Howard Center announces layoffs and cuts, citing rising health care and programming costs
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Howard Center announces layoffs and cuts, citing rising health care and programming costs
The Howard Center, Vermont’s largest health care provider, announced plans to cut 27 staff roles and will not fill 30 currently vacant roles. The center will also cut certain programming and services starting in September. The cuts follow “three years of multimillion-dollar operating deficits driven by rising health care costs and rising program costs,” the center said.Since 2021, health care prices have increased for the center by 100%. In response to these increases, the Howard Center must reduce costs by almost $2.5 million in fiscal year 2026 — which started July 1 — and reach $3.6 million in savings annually to “stabilize operations” The center also plans to shut down day programming of Westview House, a home for adults with mental illnesses to socialize with one another during the day. It plans to consolidate substance use disorder services in Grand Isle, Franklin and Chittenden counties, however, mobile services in those areas are expected to continue. The Howard Center has a daily operational cost of $400,000.
The Howard Center, a nonprofit in Chittenden County and Vermont’s largest health care provider dedicated to supporting people with substance use disorder, mental health issues and developmental needs, announced plans to cut 27 staff roles and will not fill 30 currently vacant roles. The center will also cut certain programming and services starting in September.
The cuts follow “three years of multimillion-dollar operating deficits driven by rising health care costs and rising program costs,” where “at times, Howard Center has had only single-digit days of operating cash on hand,” according to a July 8 press release from the center.
90% of the Howard Center’s budget goes toward the salaries and benefits of its staff.
The Howard Center has a self-funded health care plan, but this has not spared it from rising health costs across Vermont, according to Howard Center CEO Sandra McGuire.
“What we have experienced in the cost increase is the same thing that is driving the increase across the board, across the state, which is increased utilization, increased hospital costs and increased prescription costs. … Early on, we were shielded from those increases and it was positive for us. But in recent years, as our costs have more than doubled in the past five years, it is really the same trends and themes that I read about all across the state,” McGuire told VTDigger.
Since 2021, health care prices have increased for the center by 100%. In response to these increases, the Howard Center must reduce costs by almost $2.5 million in fiscal year 2026 — which started July 1 — and reach $3.6 million in savings annually to “stabilize operations,” according to the center’s press release.
As a result, the center will slash 27 filled jobs and eliminate 30 vacant positions. To minimize cuts, “impacted employees will be offered existing positions” at the center, according to the release.
“We currently have over 150 vacant positions for programs and services that will be continuing,” McGuire said. “Hopefully we can have a pretty comparable position for folks, but not always. … So staff make that choice themselves, right? Whether or not they wanna stay with us in a different position or not.”
When asked why there were over 150 vacant positions, McGuire pointed to the demographics of an aging state.
“Certainly over the years of the pandemic, like many others we lost staffing and that staffing has never recovered to the same level. … So we have worked hard to adjust programming and positions to be able to adapt to a new status quo,” she said. “… But in the more immediate term, ourselves, like many businesses, have not been able to staff at the levels that we were able to eight to 10 years ago.”
The organization also plans to shut down day programming of Westview House, a home for adults with mental illnesses to socialize with one another during the day. The center also plans to consolidate substance use disorder services in Grand Isle, Franklin and Chittenden counties, however, mobile services in those areas are expected to continue.
“We are actively working on conversations with other community providers with all of these changes to see what gaps could be filled in different ways. We’ve been having those conversations with providers for a while, and we will continue to, particularly as most organizations’ resources are getting a bit slimmer in the near term, hopefully not in the long term,” McGuire said.
Between fiscal year 2022 and 2023, the center’s cash fell from $18.7 million to $8.2 million, followed by an over $2 million drop that left the center with just $6 million in fiscal year 2024.
State grants and contracts between 2023 and 2024 also decreased from $10.1 million to $8.3 million during this time. Federal grants took an even larger hit, dropping from $4.7 million to $1.3 million.
As of June 30, 2024, the Howard Center had over $7 million in investments and a $6 million line of credit with TD Bank. McGuire said she doesn’t want to touch those to fix current financial woes, as they would be short-term solutions to an institution with a daily operational cost of $400,000.
McGuire said the current cuts are unrelated to Medicaid cuts at the federal level, but that the center is monitoring those as they come.
“Our budget is about 90% Medicaid overall. [The cuts] are really in response to our ongoing funding, and what we have for the dollars for this year and what our projected expenses are. We don’t know the impact yet. We are working to understand that as is everyone else what the impact of the federal dollars will be,” McGuire said.