State Sets Vermont Hospitals’ Budgets

In their annual attempt to hold down hospital costs, Vermont officials have pared down rate increases sought by hospitals that averaged 7.7 percent in the state for 2005.

The average 7.7 percent average requested increase was comprised of individual hospital rate increase requests that ranged from 0.0% to 10%. These rate requests were determined by the individual hospitals to meet increasing costs and to strengthen operating margins.  

The state’s 14 hospitals must submit annual budgets for review by the state every July. The Vermont Department of Banking, Insurance, Securities, and Health Care Administration (BISHCA) approval process included an analysis by the department’s staff and testimony by the hospitals at August public hearings held before Commissioner John Crowley and the Public Oversight Commission.

The Vermont hospital fiscal year for 2005 runs from October 1, 2004 through September 30, 2005. Crowley took the following action on the incerases requested by five hospitals in approving FY 2005 budget levels: 

• Established the Rutland Regional Medical Center budget with a reduction in its rate request from a 2.4% to a 2.0% rate increase.  This establishes an operating margin of 3% for the hospital.

• Reduced the Southwestern Vermont Medical Center rate request from a 7.5% to a 6.0% rate increase. This establishes an operating margin of 4.8% for the hospital.

• Cut the Central Vermont Medical Center rate request from a 7.0% to a 5.5% rate increase. This establishes an operating margin of 4.0% for the hospital.

• Pared the Northwestern Medical Center rate request from a 2.9% to a 2.5% rate increase.  This establishes an operating margin of 2.1% for the hospital.

• Reduced Fletcher Allen Health Care’s rate request from a 10.0% to an 8.5% rate increase.  In addition, the commissioner has ordered that expenditures be reduced by 1% and also ordered revenue changes which when considered with the expenditure reductions will establish an operating margin of 4.3% in order to meet capital and financial health needs.

In addition to those changes in budget requests, Crowley approved the increases as requested for nine hospitals as follows:

Brattleboro Memorial Hospital [6.6%] 
Copley Hospital [8.0%] 
Gifford Memorial Hospital [5.3%] 
Grace Cottage Hospital [3.6%] 
Mt. Ascutney Hospital & Health Center [6.5%]  
North Country Hospital & Health Center [7.1%]
Northeastern Vermont Regional Hospital [0]
Porter Hospital [6.5%]
Springfield Hospital [4.8%] 

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