Bill Schubart: Questions For Our ‘Nonprofit’ Healthcare System Governing Boards
As healthcare costs in Vermont gobble up more and more expendable resources needed for housing, education, property tax abatement etc. it’s time to ask hard questions and hold providers and their governing boards ethically and legally accountable for honest answers and transparency instead of further mission-failure and PR psychobabble.
Key to understanding the current healthcare crisis today is its history. Established in 2011, UVMHN, formerly called Fletcher-Allen Partners, by 2018 had acquired three New York hospitals and two more Vermont hospitals, Central VT Medical Center in Berlin and Porter Hospital in Middlebury, and also the former Chittenden/Franklin County Visiting Nurse Assoc. (VNA).
It’s important to understand that UVMHN is not a hospital but rather a lucrative healthcare business aggregator acquiring and running hospitals and healthcare service institutions to expand market share. The stated goal was, through collaboration and cost-efficiencies across the network, to lower costs, improve access, and enhance the service quality. But what has emerged from all this is a bloated monopoly that has skyrocketed healthcare costs and reduced access for Vermonters and Vermont businesses, while failing to achieve “cost efficiencies.”
Latest available 2019 data from PubMed, a division of the National Institutes of Health, shows $584M worth of annual waste embedded in UVMMC on the administrative and management side and a total of $1.038B in waste across all Vermont hospitals. So much for systemic cost-efficiencies.
Vermont healthcare employees fall into two groups: hands-on healthcare providers (clinical) and system managers and administrators (overhead). When the $1.9B budget of UVM Medical Center (UVMMC) is broken into these two categories, it ranks among the worst ratios of any of the similar-sized academic medical centers in the country. A 2023 analysis of federal data by Rees Partners, LLC, showed UVMMC’s ratio of clinical care to admin/management to be 1.38 against a 2.30 mean among 44 comparable academic medical centers. or 40% worse than the mean.
While Blue Cross Blue Shield of Vermont (BCBS-VT) teeters on the brink of insolvency with less than two weeks of cash reserves to pay claims, UVMMC charges to all commercial insurers rose by $400M in FY 2024 — 74% of which were BCBS-VT claims. In the recent court settlement of a suit brought by the UVMMC against our state regulator, the Green Mountain Care Board (GMCB), the plaintiff agreed to offer $12M back to the BCBS-VT, adding insult to injury. On May 15th, BCBS-VT filed a rate increase request with the GMCB of 23.3% in the individual market and 13.7% in the small group market, increases needed to survive the ongoing overbilling.
Meanwhile, UVMMC lost $119.5M on Medicare reimbursements in FY2022 while 82 of 106 comparable academic medical center peers broke even or earned positive margins from Medicare. The average annual net profit in this group was $5M. Over the past 10 years, UVMMC has lost an average of $54.5M a year caring for Medicare patients.
Bill Schubart is former Chair of the VT Business Roundtable and Fletcher-Allen Health Care. He is now a board member for Vermont Health Care 911.
Full commentary: https://www.caledonianrecord.com/