Porter floats a flat fiscal year 2021 budget
We’re really on a break right now, when it comes to capital spending, in order to maintain cash flows.
— Porter CFO Jennifer Bertrand
MIDDLEBURY — Porter Hospital is asking the Green Mountain Care Board (GMCB) to green-light a fiscal year 2021 budget of $92.3 million to cover its expenses, an increase of $2.1 million compared to this year’s spending plan.
Porter, which sustained major revenue hits this year from the COVID-19 pandemic, is also seeking permission for a 2.7% increase in net revenues — around $2.3 million — in order to deliver health care to Addison County residents next year.
If approved, the budget won’t result in an increase in inpatient or outpatient fees next year, according to the Middlebury hospital’s presentation to the GMCB.
Porter officials recently submitted their request as part of a larger fiscal year 2021 spending plan offered by the University of Vermont Health Network (UVMHN). Porter Medical Center has been affiliated with UVMHN since May 2017. The network is an association of eight health care organizations in Vermont and Northern New York, including Porter, UVM Medical Center and Central Vermont Medical Center, among others.
Jennifer Bertrand, Porter’s chief financial officer, told the Independent on Monday the hospital’s budget ask includes no new initiatives or programs.
“This year, we took an approach of really trying to maintain our current core services,” she said.
It’s a spending plan that looks beyond COVID-19, which created financial setbacks this spring for hospitals throughout the state and nation. Porter suspended all elective procedures to prepare for a wave of local COVID patients that fortunately never came. During the heart of the pandemic, the hospital reduced hours for both medical and non-medical staff, and reassigned staff to other areas as needed for screening, testing and anticipated coronavirus “surge” activities.
Porter received a combined total of more than $10.8 million in federal and state coronavirus relief funds to help recover from its financial setbacks from March to June, according to UVMHN records. During that same period, Porter ceased all customary bill collection efforts; outstanding patient balances were not forwarded to collection agencies, nor were patients contacted or solicited for payment via phone or email.
The latest figures show 9,634 patients currently have bills in collections.
Officials estimated UVMHN’s Vermont affiliates would have lost a combined total of $115 million in revenues in FY 2020 due to the COVID-19 pandemic, had no action been taken. That anticipated loss has been whittled down to $6.1 million, thanks to federal stimulus funds, belt tightening, and an uptick in patients.
Currently, Porter is back to 95% of its normal staffing levels. The hospital hasn’t laid off anyone thus far during the pandemic. The 2021 budget proposal includes a cost of living adjustment for the entire workforce, and what officials termed as “a market adjustment for physician salaries.”
Porter Medical Center — which includes the hospital, Helen Porter Nursing & Rehabilitation and around a dozen affiliated physicians’ offices — currently employs around 800 full- and part-time workers.
While Bertrand and her colleagues want to avoid another COVID-related financial setback, she noted there’s no way to predict how the virus might evolve or expand during the coming months.
“There’s too much unknown with COVID,” she said. “We didn’t incorporate any kind of assumptions around what (patient) volumes would look like (with COVID).”
Instead, hospital officials built a budget based on what Bertrand described as “guiding principles”: A commitment to a “patient-centered, mission-driven approach”; investing in initiatives that sustain high-quality care; and ensuring “appropriate stewardship of resources.”
“We also want to ensure we can adequately reinvest every year as much as possible in our workforce, some of the population health initiatives that we have, and capital,” she added.
The UVMHN next fiscal year wants to dedicate roughly $2.5 million for Porter Hospital capital improvements, largely associated with new medical equipment and tech projects. PMC is currently being outfitted with a sophisticated “Epic’ electronic medical records system. The budget request doesn’t include resources for a new medical office building that PMC has been seeking since it affiliated with UVMHN.
Bertrand explained that given tight finances, it could be a while before Porter lands a new office building.
“It’s a bit further in the future, because of the capital suppressions we’re currently going through,” she said. “We’re really on a break right now, when it comes to capital spending, in order to maintain cash flows.”
Porter’s interim President Tom Thompson is pleased with how the hospital is weathering the COVID storm and looking ahead to a new year.
“The negative impact of COVID-19-related actions on Porter and our health care system was profound,” he said, through a press release. “Through difficult decisions to reduce expenses and incredible efforts to secure special one-time funding, we have been able to navigate this crisis to date, and I truly believe that our FY 2021 budget represents a responsible next step in ensuring that Porter can fulfill our promise of providing local trusted care as part of the UVM Health Network.”
Reporter John Flowers is at [email protected]
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