Vermont Hospital Budgets Come In Below Targets

Jul 10, 2014

Vermont’s 14 hospitals have submitted budgets for the fiscal year starting Oct. 1 that increase by just 2.6 percent over the current year’s budgets, the smallest annual increase for the Vermont health care delivery system in four decades.

Proposed spending for fiscal year 2015 came in at $2.229 billion, compared to the $2.172 billion approved by the Green Mountain Care Board for the current fiscal year. The 2.6 percent increase amounts to just under $57 million in new money.

The Green Mountain Care Board has the authority under state law to set the budgets for the state’s hospitals. The board will hold hearings on the individual hospital budgets later this summer. It will render a decision on each budget in September.

The 2.6 percent increase in Vermont's hospital budgets is the smallest annual increase for the Vermont health care delivery system in four decades.

A target limit was set by the board at 3 percent, with up to .8 percent permitted for costs that the board deems vital to the advancement of health care reform. Al Gobeille, chair of the GMC board, said that he was very pleased by the submissions.

“We have to go over these figures carefully, and there may be a few outliers, but I am very gratified that the system increase is as low as it is,” he said.

The 2.6 percent inflation figure follows on the heels of a 2.7 percent jump in the current year. Taken together, the performance of the hospital system should be considered a positive augury in the coming debate over Gov. Peter Shumlin’s single-payer reform initiative.

The most critical test that project faces in the coming legislative session is the requirement in state law that the government demonstrates that it can reliably control costs out into the future. That will be a very hard test, but the last two years' budget increases have come in at about one third the rates since 2000.