NMC Commentary
08.28.2018

What was NMC’s Requested Rate Increase at the Green Mountain Care Board hearing?

NMC’s proposed rate increase was 2% for Fiscal Year 2019 (FY’19) and notably the lowest request among all Vermont hospitals. As we presented our proposed FY’19 budget to the Green Mountain Care Board (GMCB), which regulates health insurance rates and hospital budgets in Vermont, we made that point that NMC has had the lowest overall average annual rate increase among all Vermont hospitals since 2012, coming in at 2.125%.  With the leadership of our community Board of Directors and through the devotion of our staff and medical staff to exceptional care and our organization-wide focus on efficiency, we have been able to navigate very uncertain times amidst healthcare reform and continue to serve our community. We are doing this while operating on thinner margins than industry standards recommend, as we understand the need to bend the cost curve in healthcare and are leading those efforts.

I could not have been more proud to have presented NMC’s budget and our community’s story to the GMCB alongside NMC Chief Financial Officer Chris Hickey, and on behalf of the entire NMC family and our community. I appreciated the members of our team who attended the presentation to help answer any questions, especially the Vice Chair of the NMC Board, Janet McCarthy, RN, the Executive Director of Franklin County Home Health Agency and the Chair of our community’s Unified Community Collaborative.  The GMCB seemed very receptive to our presentation and it really felt more like a conversation than a hearing. They asked insightful questions about our finances and praised our staff’s efforts to improve quality of care, calling those efforts “impressive.” They were also complimentary of the budget package our team had submitted, which I sincerely appreciate and echo, as so much time and energy goes into this process from our team.

It is important to note that the Vermont hospital system as a whole is seeing revenue growth of only 2.9% — well under the 3.2% target established by the GMCB. Throughout the budget presentations, it was clear to see that Vermont’s hospitals are leading the way in healthcare reform as we transform from traditional ‘fee for service medicine’ (where providers are paid for each patient they see and each test or procedure done) to a ‘Population Health’ based approach (where providers are paid a set amount to keep a population healthy).  This is a remarkable shift in the healthcare system that involves significant financial risk for hospitals. Vermont’s not-for-profit hospitals are stepping forward and taking on that risk through the OneCareVermont accountable care organization.  We are collaborating with one another to reduce duplication and improve systems of care. We are also rising together towards better health, improved quality of life, and lower healthcare costs – as the RiseVT movement to embrace healthy lifestyles scales up across the state.

It is also important to understand that the growth in revenues at NMC is driven by our efforts to ensure access to appropriate medical care in our community.  Our FY’19 budget includes revenues for a new Ear, Nose, & Throat (ENT) practice, a Neurology clinic, an expansion of Pulmonology, and a new General Surgeon.  These are services which our community needs, but have previously either been provided in Burlington or through local private practices. In taking on those efforts within the hospital to ensure continuity of care and improve access, NMC takes on the financial aspects of them as well, which represents growth in the hospital budget in the GMCB reporting, even though these were existing costs located elsewhere in the system before becoming part of NMC. We have asked the GMCB to recognize that these ‘transfers’ of expense are appropriate shifts in revenue within the system.

These are challenging times for Vermont’s hospitals.  We recognize that healthcare overall is too expensive and we are actively working to bend the cost curve through greater efficiency and investing in prevention. Amidst that, we will never waiver on our focus on quality and access. It truly is an ongoing balance of regulation and reality as we care for our community. It is my priority to take care of my employees and NMC family, my hospital, my community.  Throughout that balancing effort, I do ask myself “am I truly listening to my community?” and “am I truly listening to my staff?” as I need and welcome your input. Please share your thoughts with me as we move forward to a healthy Vermont, together.

— Jill Berry Bowen, NMC’s Chief Executive Officer