Vermont Legislature SmartTranscripts:

[Alyssa Black (Chair)]: Good morning everyone. This is House Health Care. Can somebody call Today us in North is Friday, January 16. We have been with us, we're talking about hospitals and hospital budgets this morning. First, I want to offer congratulations to our ranking member, Daisy's. Berbeco, for her stellar bill report today on our first bill that came to the floor.

[Daisy Berbeco (Ranking Member)]: That's the interrogation of the year. Anyways,

[Alyssa Black (Chair)]: we have Matt Sutter in with us. I'm sorry, Matthew. That's all. Matt. We have Matt Sutter in Green Mountain Care Board with us to sort of go through a presentation on hospital budgets and maybe give us some insight into what happened this year and can have a seat.

[Matt Sutter (Green Mountain Care Board staff)]: Thank you folks. Give me one second to get the slides pulled up. Sounds good. Thanks for having me in, folks. I'm going to provide an overview of our budget process. Very, very broadly our history of hospital regulation in Vermont, an overview of how we review budgets and those all the benchmarks that get a lot of attention. Just go over last year's decisions and then talk about next steps. I do want to make this open for not tell you this, but open for conversation. So please stop me at any point. I'm happy to answer questions. So why regulate HOP? I think you've seen this slide before. We've used this in a number of places. Regulate hospital budgets? So hospital spending, it's no surprise. It's a major driver of health care spending in Vermont, and it's increasing. This is showing in the green bars here, 2018, the blue 2022. So you see an increase there. I would put out numbers for 2026. You have to show that I would bet it's a higher concentration in hospitals. I was betting on it still. So this coupled with the fact that we basically have one hospital and one insurer dominating the market in Vermont makes regulation very important. So I promise a very, very short history of the regulation in Vermont. So in 1983, Title eight team established the hospital budget review process to slow rising costs of health care in our state. And also, hospital budgets were reasonable and fair. In 2011, PAC 48 gave Vermont new tools to apply to hospital budget review process designed to manage costs, including the creation of the Green Mountain Care Board. And then in 2012, possible budget oversight was assigned to the Green Mountain Care Board. And then I included Act 68 from last year, which tasked the Green Mountain Care Board with achieving payment reform through reference based pricing. So I will talk a little bit about that at the end, our strategies next year and moving forward. But I know we have a more detailed report due to you following up on Act 68, I want to let our policy team speak in more detail about RBP going forward. So real high level, our budget review process. The board's tasked with establishing hospital budgets that meet the state's statutory objectives. And these objectives are laid out in statute, they broadly relate to increasing access, improving quality, and containing costs in the system. Each year, the board establishes benchmarks for HOPWA to use in developing and preparing budgets and to guide the board in its decision making. Houghton bear the burden of persuading the board that their proposed budget aligns with the state's statutory objectives. And the board also votes on standard budget conditions that apply to all hospitals. Some examples of that might be reporting requirements. So for example, we have in the budget orders, they're required to report their monthly actuals to us. For that exact language, it might be in accordance with how staff wishes to receive it or something like that. But we do have standard budget conditions that apply for hospitals. So time frame wise, this time of year, my team is developing a draft version of guidance to share with our leadership and stakeholders. And that has to be adopted by the March. So in the past, typically how that's worked is it would be staff would work really hard putting together guidance. We would release it at a board meeting, present it to the board. Everyone would go back. We would have a meeting the subsequent week or a couple of weeks later to review any changes, talk about any, just discuss guidance and any changes folks want to see. I think what I tried to do last year was really just move it up a little bit, add an extra meeting in there so we could have a little bit more substantive discussion around guidance. And this year, I think we're going do it even earlier. So what we're really shooting for this year is to have a draft version of guidance by the January published. It wouldn't be presented yet. We want to socialize it, make sure all stakeholders can see an initial draft so that when we come to the first James CB hearing around it, we can have more substantive discussions and everyone's on the same page there. Yeah?

