Fletcher Allen Review

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(Host) Fletcher Allen Health Care has been under the microscope because of its huge “renaissance project.” Commentator Allen Gilbert thinks that the hospital’s troubles are a cautionary tale for all nonprofits.

(Gilbert) Recently, Fletcher Allen Health Care was again before the state’s public oversight committee. Fletcher Allen was seeking final approval of its huge expansion project. The project has been given the green light for $227 million, but it needs another $135 million to cover costs that it hid from regulators.

The members of the oversight committee were clearly frustrated with their task. “You’re really coming to us asking for forgiveness, not permission for what’s there already,” one member told interim hospital CEO Edwin Colodny

Colodny admitted that the hospital had acted inappropriately in the past. He called the most recent review “an opportunity for healing.” But he then, essentially, asked the committee to make the same decision that the former hospital’s board of directors had previously made, with such bad consequences. He asked the committee to agree that the one-third of a billion dollar expansion would be good for Vermonters. Approval from the committee would send the message that “the end result is positive” for Vermonters, Colodny said.

The committee is in a no-win situation. If its recommendation to state officials IS TO deny a certificate of need, and that recommendation is accepted, the hospital will be left with an unfinished construction mess. Approval, on the other hand, will seem like an after-the-fact rubber stamp.

Here’s what I find most troubling about the Fletcher Allen situation. Last winter, as expenses at the hospital galloped ahead of revenues, officials insisted that the expansion project had to move forward, despite the cost. The hospital needed the revenue that the new facility was projected to produce, they said.

This illustrates in stark candor the challenge facing many nonprofit institutions. The institutions may be founded on the mission of serving the public. But when does the institution itself become the focus of operation, and the customer is seen mainly as a source of revenue?

Granted, the bottom line is important for nonprofits and for-profits alike. But increasingly, nonprofits have strayed towards thinking and acting like for-profits. As a nonprofit grows, it becomes an important source of jobs in a community. It attracts grants for special programs or research. It rents more space or builds new buildings. It boosts the local economy. Its very existence becomes crucial, economically, to hundreds, sometimes thousands. Part of its mission becomes its continued existence — independent of the need and scope of the services it’s providing.

This is not an abstract concept, especially in health care. Fletcher Allen now has an overriding need to boost its revenue. To do this, it must provide more health care services. And for health care consumers, this is both an opportunity and a worry. It’s an opportunity if critical, necessary services can be provided close to home at a reasonable cost. It’s a worry if Fletcher Allen grabs noncritical services that might otherwise be provided just as effectively, and more cheaply, in other ways.

Modern medicine forces choices on us — choices about how we spend our health care dollars, and choices about who gets those dollars. One thing is clear: when health care is viewed as a business, some of us will gain, but many of us could lose.

This is Allen Gilbert.

Allen Gilbert of Worcester is a writer and parent who is active in education issues.

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