NMC Commentary

Should For-Profit Competitors Pay the Same Provider Tax as Hospitals?

Yes.  As you may remember, last year the Green Mountain Care Board (GMCB) approved the construction of a for-profit Ambulatory Surgery Center (ASC) in Chittenden County.  In their decision, the GMCB placed numerous conditions on the applicant in an effort to ensure that facilities like that carried some of the same expectations that are placed on Vermont’s not-for-profit hospitals.  Currently, the Vermont Legislature is considering legislation to take that a step farther and extend the provider tax and other fees/expenses that hospitals must pay to these new competitors who tout having lower prices.  At NMC, we are fully prepared to compete for patients if that is what is required – all we ask for is a level playing field.  Here is the text of the letter I recently sent to the Franklin and Grand Isle County legislators on this topic.

“I am writing to express Northwestern Medical Center’s strong support for the proper regulation of for-profit Ambulatory Surgery Centers (ASC’s) and the associated proposed legislation, S.278, which is sponsored by Senator Claire Ayer.”

“Vermont’s hospitals have existing surgical capacity which these new ASC’s are duplicating with costly new infrastructure.  The ASC approach is actually a step backwards away from population health to the fee-for-service medical mindset; hospitals with OneCareVT are leading the transformation to a capitated model focused population health.  The direction collectively as a state we want to go in.  Our testimony during the Certificate of Need process repeatedly called for “a level playing field” if a new competitor was introduced into Vermont.  While we were disappointed that the Green Mountain Care Board (GMCB) did not reject the ASC application based on a lack of need, we were pleased that the decision carried conditions which began to create a more level playing field for the new for-profit and Vermont’s not-for-profit hospitals with which it will compete for surgical volumes. Northwestern Medical Center is fully willing and able to compete on a level playing field.  S.278 is the next logical step in the leveling of that playing field.”

“The proposed ASC is quick to tout the promise of lower charges – and it is clear that hospitals’ charges would also be lower if hospitals were not subject to the 6% provider tax, licensing fees, accreditation requirements and costs, the provision of charity care, mandated bill-back costs to fund regulatory activities, etc. S.278 begins to ensure that if an ASC is to operate in Vermont, it must carry these same required cost obligations as the hospitals with which it intends to compete.”

“Vermont’s hospitals are currently being called upon to fund the future of healthcare reform in our state.  We are working closely with the GMCB on cost containment and have shown results.  We are taking on the financial risk within the shift away from fee-for-service to population health through the Accountable Care Organization.  We are investing in addressing the priorities within the Community Health Needs Assessments all across the state.  We are leaders in the long-term investment in primary prevention to reduce the demand for costly medical treatment.  We need your support to ensure that if a competitor is introduced that threatens to draw off the revenue with which we make those investments, that at least the playing field of regulatory costs is level for all.  Please support S.278.”

I appreciate the ability to reach out to our elected officials on important topics such as this and the ability provided by this column to share that information with our community. At NMC, we have a strong daily focus on efficiency that is reflected in our ‘supply costs as a percent of net revenue’ which is below the national benchmark. With this work, we are able to compete with an outside facility if that outside facility has to pay the same provider tax and other fees and cost obligations which are required of us. I am proud of this work by our team and appreciate the efforts of the GMCB and the legislators to ensure that if competition is to remain part of the healthcare system that it happens on a level playing field.

— Jill Berry Bowen, NMC’s Chief Executive Officer