[Daisy Berbeco (Ranking Member)]: Do you see hospitals I'm assuming you don't do any quarterly work. Do you only see this once a year, so you're not watching the monthly budget reports or anything throughout the year?

[Matt Sutter (Green Mountain Care Board staff)]: No, we actually so that's a great question. So in the past, what we have done is received quarterly updates from the hospitals where they would send us a less detailed than we get in the summer, but a reduced budget submission with an income statement, a balance sheet, and update us quarterly. Knowing that the system is I'll use the word crisis. Last year, we changed it to a monthly report. So hospitals now need to report directly in Adaptive, which is our budgeting system in the same format that they give us their initial budget submission, full monthly actuals, P and L, income statement, a balance sheet. And then every quarter, we ask them to provide a narrative explanation of major changes. So the goal here is that we provide more timely updates. We're currently trying to stand up some reporting for this. It'll be I'm happy to come back when we have that ready and discuss it and really socialize what we want to see out of that reporting. I can mention I've spoken to a gentleman down in New Jersey. They stood up at what they call an early warning system down there, where it looks at basically the same metrics that we look at, but just days cash on hand, operating margin. So it's very high level metrics at all their hospitals to keep an eye on solvency issues. So I'd like to do something I don't have anything concrete to discuss right now, but that is something we're actively working on producing.

[Alyssa Black (Chair)]: I think Leslie had a question for you. I come from Windham County, so thank you for this really helpful. So Grey's Cottage, Brattleboro, Springfield. So hospitals on the edge. A couple of years ago, legislators would go to our meetings with these, and they were really frustrated and feeling like some of the reporting was onerous and hard for them to keep up with. So I'm just wondering if you've had an opportunity to work with them and see how that's evolved.

[Matt Sutter (Green Mountain Care Board staff)]: Absolutely. So we've big highlight is we're going to be very intentional about what we ask for from hospitals. In the past, I think it had what I told hospitals, we've been having individual meetings with them. Just get a level set from last year. I'd to learn what we did, hear their perspective. Asking VM to report the same thing that we asked Grace Cottage for everything doesn't always make sense. There's some reporting where it's very important that we receive it from the route from the VMs. Grace Cottage, not as much. Maybe we'll be little more intentional around what we ask. Yeah, that's what I would say. Right now, in guidance, we are talking about having different reporting requirements for different types of hospitals, knowing that it is a burden, a lot of our reporting requirements. And it's important that we receive the information we do, but it is a burden on them. We want to make sure it's worth it.

[Alyssa Black (Chair)]: Yeah, that they learn from it too. I mean, hopefully that's what I'm imagining, that it's just not this one way that there's dynamic sort of interaction.

[Matt Sutter (Green Mountain Care Board staff)]: Yeah, yeah, absolutely. And I told them I'm always an open I want to hear input from hospitals

[Alyssa Black (Chair)]: on how to improve our process. Definitely. Thank you. Are the quarterly or now monthly financials, is that available publicly on the website?

[Matt Sutter (Green Mountain Care Board staff)]: Think it will be. So right now it's submitted through Adaptive. They didn't start reporting and one of my team members is going to correct me. I want to say December might be the first month that we started receiving them. So there's a little bit of delay before we start spinning up the receipt of the actuals. But yeah, it will be.

[Daisy Berbeco (Ranking Member)]: Alright, thanks.

[Matt Sutter (Green Mountain Care Board staff)]: I can't commit to a dashboard or something like that yet, but there will be some public reporting.

[Alyssa Black (Chair)]: It'll be buried somewhere in

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: the labyrinth.

