SVMC struggles with $1.3 million shortfall

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(Host) Bennington’s Southwestern Vermont Medical Center is grappling with an unexpected, $1.3 million shortfall.

The announcement of the budget deficit in March was followed by the resignation of former CEO Harvey Yorke  and the dismissal of the hospital’s chief financial officer.

Since then the situation has led to layoffs, reduced hours, and cutbacks in some programs.

VPR’s Susan Keese reports.

(Keese) The hospital has remained mum on what’s behind the shortfall, which may be well over the $1.3 million initially made public.  Dr. Mark Novotny, the Medical Center’s Interim CEO, says the hospital has laid off staff and cut five million dollars from its budget.

He’s waiting for the results of an independent audit, scheduled for completion at the end of June, to draw final conclusions.

(Novotny) "And until the audit’s done, I don’t know. That’s just the truth."

(Keese) Novotny also would not comment on the departure of the former C.E.O. Novotny did say no evidence of wrongdoing had emerged to date. Instead, he says the shortfall was caused by inaccurate revenue predictions.

(Novotny) "We found ourselves in a very difficult financial situation that turned out to be due to some inaccurate planning. So now we know that we are spending more than we receive each month and bold action was needed to make change."

(Keese) That included laying off  three high-level executives after the departure of Yorke and Chief Financial officer George Brisson. The hospital later eliminated about 60 more employees. Another 30 had their hours cut. Also being cut are a diabetes education program and a primary care practice.

Novotny is an internist who’s been with the hospital for 28 years. He says in these decisions, maintaining patient care remained the first priority.

(Novotny) "We didn’t want to unnecessarily alarm people about the clinical processes here, so that’s been a very important part of my job is to listen to the people on the staff and listen to the community and reassure people that the care is great it was before this happened , it is now and it will be."

(Keese) Bennington Town manager Stuart Hurd says efforts at reassuring the public seem to be succeeding. 

( Hurd ) "There’s no sense of panic that I’ve heard in the community. I mean we feel for the people who’ve been laid off. We understand there are some services that have had to be reduced but that’s happening in a whole host of industries. We feel pretty comfortable that the hospital is stable. They are our largest employer and we think that they will survive this. They‘ll come out fairly whole."

(Keese) The agency that regulates hospitals in Vermont is also watching closely. Christine Oliver of Vermont’s Division for Health Care Administration says Southwestern Vermont Medical Center filed its mandatory budget and utilization update in March, but failed to file the numbers due in May.

Oliver says the hospital has been cooperating with the state. But the financial picture won’t be complete until the audit is finished.

For VPR News, I’m Susan Keese.

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