The Green Mountain Care Board this week denied an emergency request from Northwestern Medical Center for a 15 percent rate increase. The hospital lost in excess of $9 million last year, and it’s on its way to lose far more than that this year. Apparently NMC’s pain is not severe enough, it hasn’t gone through all its savings.
In no way was the board helpful. It could have allowed NMC to raise prices at a level lower than the 15 percent requested. It offered nothing, seemingly paralyzed by the thought of other hospitals making requests of their own. It didn’t even offer the necessary guidance that might help NMC [and other hospitals] as it prepares for its annual review in August. The not-so-subtle message from the board was that NMC has 150 days of cash, other hospitals do not, come back when the stress is more apparent, like when the doors are about to close.
Board members said the request was not adequately justified, which is odd; isn’t losing $9 million adequate justification, and having lost money steadily for the last three years? Most lenders would treat any other business with similar loss levels as problematic, to say the least.
But in Vermont, and with the GMCB, barely surviving seems to be the goal. Whereas we’re moving heaven and earth to keep people employed in other businesses, with our hospitals we’re pushing employees out the door. With the GMCB it’s seen as defensible policy to deplete the reserves of all our hospitals. How is that an intelligent thing to do? What business is strong enough to plan for the future if it has no reserves?
It was also odd, and troubling, to see the board question NMC’s participation in OneCare Vermont, asking how much of NMC’s loss was attributed to being part of OneCare’s payment reform system.
Before Covid-19 struck, the board was a defender of OneCare, and the planned move away from our traditional fee for service approach to a capitated payment model. Population health is the future, which the pandemic has made clearer than ever. Prevention — the goal of the all payer model — is how we work our way forward toward a health care system in which the costs are more effectively controlled. Has the GMCB changed its mind? The concern — expressed broadly — is that OneCare may not be in business much longer if the GMCB doesn’t support the sort of budget increases hospitals need to weather the existing crisis and to support the payment reform model. That would be a travesty.
NMC’s budget is not the only one that has gone sideways. Every hospital in the state is losing money. Every hospital in the state is burning through its cash. And every hospital is going to need much clearer guidance going forward than what NMC received from the state’s regulators this week.
by Emerson Lynn