On the morning of Friday, Aug. 28, the Green Mountain Care Board [GMCB] will listen to the leadership of Northwestern Medical Center defend its request for a 19.9 percent rate increase. How the board responds could be an inflection point for NMC and its future as Franklin County’s community hospital.

Acknowledging that perception is the biggest part of reality, it’s crucial the GMCB recognize that while a 19.9 percent rate increase is a big headline, it’s not the story. The story is that NMC’s request is its effort to recoup part of what the GMCB has cost NMC by denying the hospital’s past rate hike requests, and, in 2016, ordering the hospital to actually cut its rates, which has had a compounding effect in the following years. The story is that NMC has always been one of Vermont’s lowest cost providers, and instead of being rewarded, it’s been punished. High cost hospitals have been allowed to keep their high prices, low priced hospitals have been kept low, and pushed toward the financial brink. And NMC is on the brink.

The proposed NMC budget makes this point with thundering clarity by looking at what other hospitals in Vermont charge for services and comparing themselves in a way easy for the GMCB to understand. This dollars and cents exercise shows that if the GMCB granted NMC its proposed increase NMC would still have a cost structure less than nine of the state’s 14 hospitals. Presently, only one hospital out of 14 has lower costs.

NMC would have to increase its rates 42 percent to reach the state average and 48 percent to reach the mean. And that’s if the GMCB denies every other hospital’s proposed budget increase.

No matter the metric, NMC is one of the state’s lowest priced hospitals. By a league. We’re an outlier. And we have been for the last quarter century, or longer.

It no longer works for NMC, or, by extension, for a community that depends on its hospital being a full service, financially healthy institution. As the hospital’s proposed budget states, NMC will no longer be the hospital it is, if the current financial trajectory continues.

NMC has done its part. Again and again. Current management has slashed over $3 million in expenses, including roughly 80 employees. That’s $3 million also accounting for medical inflation and wage pressures.

The GMCB will naturally examine NMC’s request as it relates to increased costs systemically. The board doesn’t want to grant a 19.9 percent rate increase and have it reflected in higher insurance premium costs.

It wouldn’t. Insurance premiums are calculated through the hospitals’ net patient revenue increases. NMC’s net patient revenue increase is below the board’s recommended level. In fact NMC’s net patient revenue figure for 2021 is less than it was for 2020. Thus, the proposed increase should have no sizable impact on insurance premiums.

In the background of all this — particularly at the GMCB level — is the ever present question about NMC: Should it be the size it is, offering all the services it does, when the state’s largest hospital, University of Vermont Medical Center, is a 30-minute drive away? This is the question that, in part, prompted the GMCB to ask hospitals to respond to a 33-page questionnaire about services, costs, future plans, etc.

From NMC’s perspective, and the community’s, the answer is yes.

Why? Because we are the lost cost provider, and UVMMC is the high cost provider. It would not save money to send our patients to them, it would cost us more. A lot more. An estimated $44 million each year. UVMMC also doesn’t have the room. They’re full up.

It’s also important to remember, as part of the storyline, that 44 percent of NMC’s patient count comes from north of St. Albans. Requiring these patients to drive from Richford or Enosburg is obviously a hardship as well as a poor, and expensive way to practice medicine.

Although it’s NMC’s leadership that will make the Friday, Aug. 28th presentation to the GMCB, it’s a presentation that should include the community’s unquestioned support. It would be an abdication of our responsibility if the GMCB were to receive the hospital’s testimony not knowing how dire the circumstances are and how crucial its decision is. That’s a message we need to deliver as a community. We may not have another chance.

by Emerson Lynn

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