How Was The Budget Meeting With The Green Mountain Care Board?
Sep 12, 2012 9:38 am| Permalink
It was straightforward and positive. The Green Mountain Care Board now has the regulatory responsibility over hospital budgets in Vermont, so it is very important that they have all the information they need before they make their rulings. Hospital budgeting is very complex, particularly given the uncertainties amidst healthcare reform efforts at the State and National level, so it was good to have this opportunity to discuss our proposed Fiscal Year 2013 budget.
We discussed how NMC compared to the Green Mountain Care Board’s announced revenue cap of 3.75% for overall growth in hospital revenues, not counting the allowable exceptions they identified. NMC’s budget, after adjustment for what we believe are appropriately interpreted exceptions, had a 3.1% increase in revenue. The exceptions are important because they recognize that the State and Federal governments are encouraging or requiring hospitals to participate in initiatives that impact revenues (either by increasing the care provided or by adding expenses that need to be covered by revenues). These areas include payment of the increased provider tax, investments in primary care to establish appropriate access, implementation of electronic medical records, participation in healthcare reform, etc. For NMC, an important exception relates to employing local physicians who were in private practice in our community when the FY’12 hospital budget was created. The costs of their practices already existed in our community, so it is not a new expense to the system; it is simply shifted into the hospital’s FY’13 budget. We have worked hard to retain physicians and that has meant having to employ a number of them to maintain access in our community. However, now their revenues have to be reported to the State within the hospital budget. That is the kind of legitimate exception to a revenue cap that must be made if proper access to care is to be maintained. It is important to note that even though the revenues are the same, there are additional expenses incurred by the hospital to maintain these practices. Examples of this include the tax that the State places on practices employed by hospitals and the increased regulations which hospital-employed practices are subject to through Joint Commission, etc.
We discussed NMC’s rate increase request, which was initially 2.9%, the lowest in the State. Given changes to reimbursement regulations announced after we submitted the budget, we anticipate the final rate increase we request will be even lower. That compares very favorably to the average of 8.1% for requested rate increases. Understandably, it is not always possible for NMC to have the lowest rate increase. There have been, and will be, years when we need to be higher than some others to maintain proper financial health for the organization. However, we were pleased with the analysis that shows NMC has had the 2nd lowest cumulative rate increase among Vermont hospitals over the past ten years. The comparative data also shows that NMC has one of the lowest levels of “Cost Per Adjusted Admission” among Vermont hospitals. These facts reflect very positively on the efforts of our staff towards efficiency and cost savings while maintaining our strong emphasis on quality improvement and patient satisfaction.
We also discussed NMC’s proposal to expand on our pilot to reduce avoidable Emergency Department visits. This pilot has shown the ability to reduce costs significantly without rationing care by using enhanced case management and other strategies to shift that care to more appropriate and less costly settings such as primary care or mental health. We believe it has the potential to be successful on a larger scale here at NMC and, actually, statewide. This is true healthcare reform in action. Anya Rader Wallack, the Chair of the Green Mountain Care Board, praised NMC for the initiative we have shown in pursuing this improvement and proposing the expansion of the pilot.
The members of the Green Mountain Care Board asked a wide variety of questions regarding NMC’s budget and how we run the organization. We appreciate the opportunity to have this discussion with them. They face quite a challenge in interpreting 14 complex hospital budgets amidst healthcare reform efforts and pressures to bend the cost curve. We hope we helped them understand our approach to caring for our community and the resources NMC needs to sustain that effort. We anticipate a ruling from the Green Mountain Care Board on our budget request in mid-September. I do worry about the changing face of healthcare, the impact on hospitals, and how this board will act on our budget. There is no doubt change needs to happen to reduce the cost of healthcare. That being said we need to truly understand the impact of the decisions being made on the access to care.
- Jill Berry Bowen, NMC CEO