Vermont Hospitals Face Spending Caps, UVMMC Budget Sparks Debate
The Green mountain Care Board approved budgets for all 14 of Vermont’s hospitals on Friday. The approval of a $1.9 billion budget for the University of Vermont Medical Center (UVMMC), the state’s largest hospital, followed significant losses adn raised questions about the flow of funds between Vermont and New York facilities.
After a week of hearings in August, the five-person regulatory board considered public comment and finalized each hospital’s budget for fiscal year 2026. The board stated its goal is to balance hospitals’ financial stability with patient affordability. Regulators decided to limit spending and revenue collection in three key areas:
- Commercial price growth: 3% maximum
- Net patient revenue growth: 3.5% maximum
- Operating expense growth: 3% maximum
At UVMMC, commercial rates were cut by 16.2%. The hospital’s submitted budget proposed a 7.9% decrease in commercial rates, factoring in enforcement, new legislation limiting pharmaceutical prices, and a mid-year budget adjustment. Thes changes alone could have allowed the hospital to break even next year. Friday’s budget order reduces the hospital’s commercial revenue by $89 million.
A significant portion of this reduction stems from the board’s concern over UVMMC’s decision to release $16 million of its earnings to in-network hospitals in New York.”Ther is a lot of good and a lot of opportunity with the network, no question,” said GMCB Chair Owen foster. “All of that could be done with the medical center running the operation of the shared services of the network, and we could avoid some of the downside of seeing funds flow out of the Vermont hospitals.”
The Champlain Valley Physicians Hospital in Plattsburgh and Elizabethtown community Hospital are part of the university Health Network, which includes six care facilities. The GMCB made its effort to prevent another payout transparent in its decision. “So, it’s a reduction of the margin and a reduction of the $16 million that was budgeted to go to New York,” Foster said. “It’s not clear if the medical center will agree to not transfer the money.”
Steven Leffler, chief operating officer and president of UVMMC, argued that dissolving the network would be a mistake.”Many good things have happened. Vermonters and Upstate New Yorkers now can go across the region, where there’s one seamless electronic record,” he said. “The network allows us to have increased specialty services in different regions and does, believe it or not, help people access the medical center.”
Foster countered that the money would be better spent in Vermont. “Your plant is crumbling, falling apart and has a realy old age,” he said. “Yet, the health network has taken the money from your hospital and invested it in New York costs. That would be more appropriately used for Vermonters’ benefit at the Central vermont Medical Center.”