BRATTLEBORO-State regulators will delay a decision on a proposed budget for the financially ailing Brattleboro Memorial Hospital after the southeastern Vermont healthcare hub filed its plan late and with last-minute changes — including a surprise reprieve for its set-to-close birthing center.
At a Sept. 14 online hearing, Vermont’s Green Mountain Care Board adopted fiscal year 2027 budgets for other general acute-care hospitals in the state.
But members level-funded Brattleboro until they could meet again later this fall.
“What we’re asking for here is Brattleboro to come back with a resubmission with further clarification,” care board member David Murman said.
The hospital, now operating on a $130 million annual budget, has forecast a $7.1 million deficit for the 2027 fiscal year that begins Oct. 1.
That would follow a $33.6 million operating loss from fiscal years 2017 through 2025 and an estimated $9.5 million shortfall for the current fiscal year, the hospital reported in a state filing.
Acting hospital administrators have blamed the most recent deficit spending on past administrative and accounting problems. Regulators, in turn, have said that “the Brattleboro community is suffering the consequences” — most recently through a summer of uncertainty over the future of the hospital’s money-losing birthing center.
In July, hospital leaders said they would close the unit by Dec. 31 if they couldn’t find a long-term way to cover an estimated annual unit loss of $4.8 million — half of the hospital’s projected overall 2026 shortfall.
Leaders went on to decline a suggestion of a municipal subsidy after public backlash and instead have supported a call from clinicians to raise Medicaid obstetric reimbursement rates — a concept the state Agency of Human Services is now reviewing.
Then, in a surprise reversal last week, leaders said they would retain the birthing center through a combination of “operational efficiencies,” changes in staffing, a projected rise in births, a yet-to-be-reported amount of money from Vermont’s Rural Health Transformation Program, and talks with state and federal officials about payment reform.
At its Sept. 14 meeting, the care board gave the hospital permission to raise its multiple commercial insurance reimbursement rates for perinatal, obstetric, and associated pediatric services to 350% of the Medicare base figures.
“This alone will not save the birthing center,” care board member Sara Teachout said in support of the hike. “But it is an acknowledgment that if they want to try and save it, they could increase the rates for commercial payers.”
The Vermont Office of the Health Care Advocate — an independent nonprofit arm of Vermont Legal Aid — has pushed for the birthing center to stay open. Any closure, it wrote in a recent letter to the state, would leave southern Vermont “with little to no option for having a child safely, affordably and locally.”
The nearest maternity care alternative is a half hour east at Cheshire Medical Center in Keene, New Hampshire.
The advocate’s office also has asked regulators to appoint an independent observer to more closely monitor the hospital’s finances as allowed under state law.
The 61-bed hospital has operated with acting administrators since former President Christopher Dougherty exited without explanation in November and former Chief Financial Officer Laura Bruno departed amid similar silence in December.
In a recent report to regulators, acting administrators said consultants had discovered “significant deficiencies” in the hospital’s financial systems.
Those, in turn, led to “unhelpful and inaccurate in most cases” accounting assessments and the need to deplete reserves of cash, investments, and unrestricted assets from $53.3 million in fiscal year 2021 to a projected $19.7 million for 2027.
The deficit spending also has decreased the hospital’s “days cash on hand,” which is an estimate of how many days it could stay open if it didn’t reap any outside revenue and had to cover expenses strictly with its reserves.
Regulators consider a figure of 205 days or more to be “very strong” and one of 80 days or less to be “highly vulnerable.” The hospital has seen its number decrease from 220 days in fiscal year 2021 to about 60 days this summer, according to its state filing.
The healthcare advocate’s office cited those numbers in seeking an independent observer.
“The board and the public still lack a complete accounting of what happened at [the hospital] over the last several years,” the advocate’s office wrote in a letter.
“An outside reviewer,” it continued, “would supply the accounting that [the hospital’s] own records cannot presently provide. It would help ensure that [the hospital’s] recent progress is material and durable.”
State regulators took no action on that request.
To cut costs, the hospital — one of Brattleboro’s three largest employers — has used attrition and the layoffs of at least 15 administrators and support staffers to reduce its number of employees from 528 full-time equivalents in the current budget to 457 in the coming one.
Even with such measures, the hospital is projecting a seventh consecutive year of deficit spending in fiscal year 2027 and doesn’t anticipate breaking even on an overall annual budget until fiscal year 2028 at the earliest.
This is the second year the state has asked Brattleboro to resubmit its budget.
“I think that makes sense,” care board Chair Owen Foster said Monday, “given all the changes and some of the inconsistencies we’ve seen.”
This story was republished with permission from VTDigger, which offers its reporting at no cost to local news organizations through its Community News Sharing Project. To support this work, please visit vtdigger.org/donate.
This News item by Kevin O'Connor originally appeared in VTDigger and was republished in The Commons with permission.