experience uncertainty due to these announcements, those directly impacted by these changes will be contacted proactively by their care provider with guidance on next steps, which may include transition to care within University of Vermont Health Network or with other health care providers.

The GMCB’s unprecedented enforcement action is the first of potentially more steps by the regulatory agency to reduce patient care expenses for the health system.

“Given our focus on expanding physical access to care and innovating new ways for patients to seek services, we fear there will be additional enforcement in the future,” Dr. Eappen added.

Investments and Initiatives to Support Community Health Needs Remain a Priority

In spite of the challenging actions announced Thursday, University of Vermont Health Network is accelerating critical work responding to the growing health needs of its patients and elevating patient care, highlights include:

Recently, University of Vermont Medical Center celebrated the opening of the Mental Health Urgent Care clinic, created in partnership with local community partners, which offers a new alternative to care for adults in crisis.

This year the health system will continue to expand its implementation of the eConsults service that provides virtual connections with primary care providers and specialists to decrease patient wait times for specialty care.

The multi-year plan to upgrade and replace linear accelerators at health care partners within University of Vermont Health Network, which provide targeted cancer care, remains on track.

Care Management, a specialized program that works to improve health outcomes by identifying and addressing barriers to care and services, is now active in most primary care clinics across the health system.

“Our commitment to our patients doesn’t stop when we face challenging times,” Dr. Eappen said. “We will be here to provide great care now and into the future, and we’ll do it by being innovative and thoughtful about the work we do. That’s the promise we make to the people who depend on us.”

About University of Vermont Health Network

University of Vermont Health Network is an integrated system serving the residents of Vermont and northern New York with a shared mission: working together, we improve people’s lives. The partners are:

University of Vermont Medical Center

University of Vermont Health Network Medical Group

University of Vermont Health Network – Alice Hyde Medical Center

University of Vermont Health Network – Central Vermont Medical Center

University of Vermont Health Network – Champlain Valley Physicians Hospital

University of Vermont Health Network – Elizabethtown Community Hospital

University of Vermont Health Network – Porter Medical Center

University of Vermont Health Network – Home Health & Hospice

Source: 11.14.2024. Burlington – University of Vermont Health Network