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Porter Hospital tightens fiscal year '13 budget

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Posted on September 24, 2012 |
By John Flowers



jimdaly1220.jpg
PORTER MEDICAL CENTER President James Daily, shown talking with a doctor at the hospital, says Porter will cut $465,930 from proposed spending without affecting patient care. Addison Independent file photo/Trent Campbell

MIDDLEBURY — After state regulators recently OK’d Porter Medical Center’s proposed fiscal year 2013 budget with conditions, Porter officials said the hospital will meet the state’s request to cut $465,930 from its $69 million spending plan, and it will do it in a manner that does not affect direct patient services.

The Green Mountain Care Board (GMCB) on Sept. 13 announced its rulings on spending plans pitched by the each of the state’s 14 hospitals. Porter was one of three hospitals to earn conditional approval for its budget; the others were Copley Hospital in Morrisville and Rutland Regional Medical Center. The GMCB ruled that Porter must cut proposed spending in order to comply with a system-wide “target” increase of 3.75 percent for net patient revenues for hospitals, with additional allowances for certain “exemptions.”

One of the most significant exemptions was hospital acquisition of private physician practices. The GMCB allowed other exemptions to push revenues above the 3.75 percent limit if the additional revenues resulted from changes in state or federal government policies, such as an increase in Vermont’s “provider tax” on hospitals or capital projects that already have been approved through the state Certificate of Need process. The GMCB also allowed for certain investments in health reform that the board determined would result in savings to Vermonters over the next several years.

Porter’s proposed increase in net patient revenues was 4.2 percent.

Porter Hospital has been making some substantial investments in its operation in recent months, including making the transition to electronic records and replacing — as well as adding to — its network of primary physicians to respond to recent retirements, departures and a demand for services from patients. Porter’s network of primary care physicians has been unable to accept new patients due to current workloads. That is now changing.

Porter President James Daily said the Middlebury hospital is responding to the GMCB’s request by cutting a total of $466,500 in expenses, including:

•  A delay in the hiring of a physician who was to be on board at the Little City Family Practice next month. As it turns out, that physician is waiting for U.S. immigration permission to work here (a so-called “Green Card”)  to be able to come stateside to join the practice. She is not expected to start in January, as was previously hoped.

•  A delay in the hiring of a physician due to join Porter Internal Medicine. That physician, who will be coming out of residency, will now not begin until April of 2013.

•  Postponement in the filling of some vacant positions in the medical records, business office and technology departments.

Also helping Porter’s bottom line is recent news that its general insurance renewal is pegged to come in around $100,000 less than budgeted, Daily noted.

“This is non-painful, and essentially a restatement of budget assumptions to reflect more information we have now,” Daily said.

Statewide, the Green Mountain Care Board rulings on hospital budgets govern $2.1 billion in hospital and physician service revenue in Vermont. Under the rulings, net patient revenue at Vermont’s 14 hospitals will increase 5.84 percent for the 2013 fiscal year that begins Oct. 1, after adjusting for “budget neutral” changes related to closing of the Vermont State Hospital and for physician practices that were acquired with little if any cost to the state’s health system as a whole. The range in spending changes allowed at individual hospitals runs from a decrease of 0.22 percent at North Country Hospital in Newport to an increase of 10.01 percent at Porter. Excluding all exemptions, Porter’s increase is 3.75 percent, in line with most other Vermont hospitals.

The GMCB decisions allow hospitals to add a total of $141.5 million in net patient revenue in 2013.

Vermont’s health reform law, Act 48, charges the GMCB with controlling the rate of growth in health care costs and improving the health of Vermonters. The GMCB approves hospital budgets, major health care capital investments, health insurer rates, all-payer rates for all providers, minimum health benefit requirements and plans for Vermont’s health care workforce and health information technology.

Reporter John Flowers is at johnf@addisonindepend

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