Commission reviews hospital budget increases

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(Host) Vermont’s hospital budgets are on the rise. And the rates that the 14 hospitals charge next year are also expected to jump by approximately 5.4%. This week, a state commission begins its review of what’s driving the higher budgets – and whether the rate increases are justified.

VPR’s John Dillon reports.

(Dillon) Armed with spreadsheets and reams of data, the public oversight commission digs deep into each budget and tries to determine whether the increases are necessary.

With the exception of the Copley Hospital of Morrisville, budgets of all the state’s hospitals are rising. The largest budget increase was filed by Mount Ascutney Hospital, at 16.1%. The average increase is 9.5%.

When the oversight commission met earlier this month, state analyst Michael Davis said the increase generates about $91 million. State and federal health care programs don’t cover the full costs of care. So a greater portion of that increase is shifted to those with private health insurance.

(Davis) “Commercial insurance, on a relative basis, is paying more for that increase than it was on the ’02 budget.”

(Dillon) The state’s largest hospital, Fletcher Allen Health care in Burlington, plans to increase net revenues by $45 million. According to hospital spokesman Mike Noble, the hospital’s budget is going up more than 9%, but rates will rise by 3.5%.

(Noble) “The difference in those two numbers, the roughly 6% is due to anticipated volume, projected volume. And that volume really comes from a couple of different sources. The baby boomers and getting into those age brackets where they’re consuming far more health care. And then you’ve got an increase in referrals. And on top of that, you have Vermont’s population is aging so that the mix is an older mix.”

(Dillon) Fletcher Allen’s been in the spotlight recently. State and federal authorities are investigating allegations that hospital officials misled regulators about a $55 million parking garage.

Members of the public this month submitted detailed questions for the commission to ask Fletcher Allen. The questions focus on salaries and severance packages for top hospital officials. Other questions sought detailed answers on the complex financing of the parking garage.

David Yacovone, the chairman of the oversight commission, says the hospital will be under close scrutiny this week. But Yacovone says the questions will focus on budget issues.

(Yacovone) “The public oversight commission isn’t charged to do any investigations on the affairs of Fletcher Allen. That’s not appropriate. Our role in this instance is to recommend to the commissioner whether their budget is appropriate or not and that’s what we’re trying to focus on. The questions that have been presented to us are excellent questions and many of them are germane.”

(Dillon) Fletcher Allen will soon undergo another state review as well. The hospital recently asked for approval to buy a new $12.5 million computer system.

For Vermont Public Radio, I’m John Dillon.

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