Eight Vermont hospitals saw negative operating margins in fiscal year 2018 as expense growth outpaced revenue growth, according to operating results outlined in a Green Mountain Care Board review.
The operating results show hospital revenues —including net patient revenue and fixed prospective payments under Vermont's all-payer model — increased 3.1 percent systemwide in the fiscal year that ended Sept. 30, compared to the year prior. At the same time, operating expenses grew 5 percent year over year.
The hospitals' average operating margin, representing revenues over expenses, was 1.4 percent systemwide in fiscal year 2018, down from 2.7 percent in fiscal year 2017.
Overall, eight hospitals saw negative operating margins in fiscal year 2018:
- Springfield (Vt.) Hospital — 12.8 percent
- Gifford Medical Center in Randolph — 10.7 percent
- Brattleboro (Vt.) Memorial Hospital — 2.4 percent
- Central Vermont Medical Center in Berlin — 3.8 percent
- Copley Hospital in Morrisville — 3.3 percent
- Grace Cottage Family Health & Hospital in Townshend — 2.9 percent
- Northwestern Medical Center in St. Albans — 3.4 percent
- North Country Hospital in Newport — 2.3 percent (preliminary)
Only six hospitals saw positive operating margins in fiscal year 2018:
- Mt. Ascutney Hospital and Health Center in Windsor —1.9 percent
- Northeastern Vermont Regional Hospital in St. Johnsbury — 1.7 percent
- Porter Hospital in Middlebury— 1.8 percent
- Rutland Regional Medical Center in Rutland City — 0.5 percent
- Southwestern Vermont Medical Center in Bennington —4.6 percent
- UVM Medical Center in Burlington — 3.4 percent
Jeff Tieman, president and CEO of the Vermont Association of Hospitals and Health Systems, told VTDigger that some hospitals are in "really challenging financial situations."
"We also believe, especially here in Vermont, that they are facing pressures and making investments, [such as financial support of the state's all payer model and the statewide accountable care organization], that challenge them to an even greater degree," he said.
Mr. Tieman said cost control is also a key focus for hospitals.
"There's a laser focus on expense management and reduction across our system, and also a deep commitment to health reform and moving to a value-based system," he said. "And we need the financial headroom to achieve that."
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