Hospital suit settled out of court

The Outpatient Building at Brattleboro Memorial Hospital. BMH is requesting a 14.9 percent rate increase for fiscal year 2023 to help offset the $3.7 million it took from its reserve accounts from October 2021 to June 2022.

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BRATTLEBORO — From October 2021 to June 2022, Brattleboro Memorial Hospital took $3.7 million out of its reserve accounts to fund operations, reducing the reserve from $9.2 million to $5.6 million.

As a result, the BMH Board of Directors is “very concerned about the financial performance and how fragile BMH is [which] cannot sustain $3.5 million losses,” stated Rhonda Calhoun, chairwoman, in information provided to the Green Mountain Care Board.

To meet the needs of the hospital and the community it serves, BMH is requesting a 14.9 percent rate increase for fiscal year 2023, which starts on Oct. 1, or it might lose even more money.

This is “the most difficult time this Board has experienced,” states the information provided by Calhoun.

Christopher Dougherty, BMH’s new president and chief executive officer, said on Tuesday that it might sound as if the sky is falling, but it’s simply a period of transition for BMH and hospitals around the country.

“Every hospital in the United States is in an area where we’ve never been before,” he said. “But hospitals have been in lots of areas where they’ve never been before and we’ve always found our way out of it. That’s all this is, another ‘finding our way out of it in the best way possible.’”

The budget proposed for FY23 is $108,480,389. In FY22, the budget estimate was $96,860,486 but the actual expenditures are projected to be $104,384,215.

Patient revenues helped to offset the increase, but the hospital still had to dip into its reserve fund to cover losses.

The Care Board is an independent five-member board whose members are appointed by the governor for six-year terms. Its responsibilities include reviewing and approving hospital budgets, as well as insurance premiums.

The Green Mountain Care Board is meeting with hospital leaders this week to discuss what the Vermont Association of Hospitals and Health Systems is is calling “stabilization budgets” for FY23.

Rate increases are the highest ever requested since the Care Board was created, according to the VAHHS.

“Historically, the GMCB has approved budgets at or below medical inflation,” stated a news release from the organization, which is a member-owned organization comprised of Vermont’s network of not-for-profit hospitals. “Over time, this has eroded hospital margins — the money left over after expenses that would be used to invest in staff, facilities, services and equipment. This has caused hospitals to delay repairs and new equipment purchases and made it harder to hire staff.”

Inflation has also hit hospitals hard, states the news release, prompting the cost of equipment and supplies to soar.

During a press conference hosted by VAHHS on Aug. 10, Dr. Kat McGraw, BMH’s chief medical officer, said in addition to dealing with changes in hospital procedures to address the COVID-19 pandemic, staff at the hospital have also been dealing with the day-to-day stresses of “fear of infection, grocery store shortages, sick family members, cancelled vacations, and kids going to school from kitchen tables.”

“This has left all of our hospitals with a workforce that is tired, worn out and truly a bit traumatized,” she continued, saying many staffers are suffering from moral injury.

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“Moral injury is the disconnect we have in being asked to pull together as a team to do the right thing, but not being provided the resources to actually accomplish our work,” said McGraw.

And to make matters even worse, said McGraw, staffers are dealing with “impossible circumstances of violence.”

“We see it come across in nasty words directed at nurses and doctors delivering care, and sometimes it comes across as shocking violence,” she said. “Not long ago, one of my colleague physicians suffered a career ending injury from a patient ... a blow from their patient caused a life changing physical injury, which has meant they can no longer practice medicine.”

Hospitals are also being called upon to address homelessness, food insecurity, the opioid crisis, mental health crisis, dental care, aging, and “the difficulties of life in general in a poor rural state,” she said.

“At my hospital,” said McGraw, “we recently discharged a patient waiting more than 200 days for an accepting facility, and shortly after, another waiting over 100 days. ... This ultimately unreimbursed stay takes up space and staff attention that is already stretched thin and needs to be available for the sick folks arriving in our [emergency departments].”

“They were medical patients who no longer had medical needs who could have been discharged,” McGraw told the Reformer on Tuesday. “There was no appropriate place for them.”

During the VAHHS press conference, McGraw said hospitals around the state have been “bending the cost curve, which is really trying to squeeze out any excess that we could find in a way to really rein in costs for Vermonters.”

While Vermont hospitals have been doing that “with some success,” she said, “we now have increased costs that we can’t buffer in ...”

Dougherty told the Reformer the hospital was on track to remain within its budget when the COVID Delta variant wave struck, driving up expenditures again.

One of the ways BMH hopes to balance its books is by reducing its reliance on traveling nurses.

In the first quarter or FY22, BMH spent $242,000 on traveling nurses. But when the Delta variant struck, costs soared to more than $4 million.

“We’ve put in place a whole bunch of programs to really work to ratchet that down and be able to have employed staff,” said McGraw, including a nurse residency program and financial incentives to retain staff.

“Our goal is hopefully by 2024 we will have weaned ourselves off the travelers because we’ve been able to build up our workforce,” said Dougherty.

Even though BMH is asking for a rate increase, patients probably won’t see their bills or premiums go up, at least not right away.

“The reality is,” said Dougherty, “you’ll meet your deductible faster because of rate changes. But your deductible is set by the insurance companies, not by us.”

Bob Audette can be contacted at