Financial woes may shutter Brattleboro Retreat

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(Host) The Brattleboro Retreat says its financial situation is so bad, it might have to close its doors. Retreat officials say reimbursements for mental health care need to improve dramatically if the Retreat is to stay in business. The non-profit psychiatric hospital has been in existence since 1834 and employs more than 400.

VPR’s Steve Zind reports.

(Zind) On a dreary day, under a low, overcast sky, the massive brick buildings of the Brattleboro Retreat conjure dark images of a 19th century mental hospital. Inside, it’s another story. The hallways and rooms are comfortable and well lit. A series of underground walkways connects the buildings. In one, the walls are decorated with paintings by children who have undergone treatment. Many of the drawings are somber and troubling.

The Brattleboro Retreat is the state’s only children’s psychiatric hospital. About one-third of the people in the Retreat’s out-patient and residential programs are children. The rest are adolescents and adults with psychiatric and addiction problems.

The Brattleboro Retreat has been struggling financially. Officials say the situation is so bad the facility may have to close. In the past year, the retreat has spent $2 million more than it’s taken in. That pattern has continued for a number of years. Until now, the Retreat has used its endowment as a cushion to absorb the losses. Rick Palmisano is CEO of the Brattleboro Retreat:

(Palmisano) “Over the course of many years, that endowment’s been substantially depleted. So we can no longer rely on the endowment to fill the hole. In fact, the endowment at this point is basically not available, because it’s completely leveraged with debt.”

(Zind) Palmisano says the Retreat’s hardships are intertwined with a widespread attitude that psychiatric care isn’t an important part of overall health care. He says over the last 15 years, the amount allotted by insurers for mental health services has declined more than 50%.

(Palmisano) “It’s easier to cut mental health benefits, because none of us believes we’re going to need it. And it’s something that employees don’t stand up and demand, ‘Wait a minute, what do you mean you’re going to cut my mental health benefits?'”

(Zind) Palmisano says reductions in mental health coverage have been coupled with restrictions on how that coverage is used.

Palmisano also blames the state of Vermont for the Retreat’s troubles. About a quarter of the people treated there are Medicaid recipients. The state decides how much to reimburse the Retreat for their care. Palmisano says the reimbursements are woefully inadequate. He says unlike regular hospitals, the Retreat can’t shift costs to health insurance companies to make up for low Medicaid payments.

With more than 400 employees, the Brattleboro Retreat is the second largest employer in Windham County. The average salary is over $40,000.

Rockingham Representative Michael Obuchowski says even though the hospital is a major economic force in Windham County, it can’t get the kind of help the state extends to manufacturers who are in trouble:

(Obuchowski) “If this were a factory and they were making widgets and they employed 422 widget makers that were getting paid $42,000 a year each, what would we do for those folks? They’re not in a position to use tax credits, they’re not in a position to use job training funds. Any of the multitude of things the state can do to help out a widget manufacturer.”

(Zind) Obuchowski says state efforts to help the Retreat must go hand in hand with cost cutting measures at the Retreat. But Palmisano says the Retreat has done all it can to save money. He says it’s expanded some programs and cut others that were losing money.

(Palmisano) “In the last two years we’ve cut our expenses 20%. I think I’m probably the only hospital that can say that in the state of Vermont. That’s a huge number. We really feel like we’ve gotten down to the core of our services. Further cuts will be very difficult.”

(Zind) Palmisano says in addition to increasing Medicaid reimbursement, the state needs to change regulations to allow more people receiving Medicaid to get care at the Retreat.

Governor Jim Douglas visited the Retreat soon after he took office. Palmisano says the initial response from the new administration to the Retreat’s plight has been positive, but he says change will have to come soon. Palmisano says the Retreat can’t last another year if it continues to lose money.

For Vermont Public Radio, I’m Steve Zind in Brattleboro.

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