NMC Commentary

What did NMC request of the Green Mountain Care Board?

When NMC presented our requested Fiscal Year 2020 budget to the Green Mountain Care Board, we requested the budgetary latitude necessary to be sustainable while meeting our community’s needs and continuing to invest in Vermont’s healthcare system transformation. For NMC, this would mean a 5.9% rate increase which will still keep NMC strongly ranked among lower cost and higher efficiency hospitals given our 10-year history of among the lowest rate increases in the State.

I believe they appreciated our team’s straightforward and informative presentation. We made the point that NMC is doing the right things: We have been recognized as one of the nation’s “Top 100 Rural and Community Hospitals” again this year by the National Rural Health Association. We are a lean organization with an overall productivity index of 97% when benchmarked against the 75th percentile of hospitals within our national peer group. We have been courageous in taking on financial risk, ensuring access, investing in population health, and partnering in the transformation of Vermont’s healthcare system. Still, as we navigate that transformation, NMC has suffered a negative bottom line financially for three consecutive fiscal years and the current environment has made many of Vermont’s hospitals vulnerable. The time has come to align priorities and incentives within the system, so that as providers like NMC transform in keeping with the vision of the regulators and elected officials, our vital community organizations remain sustainable.

To help illustrate the dilemma and financial challenge of the transformation, I shared a patient’s story with the GMCB. I told them of a man in our community, in his 40s and significantly overweight, who said to an NMC health coach, “Thank you for getting my life back and my job.” Our team had worked with him on his lifestyle and personal habits and it had made a tremendous difference in his health and his joy in life. We are seeing these successes and hearing providers talk of patients being much more successful recovering from a surgery or possibly avoiding surgery altogether through lifestyle changes. That is absolutely the right approach for a transformed, capitated, population-healthcare system. That kind of individual health improvement and the prevention work out in the community is crucial – but we receive nearly no reimbursement for this work currently as we are still under the outdated fee-for-service model of medicine. That seemed to resonate with the GMCB. A healthier future for all Vermonters is at stake and Vermont’s hospitals, who are funding the transformation in large part, must be allowed the resources to make the transformation happen.

Another fact that stood out in our presentation was Director of Finance Stephanie Breault’s statistic that what cost a dollar at NMC in 2015 actually costs less than a dollar ($0.98) today! That is a reflection of strong efficiency work at NMC, but it is a status that has not come easily. Medical inflation has continued to rise at a rate noticeably higher than hospital revenues have been allowed to grow. That has resulted in losses, even with efficiency efforts. With that inflation, the revenue cap constrains the hospital from being able to continue to do all that we do. Difficult decisions have had to be made and we have done that. In our strategic planning process, our Board, Medical Staff Leaders, and Leadership Team are working with national experts and with input from our staff and community on how to redefine our services for the future. NMC is a vital resource with a long history. We are well positioned to weather this transformation. Change is never easy, but it can be exciting when something as important as a healthier future for all Vermonters is the target.

— Jill Berry Bowen, NMC’s Chief Executive Officer