The Green Mountain Care Board has capped overall hospital spending for next year at 3.75 percent.
But the decision does allow for higher spending if the money is targeted at specific cost saving investments.
This marks the first time that the board has reviewed hospital budgets and it’s part of the board’s overall authority to make decisions about virtually every aspect of health care in Vermont.
Anya Rader Wallack is the chair of the board. She says the goal was to limit the combined budget growth for all of the state’s 14 hospitals to 3.75 percent.
She says that goal has been achieved but it means that two hospitals, Copley in Morrisville and Porter Medical Center in Middlebury will have to make some reductions to their budgets.
While Rader Wallack is pleased that the 3.75 percent cap was met, she says it’s still higher than the rate of inflation:
"On the other hand, this is a big deal that we have approximately 40 percent of Vermont’s health care spending laid out clearly for us," Rader Wallack said. "And we made some decisions with the hospitals about a reasonable rate of growth and some important investments in long-term improvements in the health care system and long-term sustainable growth rates."
The board’s decision doesn’t mean that the growth in hospital spending will actually be capped at 3.75 percent. That’s because hospitals are allowed to spend money above the cap if they can prove that the investment will bring more efficiency and long term savings to the state’s health care system.
Rader Wallack says some hospitals were able to do this and these exemptions will raise the overall annual growth rate to 5.8 percent.
"Where we felt that the hospitals made good cases that they were investing in things, either strengthening access to care in their communities or adding new technology that was going to make them more efficient, or changing care delivery aimed at better managing specific patients where we thought that the long term payoff from those investments was clear," she said.
Hospitals that have taken on patients formally housed at the State Hospital in Waterbury were also allowed to include these costs in their above cap spending requests.