Stat v.26 – October 9, 2026
Unpacking the Work of the UVMMC Liaison Team
October marks the conclusion of the work of the independent Liaison Team headed by Mike Smith on behalf of the Green Mountain Care Board (GMCB), the University of Vermont Medical Center (UVMMC) and UVM Health. In their concluding statement, the team describes their work as “mission that is ongoing” rather than “mission accomplished.”
We agree, there is more work to do!
The Liaison Team was appointed in April 2025 as part of a legal settlement between the GMCB and UVM Health. That suit arose after a GMCB budget ruling about prior year (2024) budget over-runs.
The Team was charged with providing independent oversight and analysis of UVM Health’s finances, operations, and management decisions, giving it an insider’s view of both UVMMC and the network as a whole. While the Green Mountain Care Board reviews detailed hospital budgets annually, the Liaison Team’s role was to dig into what was happening underneath the numbers.
The resulting independent, hands-on examination of UVM Health finances and operations has provided a roadmap to a financially sustainable future. One that could make Vermont health care more affordable and protect access to care.
Here is a summary of their findings and recommendations.
Memorandum 1: August 7, 2025
The first memo focused on commercial insurance rates and the relationship between UVM Health and BlueCross and Blue Shield Vermont (BCBSVT). It described “a simmering and ongoing adversarial relationship” and recommended limiting reimbursement for services to 500% of Medicare rates. This policy approach, setting prices in reference to Medicare rates, was augmented by also asking UVM Health and BCBSVT to prioritize repairing their relationship and collaborating on lowering costs.
A year later, VPR reported that UVMMC and BCBSVT reduced rates by an average of 12%.
Memorandum 2: August 29, 2025
This memorandum examined UVM Health’s financial structure and suggested costs could be reduced through administrative consolidation, operational efficiencies, and stronger financial management. It emphasized that systemic operational changes were necessary to improve affordability because expense growth was unsustainable. It also challenged the accuracy of UVMMC’s budget submission and its accompanying account of cost reductions.
Within a month of this memo, the GMCB cut UVMMC’s revenue by $88.5M and UVM Health CEO Sunny Eappen announced his resignation.
Memorandum 3: February 10, 2026
This offered a progress report on network-level administrative changes resulting in an estimated $8.1M in annual savings and encouraged more rapid implementation of recommendations from earlier management consultations. It also addressed directly the fungible financial relationship between UVM Health’s Vermont and New York hospitals, concluding that “amounts due to UVMHN from NY operations are approximately $105.5 million in FY25.”
The memo reported that the Liaison Team had commissioned two independent studies: 1) an analysis of the productivity (i.e., clinical optimization) of UVM Health clinicians compared to industry peers, and 2) a multi-year financial plan reflecting scenarios of expense trends and reimbursement expectations (UVM Health’s 2030 Strategy). The results of these studies “will highlight the extent to which UVM Health must improve efficiencies to strive towards affordability and maintain fiscal stability” (p.3). Further, it describes developing a set of affordability metrics to track progress in future years,
These longer-term recommendations are ongoing. In their 2027 budget proposal, UVMMC accounts for $5.29M in loan repayment from New York hospitals. Their work to bring physician productivity up to industry peers is underway.
Memorandum 4: May 1, 2026
Productivity, costs, and financial sustainability are at the center of this memorandum, and its findings are particularly consequential. The 2030 Strategy Report found that UVM Health needs to reduce operational costs by $300 million over three years to come in line with predicted revenue. It found that the productivity of the Medical Group at UVM Health – 1,000 clinicians across 154 outpatient clinics – was in the lower 50 percentile compared to industry peers. If the clinical productivity of the Medical Group improved to the 50th percentile it would enable 26% more clinical services.
In other words, UVM Health has substantial opportunities to become more productive and less expensive by cutting administrative expenses and improving efficiency first. The memo also acknowledges that reductions of this magnitude will impact clinical services and these should be coordinated with other hospitals and the AHS-led rural health transformation process.