[Matt Sutter (Green Mountain Care Board staff)]: So just wanted to hospital finances are very complicated. And I think we talk about benchmarks and use terms of NPR, net patient revenue, or commercial reimbursement, or operating expenses people generally have an understanding of. I thought maybe it'd be helpful to just really high level go through what a profit and loss statement of hospital looks like in some of these categories. I won't belabor any of these. But the top line there where it says gross revenue, what I like to think of here is these are the charges at the household. This is not actual revenue that they're collecting. This is the charge basically, the chargemaster amount. And below that, have something here. I just group it all. There's deductions. There's different types of deductions. But for simplicity's sake, this is largely think about commercial insurers. You get a bill from the charge master. And then there's some reimbursement, some negotiated deduction off of that amount that insurers pay. So the full charges are reflected there in that gross revenue. Then the deductions off of that are how you get to this net revenue, what the hospital actually receives from the payer. NPR is typically an NPR isn't distinct from other operating revenues since that it's direct hospital patient care revenue. Below that Does

[Alyssa Black (Chair)]: that include the patients or is it just the insurance?

[Matt Sutter (Green Mountain Care Board staff)]: It's anyone. So it could be self pay. It's agnostic as it's being able. It's patient care revenue. FPP or fixed payments for essentially the same purpose. Patient this is also patient care revenue, just delivered in a different way. So for our regulatory purposes, we focus on revenue caps in treating the NPR and FPP as grouped together. And what we'll typically look at is setting we're setting incremental budgets. So in guidance, we would set a growth rate for NPR that we are comfortable with. And then as hospitals submit budgets, we would that against the guidance we set and unjustified adjust their budgets accordingly. I just wanted to highlight where that is in a P and L right there. Below that, you would have other operating revenue that sums up to their total operating revenue. Deduct expenses, get your operating income for the year. Importantly, though, at the bottom here, I want to really be clear that we have been establishing the same benchmarks for all hospitals. I don't think we're going be doing that going forward. Have we

[Alyssa Black (Chair)]: Go back to that. When you come out March 31, particularly you're like 3.5% everybody. This year you're intending to say, Doctor. Loeffler, you get point

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: two percent.

[Daisy Berbeco (Ranking Member)]: Springfield, you

[Alyssa Black (Chair)]: get forty seven percent. So you're gonna do different ones this year?

[Matt Sutter (Green Mountain Care Board staff)]: Yeah. I I can't commit yet to exactly how that'll station be broken up, but it will there will be some different benchmarks for different class or categories.

[Alyssa Black (Chair)]: Looking forward to me.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Now I am too. Yes,

[Alyssa Black (Chair)]: of course.

[Lori Houghton (Member)]: And I'm sorry that I came in late and if you ever said this, but why are you switching that philosophy?

[Matt Sutter (Green Mountain Care Board staff)]: You teed me up perfectly.

[Alyssa Black (Chair)]: Oh, Okay, great. Yeah, thank you.

[Matt Sutter (Green Mountain Care Board staff)]: What do we target through revenue benchmark? What's the goal? We've basically tethered it to all payer model targets. In theory, the idea being that budgets that met this would contain costs in the system. What's actually happened, though, is that NPR has grown much faster. So here, I just took from 2017 actuals, trended forward at 4.2% growth versus the actual growth. But solid lines, the actual dotted line is this is a trend forward. I do want to really quickly mention, though, on this slide, the '25 period is the projections we received in the summer. And the '26 are the submitted budgets, not the approved budget. So very important distinction, especially per Doctor. Lueders overstates some of the increase for '26. You can see there is almost $300,000,000 difference there if you look at 2026 between what hospitals submitted and where we expected them to be growing at 4.2%. Getting to your question, if you break it out by hospital type, it's totally different story. Most of this discrepancy has been at the academic medical center. So we see some difference there between the triple axis hospitals in yellow, the mid sized community hospitals in red. Really, that gap between what we've been targeting has been at the academic medical center. And then if you look at this cumulatively, it becomes more dramatic. So if we look at the area below and above the line, the difference between the 4.2% trend and what actually occurred, this is, since 2017, a massive amount of money we're talking about here, above what we targeted $3 payer models. So different setting the same benchmarks, getting very different outcomes from different types of hospitals. I think it's clear we can't keep doing that.

[Lori Houghton (Member)]: And I think the key is there are different types of hospitals.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Yeah. Doing

[Lori Houghton (Member)]: different things.

