State regulators rejected a budget proposal from the University of Vermont Medical Center on Friday that they say would have only worsened the state’s health care affordability crisis.
The Green Mountain Care Board voted to cut about $88 million in projected revenue from the UVM Medical Center’s proposed $2.4 billion spending plan. Those reductions must come in the form of reduced charges to commercial insurance companies, regulators said, which should relieve pressure from Vermont’s nation-leading premium rates.
Regulators were urged this month to cut the medical center’s budget as part of Vermont’s race to reduce health care spending following years of exorbitant growth.
To justify the cuts, board members pointed to their growing concern over the financial entanglements of the University of Vermont Health Network, the sprawling parent organization of the UVM Medical Center and five other hospitals across Vermont and New York.
For years, the care board has suspected that the health network has been draining money out of its flagship Burlington hospital to cover losses across the lake. But hospital leaders have maintained that any interstate transfers between its hospitals have no impact on the commercial insurance rates paid by Vermonters.
On Friday, care board chair Owen Foster said it’s no longer up for debate. The health network is clearly relying on inflated commercial rates in Vermont to build up margins big enough so that it can subsidize its unsustainable New York operations, he said.
This is unconscionable at a time when other Vermont hospitals are cutting services, such as Copley Hospital’s recently announced closure of its birthing unit, Foster said.
“Our health care dollars need to be here,” he said.
Foster called on the Burlington hospital to recoup the tens of millions of dollars in outstanding loans, which would help it cover the gap created by the board’s budget decision.
He also urged the hospital to reduce what it contributes to the parent network, which he described as an “ineffective layer of overpriced and unnecessary corporate bureaucracy.”
To that end, the care board cut $465,000 from the medical center’s operating expenses — the amount that the hospital was scheduled to pay toward a proposed 9 percent pay raise for top health network executives.
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