These are obviously works in progress.
Memorandum 5: July 30, 2026
This report reviewed the 2027 University of Vermont Health Budget and emphasized that “healthcare is unaffordable in Vermont and costs must come down, UVMH needs to operate its Medical Group more efficiently, and between now and 2030 increasing financial pressure on revenues will require that expenses be reduced by at least $300 million over the next three years.”
The memo also called for an additional reduction of $50M in expenses over what is in the 2027 budget submission.
On the positive side, it describes a much more engaged and collaborative leadership under Dr. Steve Leffler, who took over as CEO in October 2025.
The GMCB budget ruling reduced revenue by $32M of the additional $50M called for in the memo.
Memorandum 6: September 21, 2026
This credits UVM Health with having made meaningful progress, and offers eight significant findings that, taken together, propose a broad, long-term view of the work needed to address affordability and access in Vermont’s health care system.
Set an affordability target before negotiating provider rates. The team wants the GMCB to issue guidance on acceptable insurance premium increases first, then have insurers work within that limit when setting payments to providers and pharmacies. This is the inverse of the current process at the GMCB. It estimates that holding commercial premium growth to 4% could require $100–$150 million less in annual payments across Vermont’s health care system. This would require that insurers and regulators collaborate in new ways to bring down costs.
Spread cost pressure beyond hospitals. The memo says Vermont’s 14 regulated hospitals account for about 43% of health care spending, while other providers and pharmacies account for the rest. It urges comparable pressure on “unregulated providers” (outpatient medical groups, pharmacy and out-of-state hospitals) and calls for closer examination of pharmacy costs, which it says are growing particularly quickly.
Measure affordability more broadly. The team recommends tracking costs borne by employers and patients, and growth in spending per person relative to wages, alongside GMCB’s existing measures. Plus, it calls for creation of an annual report card on what patients and employers actually pay relative to their capacity to pay.
Tie UVM Health pay and operations to results. It recommends no increase in 2027 senior executive compensation until measures for affordability, access, quality and financial stability are established and met. It also calls for physician pay to reflect individual performance more closely, better patient scheduling systems, higher productivity, and shorter wait times for patients.
Plan medical education around Vermont’s workforce needs. The team is particularly concerned about declining capacity in primary care. It calls for a transparent statewide planning process involving UVM, UVMMC and state policymakers. The memo estimates UVMMC’s 2025 medical education costs at $161 million, with about $82 million paid for through commercial insurance.
Change GMCB budget review and keep monitoring progress. The team wants a simpler, multi-year review focused on affordability, access and financial sustainability. It supports UVM Health’s planned management system and stronger data capabilities.
Finally, the Memorandum recommends that Liaison Team member Stephen Gorman check in with the Working Group (comprised of GMCB, UVM Health and UVMMC board members) quarterly over the next year to monitor progress.
Most of these recommendations are for the out-years but it’s notable that the 2027 budget approved by the GMCB in September calls for a thorough understanding and transparent accountability of how much money and resources flow between UVMMC and the Larner Medical School at the University of Vermont.
Taken together, the findings and recommendations of the Liaison Team represent the clearest roadmap to health care affordability to date. We can only pay for what we can afford. Reducing the growth in commercial insurance premiums is a universal concern, but, as the Liaison Team stresses, the regulatory process responsible for this objective must be accompanied by bold structural changes in hospital performance and care delivery across the healthcare system.
This, in turn, requires sustained stakeholder engagement, a deeper understanding by the public of the tradeoffs involved in where and how medical care is delivered, and ultimately, the development of a consensus to balance the cost of essential services while improving timely access to and the quality of care.
Vermont Healthcare 911 (VHC911) is a broad coalition united to combat the high cost of healthcare in Vermont. The coalition is composed of business owners, labor leaders, healthcare providers, civic and political leaders of all parties and represents about 200,000 Vermonters.