[Matt Sutter (Green Mountain Care Board staff)]: Yeah, exactly. And it's not just NPR. We have an operating expense benchmark now. Does it make critical access hospitals are reimbursed very differently than the PBS hospitals or the AMC? Are they want to avoid any unintended consequences of capping their operating expenses. So in these one on one meetings I've been having with hospitals, I want to say it was in Northeastern Vermont. But one of the critical access hospitals told us, look, this might cause us to deflate our depreciation and our expenses because we want to hit your cap. If they deflate their depreciation expense to hit our cap, it might affect how much they get reimbursed by the feds. So we really want to be intentional with our benchmarks. And for stuff like that, be knowledgeable about it so we can adjust for it. I'll say last year, we told them from the outset, provider tax, we're not going to count that against you just in terms of judging your submission against our operating expense benchmark. So really open to hearing more from hospitals and stakeholders about things like that because we are trying to avoid those sorts of unintended consequences. And here's just an example of the decisions we made last year. So you see that column of benchmarks, flat 3% versus the hospital proposed and then we'll ultimately approve. So in aggregate, hospitals came in under our 3% benchmark. But we have to review hospital budgets against this statutory criteria and whatnot. Eventually it came out, effectively what was approved was a 2% rate cut across the board, aggregated across the system. You have to weigh each of these individual decisions against the size of the hospital, effectively a 2% cut just from hospital budgets. Can I go back to that one?

[Alyssa Black (Chair)]: So the first hospital of course is Brattleboro Memorial. Have they had their budget approved? Because haven't they had to come back a

[Matt Sutter (Green Mountain Care Board staff)]: few times? This is kind of nuanced, but I'm happy to talk about it. So Brattleboro, when they came in in the summer, we had if anyone has a chance, we had a hearing on Wednesday where Dave Sandell, their consultant, came in and gave an update to the board about their finances. But we had a number of issues with their filings, where numbers weren't tying out or making sense. We ultimately approved a level funded budget for them. And because of solvency concerns, gave them, if you see that 2.4% that we approved, that's the system average approved once you back out UVM. The reason it's a negative 2% is because of that UVM pulling it down. But the 2.4% is about the system average. We had genuine insolvency concerns at VMAs. Really heads or tails of their submission enough to adjust their NPR, allow more NPR growth. So it's sort of nuanced in the sense that we approved the budget for them at a level fund with a 2.4% rate cap. Their resubmission is below that cap because they haven't inflated revenue projections. So they're still below the cap we established for them. So they don't really need a new budget to be approved so long as they stay beneath the caps the board already established. Is that convoluted and not?

[Alyssa Black (Chair)]: Yeah, I knew that there were problems with their budget and go ahead Leslie. So I'm from that area, so pay attention. They've asked to be exempted from, and I'm not going remember the number, but our price caps for outpatient drugs. What would be the process for that?

[Matt Sutter (Green Mountain Care Board staff)]: Through the board, just on the technical process would be to submit a midyear budget request with increased commercial rate. So I think the way that the statute is worded allows for the board to increase commercial rates if they demonstrate that. Don't quote me on it, there's some

[Alyssa Black (Chair)]: When they make a request.

[Matt Sutter (Green Mountain Care Board staff)]: Yeah, there's some things they need to meet in order to make that request. That's the approach they would have to take, from a technical angle.

[Alyssa Black (Chair)]: They have not made that request. Not yet. But that's what's in the news.

[Matt Sutter (Green Mountain Care Board staff)]: And I will say they submitted a budget this summer without the ASP cap in there. That was one of those concerns we hadn't called out during hearing. They told us they were part of this rural community hospital demonstration that would forgive me for not knowing detail, would reimburse similarly to how a critical access hospital would. And I think they made some inferences there that because of that, the CAA exemption then applied to them, that just is not the case.

[Debra Powers (Member)]: Doctor? Could you go over the University of Vermont Medical Center? I can't make sure it's a tale of it. You'll clean something and then the minus six point something. The hospital understand that.

