Op-Ed | Claudio Fort, CEO of North Country Hospital

2 mins read

At North Country Hospital in Newport, improving the health of our community is our greatest responsibility. Every aspect of running this hospital – from budgeting, to planning for improvements, to deciding what services we can or should offer – is in service of helping the people of our region get and stay healthy.

Each year our team puts together a budget that reflects the health care priorities of our patients. Regulators at the Green Mountain Care Board examine it carefully and ask many questions about what’s necessary, how we’re participating in health care reform efforts, and how all of the pieces fit together into a responsible budget that does not lead to unnecessary insurance rate increases to our patients. This process is unique to the state of Vermont, and each one of Vermont’s hospitals participates in it every year.

Each hospital faces unique challenges. As not-for-profit institutions, we must strike a delicate balance between predicting how many people will come to us for care, how much it will cost us to provide that care, and how much funding we need to reinvest in equipment and our facilities so that we can continue providing the modern and personal care that Vermonters expect and deserve.

At North Country, we have been experiencing an increase in utilization, primarily in outpatient services. This means that more people are coming to us for care than have come to us in previous years.

Factors from outside our state borders also directly impact our budget. For example, certain pharmaceuticals this year increased in cost by $2.27 million, a 74% increase over the previous year.

Vermont’s hospitals have been working in good faith with state regulators for years to hold our budgets down to historic lows and change the way we deliver care. However, despite the efforts of Vermont’s hospitals, health care costs continue to rise, and force business leaders and families to make difficult choices.

For Vermont’s hospitals, particularly North Country, the discussion is not about how to “increase profits,” as some have suggested – it’s about making sure we are able to keep our doors open. This year, our hospital has requested modest rate increases that we predict will allow us a net operating profit margin for 2017 of just 1.33% to reinvest in patient care.

It’s vital to consider budget numbers – especially increases over time in net patient revenues and operating surpluses – in the context of our margin, which reflects both our revenues and our expenses. It’s gotten much more expensive to provide care and we are an aging state. We must not perpetuate a misguided narrative that it’s somehow bad for hospitals to be on sound financial footing, able to invest in the latest technology and facilities. I can tell you firsthand the difficult choices involved in keeping a community hospital open, regardless of its size. Every decision must be made based on whether it helps us provide the best care possible for everyone in our community, regardless of their ability to pay.

The Green Mountain Care Board conducts its hospital budget hearings in full transparency. Our budget will be reviewed on August 18th at the Sheraton in Burlington. That’s a long drive for folks from the Kingdom, but I hope members of the public will take the opportunity to attend and hear more about our efforts to provide the highest quality, most affordable care we can.

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