Is NMC Reducing Expenses Again?
Yes, NMC’s Fiscal Year 2020 budget (FY’20, which begins on October 1, 2019) contains an additional $1 million approximately in expense reductions beyond the cuts made during FY’19. This difficult action positions NMC to return to a positive 1% bottom line after three consecutive years of losing money following a significant rate reduction imposed by the State in 2016.
As you may remember from a column in March of 2019, NMC’s FY’19 Operational Improvement Plan targeted a $2.8 million improvement to return NMC to ‘break even’. Unfortunately, as this year progressed, continued above-budget staffing levels, unexpected physician absences, and challenges with our electronic health record conversion created greater financial strain than anticipated. Given this, our cuts within FY’19 were not large enough to reach break-even for the year. This shortfall impacted our forecasts within the FY’20 budget, necessitating additional cuts from expenses beyond the cuts which had been identified as part of our FY’20 budget creation process.
NMC Leadership has been working with the Management Team and Medical Directors to identify the necessary reductions in expenses for FY’20. As was done in FY’19, every effort has been made to minimize the direct impact on hospital employees. Our resulting plan calls for:
• The elimination of management and administrative support positions, effective August 8, 2019;
• Reductions in NMC’s investment in RiseVT and Lifestyle Medicine;
• Acceptance of the early retirement offering by three of NMC’s employees;
• Savings within contract services;
• Re-filling only those open positions which cannot be reconfigured and absorbed within existing staffing;
• Maximizing our 340B prescription drug reimbursement program;
• And other operational/redesign changes resulting in cost-savings.
These have been very difficult decisions to reach and have been discussed in detail with our Board of Directors. We have deeply appreciated the work of those who were personally impacted and have provided appropriate severance packages to those involved. We simply cannot sustain that level of expense in today’s healthcare environment.
NMC is currently working through a strategic planning process where the NMC Board, Medical Staff, and Leadership are using input from industry experts, hospital staff, and community members to restructure and reshape our services and programs to achieve sustainability in the future healthcare system and help lead our community to a healthier future.
NMC is a strong hospital continuing to have a strong balance sheet and delivering a level of exceptional care that has earned our team repeated recognition as one of the Top 100 Rural and Community Hospitals in the nation. Still, transforming the healthcare care system to reduce cost while improving quality and focusing on population health is quite a challenge that all Vermont hospitals face. I am proud of this team and the care we provide. Please be reassured we are positioning this hospital to serve this community for the long term with the best care locally.
— Jill Berry Bowen, RN, NMC’s Chief Executive Officer