COVID-19 turning anticipated surplus into deficit at Porter Medical Center
“As we were able to increase access to all services, we planned for patients’ pattern of health care use to gradually return to ‘normal.’ At Porter, patient utilization has not yet returned to pre-COVID levels … As a result, financial performance has continued to be challenging.”
— Porter Medical Center President Tom Thompson
MIDDLEBURY — Porter Medical Center President Tom Thompson is asking his managers to be frugal during the coming months in an effort to reduce a budget deficit produced in part by the COVID-19 pandemic.
In a recent email to the PMC community, Thompson noted the organization has seen a $93,000 loss during the first four months of fiscal year 2021. By contrast, Porter officials had been counting on a $413,000 gain at this point
He attributed the red ink to the fact that some potential patients continue to postpone medical care out of concern over the coronavirus.
As was the case with hospitals throughout most of the country, Porter suspended elective medical procedures for several weeks during the height of the pandemic last year. Officials gradually restored those services following guidance from the U.S. Centers for Disease Control, Vermont Department of Health, and the implementation of new safety and hygiene protocols on Porter’s South Street campus in Middlebury.
Porter Medical Center includes the county’s hospital, Helen Porter Rehabilitation & Nursing, and a dozen affiliated provider practices.
“As we were able to increase access to all services, we planned for patients’ pattern of health care use to gradually return to ‘normal,’” Thompson said. “At Porter, patient utilization has not yet returned to pre-COVID levels. This experience is similar to what we are seeing within the (University of Vermont) Health Network and across the country. As a result, financial performance has continued to be challenging.”
Declining patient visits to health care providers during the pandemic has been a national trend. Based upon data from a February 2021 National Hospital Flash Report by Kaufman Hall, Emergency Department visits are down nationally by 25%, and hospital discharges are down 18%. During various points throughout the pandemic, patient visits in some areas of the UVM Health Network have been down by up to 25%, according to network officials.
Locally, while several of Porter’s services — including inpatient care, outpatient surgery — are at or above planned levels, other services — such as Emergency Department visits, clinic activity and patronage at the ExpressCare service — continue to see fewer patients than expected. Also, Helen Porter’s post-acute care census continues to be limited due to ongoing threat of COVID-19, as current regulations place limits on new patient admissions, according to Thompson.
The difference between PMC’s four-month FY2021 loss of $93,000 and its projected gain of $413,000 adds up to a $506,000 negative swing. And Thompson noted the news could have been much worse had PMC not benefitted from almost $2 million in federal grants.
Porter’s financial situation is mirrored by other affiliates of UVM health network.
The network has collectively logged a $21.3 million loss during FY2021, which began Oct. 1, 2020. In spite of relief payments, including $39.1 million from state and federal CARES Act funding, the network missed its budget target by more than $28 million at the end of its January reporting period.
During the same time period, margin targets — the funds left over after expenses which Porter uses to invest in the sustainability and improvement of its operations — weren’t met, as a result of the network’s financial performance, noted UVM Health Network CEO Dr. John R. Brumsted.
Achieving margin goals is critical to a health care organization’s mission to respond to the needs of its patients and communities, added Brumsted, who anticipates additional federal funding will stem some of the network’s losses.
“The strong financial support we’ve received from federal and state leaders is helping us weather this storm, and we are grateful for this support,” he said.
Federal support was critical in mitigating some the COVID damage to the network’s FY2020 budget, according to Brumsted. But the final ledger reading still weren’t great.
“Despite proactive cost-saving measures totaling more than $52 million and significant payments from state and federal CARES Act funding, the network ended the last fiscal year with a $16.3 million operating loss,” he said.
Meanwhile, Porter Medical Center experienced an operating loss of $343,343 during FY2020. But thanks to COVID relief grants, PMC’s total net from operations ended up at $3.9 million to close out last fiscal year, “which was more in line with what we had anticipated prior to the COVID pandemic,” said Ron Hallman, Porter’s vice president for Communications and Engagement.
President Biden signed into law a new $1.9 trillion COVID relief package on Thursday. Porter is not counting on any specific funds coming from this package.
“I do not believe that we have a clear line of sight at this time whether or not we will be eligible for any further COVID relief funds,” Hallman said.
Thompson called PMC’s current financial problem “not insurmountable,” and officials are urging fiscal restraint.
“We are asking everyone to work together to affect positive change,” Thompson told his staff. “Whether it is by finding new ways to increase access, or reducing costs through evaluating and reducing overtime use and non-essential spending. We can also use your help reaching out to friends and neighbors to communicate that it is important to not defer routine healthcare. Porter remains a safe place to receive care.”
It appears jobs are safe at this point.
“In terms of this year, there are no current plans or conversations about adjusting staffing in direct response to the current financial performance, but Porter always evaluates all open positions and vacancies on an ongoing basis regardless of our current financial performance in order to operate as efficiently and cost-effectively as possible while providing excellent care,” Hallman said.
Reporter John Flowers is at firstname.lastname@example.org.
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