Rutland hospital’s CT scanner purchase under fire

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(Host) The Rutland Regional Medical Center is under close scrutiny for purchasing a state-of-the-art CT scanner.

Hospitals are required to show they need expensive technology, and the state says Rutland should have asked for approval.

VPR’s John Dillon has more.

(Dillon) The Rutland hospital began advertising last month for its new service – a high tech machine that allows doctors to look with great detail inside their patients’ bodies.

The machine is called the 64-slice CT scanner. It can deliver precise, three-dimensional images of the brain, heart and lungs. The scanner is used to identify problems like blood clots that previously could go undetected.

There was just one problem. The hospital needed state permission before it bought the new equipment, which cost $1.2 million. And the state had recently rejected a request by the Southwestern Vermont Medical Center in Bennington to buy similar equipment.

The Department of Banking, Insurance, Securities and Health Care Administration is investigating.  Peter Young is the assistant general counsel.

(Young) “There is an ongoing proceeding right now. I’m not going to talk in any detail about the nature of it. But, yes, when the department was aware of it, we began an investigation.”

(Dillon) State law requires hospitals to get a "certificate of need" before they spend $1 million or more on new equipment or services.

The law is designed to control health care costs, and reduce unnecessary spending.

Tom Huebner, the president of the Rutland medical center, said administrators thought that the hospital was below the $1 million threshold because they traded in the old CT scanner and used the money to offset the price of the new one.

(Huebner) “The core of the misunderstanding was around the trade value of an old CT and whether cost is gross of that trade-in or net of that trade-in.”

(Dillon) Eventually, the hospital agreed with the state’s position that it needed to get approval. So it’s filed a letter of intent to go through the review process, after the fact.

(Huebner) “It was certainly from our point of view not purposeful. And we’ve certainly cooperated with them fully, and continue to cooperate with them.”

(Dillon)  But the equipment is installed, and it’s being advertised and used. What happens if the state rejects the hospital’s request?

(Huebner) “I don’t know. I hope that doesn’t happen.”

 (Dillon) State law gives the Department of Banking, Insurance, Securities and Health Care Administration authority to levy fines against an institution that violates the certificate of need statute.

But Jeanne Keller, a health policy analyst in Burlington, said the Rutland case raises questions about whether the state has enough resources to oversee hospitals.

(Keller) “I think the state has to come to grips with whether or not we want to actually regulate hospitals, because we have a system on the books but nowhere near enough people to carry it out.”

(Dillon) Keller says Vermonters spend more on hospital care than they do on utility bills. But she says state government has far more people regulating utilities than hospitals.

For VPR News, I’m John Dillon in Montpelier.

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