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The home for VPR's coverage of health and health industry issues affecting the state of Vermont.

Hospital Budget Growth Is Low Again This Year

For the second year in a row, the projected budget growth for Vermont’s 14 hospitals is well under recent trends.  

While the growth in budgets varies from hospital to hospital, the Green Mountain Care Board has given its approval to an overall statewide increase of 3.1 percent. Last year, the growth rate was 2.7 percent.

Green Mountain Care Board chairman Al Gobeille says the growth in hospital budgets over the past two years is less than half of what it was between 2008 and 2012.

"Their commitment quite frankly sets a tone for everything we are trying to accomplish." - Green Mountain Care Board Chairman Al Gobeille on the effort by Vermont hospitals to keep costs down

“I think it sets a tone of, you know, the hospitals have always been where the money is. Big growth a lot of money obviously we’re talking $2.2 billion,” said Gobeille. “Their commitment quite frankly sets a tone for everything we’re trying to accomplish.”

Gobeille says the next big step for his board is to develop a payment reform system for hospitals that replaces the current fee-for-service model.

“They can’t just cut volume and not destroy their ability to have a margin. So they’ve got to be paid for taking responsibility for the health of a population and that’s where we want to go and it’s going to take some time to get there but it’s certainly the goal.”

Gobeille says the Board gave its approval to what is known as a “commercial” rate increase of just over 5 percent. This is the rate that will be used by private health insurance companies to determine their premium levels for next year.

Gobeille says the commercial rate is considerably higher than the growth of hospital budgets because some government health care programs, like Medicaid, do not reimburse providers with the full cost for services. When this happens, Gobeille says these costs are “shifted” over to private insurance companies and this is reflected in higher premiums.

Bob Kinzel has been covering the Vermont Statehouse since 1981 — longer than any continuously serving member of the Legislature. With his wealth of institutional knowledge, he answers your questions on our series, "Ask Bob."
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