MIDDLEBURY — The Green Mountain Care Board has OK’d Porter Hospital’s request for a fiscal year 2014 budget of $69,809,477.
That spending requires a 1.4-percent increase in net revenues and a 6-percent bump in gross charges.
The budget provides further evidence of a substantial turnaround in Porter Hospital’s financial health, falls well below the state’s recommended 3-percent revenue cap, and will not force any job cuts, hospital officials said.
“We were able to accomplish the turnaround and meet the bottom line while meeting our targets,” said Porter Hospital spokesman Ron Hallman.
The proposed budget allows Porter Hospital to comply with all of its bond obligations and reflects major progress on its ongoing $7 million project to digitize its medical records.
Hospital officials are pleased with where the institution’s finances are now compared to a year ago.
In September 2012 Porter Hospital reported an operating loss of $6.1 million. But Porter officials are projecting a $200,000 operating gain by the Sept. 30 end of the hospital’s current fiscal year. Porter’s projected operating gain for fiscal year 2014 is $700,000.
The operating loss of $6.1 million, according to Hallman, occurred through over-estimating the projected volume of patients, as well as the financial impact of rolling out the new electronic medical records system.
“Those were the two big drivers,” he said.
During the past year, Porter Hospital made changes within its administrative staff and took a new look at its finances. It proved a successful exercise, given the institution’s stated progress in meeting some key budgetary markers prescribed by the state.
For example, the state requires that hospitals maintain at least 55 days of cash on hand. Porter had 41 days’ worth on Sept. 30, 2012, compared to 61 today. Hospitals are expected to preserve a debt service coverage ratio of at least 1.5 percent. Porter’s ratio a year ago was 0.99 percent, compared to 4.1 percent today.
Porter hired an independent auditor to do an analysis of its electronic records system project, which indicates the hospital is on track to spend around $100,000 less on the project than the $7.1 million the state had authorized, Hallman said.
 “I think that what we are realizing is that there is going to be an ongoing need for us to look at every possible opportunity when it presents itself to consolidate services and become more efficient, to do things differently than we have done in the past,” Hallman said.
The approved 2014 budget reflects those efforts, Hallman said, specifically noting the creation of a single, campus-wide, support services department with a single maintenance operation. Historically, Porter Hospital and Helen Porter Health Care and Rehabilitation have operated separate support services departments.
“We can’t continue to just grow,” Hallman said. “With limited resources and tighter budgets, we’re in a business where we are going to have to constantly look at doing the same amount (of services) or more, with less. It is fair to say that when we have opportunities to be more efficient, and to consolidate in smart ways that doesn’t impact patient care or safety, we need to look at these things.”
Porter has requested — and been granted — a 6-percent increase in gross charges that will be applied to all departments, though there will be no change in laboratory prices.
Al Gobeille, chairman of the Green Mountain Care Board, said he was impressed with Porter’s budget.
“I would say that the board was very pleased with the work that (Porter Hospital President) Jim Daily and his team have done,” Gobeille said during a phone interview on Wednesday. “Jim is a leader in building his primary care network and in health reform. That’s what came across in his testimony … We did not have an issue with anything he presented.”
Daily said he and his team went in to the Green Mountain Care Board meeting prepared.
“We worked with (the board) a lot to make sure there were no surprises,” Daily said. “I think the budget was as well received as we could have ever imagined.”
Gobeille and his colleagues were also impressed with hospital budgets statewide.
Growth in Vermont’s hospital budgets will be lower in the coming year than in at least the past 15 years, according to the Green Mountain Care Board. All told, revenue from patient care at Vermont’s 14 hospitals is budgeted to rise by 2.7 percent in fiscal year 2014, which begins Oct. 1.
“This is an important milestone: It brings hospital budget growth more in line with the rest of our economy, it should help hold down health insurance premiums, and it demonstrates the kind of cooperation we need to make our health system affordable,” Gobeille said through a press release. “We’re grateful to the people who run our hospitals for rolling up their sleeves and doing the hard work to exceed our expectations.”
Reporter John Flowers is at [email protected].