[Matt Sutter (Green Mountain Care Board staff)]: Yeah, so the hospital proposed increase was 2.4%. We ultimately approved negative 6.4%. So the way mechanically it works is the board has to make a termination on their budget. The board found don't comment on the exact amount. Want to say I'm sure Doctor. Watts will say $95,000,000 NPR cut. $90,000,000.95 total. Dollars 90,000,000 NPR cut all taken from reduced commercial rates. So took that $90,000,000 and basically converted it to what it would have been in terms of a commercial rate reduction and then put that in the budget group. So that negative 6.4% approve would effectively pull $90,000,000 out of their submitted budget to the board.

[Alyssa Black (Chair)]: I promise I did not set it up so that all the seats were taken when Doctor. Loeffler came

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: in. Sorry,

[Lori Houghton (Member)]: can I clarify that? So 90,000,000 off of what they proposed? Or that's what the

[Alyssa Black (Chair)]: Correct.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Okay.

[Matt Sutter (Green Mountain Care Board staff)]: Yeah.

[Lori Houghton (Member)]: So they went up as something, whatever million, and you ultimately went down and the whole thing there is 90,000,000.

[Matt Sutter (Green Mountain Care Board staff)]: And the map with the rate to NPR conversion gets very nuanced and complicated. Yes, thanks. I swear there was a table in there that we've used this slide before, but we were going to show the impact of Act 55.

[Lori Houghton (Member)]: Maybe you have to click again.

[Matt Sutter (Green Mountain Care Board staff)]: So we're going to show and I think Chair Boss has used this slide before, but really just showing how we're in this crisis, how has Vermont responded, have we slowed the revenue growth in the system? So the legislature through ACRO D5, that outpatient drug cap

[Alyssa Black (Chair)]: That's the one I was referring to.

[Matt Sutter (Green Mountain Care Board staff)]: Obviously, you have to use some modeling to quantify it. As best we know, dollars 104,000,000 out of the system. Hospital budget orders, almost $95,000,000 And then hospital budget enforcement from prior year overages on top of that, an additional 32,000,000 gets us about $230,000,000 removed from the system last year from what otherwise would have been in there. So pretty significant impact, especially when you think about the size of the hospital system in Vermont. This is not marginal cuts. What's the feedback from all the hospitals on this? It's tough. And I think they got the message. I think if you see what I'm going go back here for a second. You see a lot of these hospitals, Northwestern I'll get to another slide and show that their margins are not great. They submitted a budget below the proposed cap. Rutland did the same thing. I think a lot of hospitals are getting the message, we just cannot keep paying for stuff on the backs of commercial rate payments in the state. It's just we can't afford it. Hope I answered your question. Yeah, that's good. So we've also I think we've also used this slide a little bit, but just to illustrate this. You see the days cash on hand in that left column. A lot of these hospitals are now under one hundred days. That's vulnerable by basically any measure we can look at. Northwestern is able to absorb some of these operating losses because they've had healthy days cash, but it's dropping rapidly. It's not sustainable long term. So really just wanted to show this is a problem. The Houghton legislature established this year helped reduce some of the commercial burden in the state. But we need a solid, thoughtful system. We can't just keep doing it with rate increases and some of these margin impacts. It's not just revenue feeding into that. There's costs in there too. So it's really like everybody has a role to play in this. And we are, from a lot of popular art, getting that.

[Alyssa Black (Chair)]: Go ahead, Leslie. So I'm looking at that slide. And just wondering, what could we learn from Manascotney and North Country? Why are they in such a more stable position than some of the others like Springfield?

[Matt Sutter (Green Mountain Care Board staff)]: So from this slide, wouldn't give enough information on this to definitely say North Country has relatively high rates. Well, North Country has high prices. I think they would come in and justify them due to their location and whatnot. But their cash is going to drop. Madame Scuttony also, they have the advantage of being part of the Dartmouth network. So let me get back to on that. I'll do it better. It'll be

[Alyssa Black (Chair)]: more Just so what you

[Debra Powers (Member)]: can

[Alyssa Black (Chair)]: learn. If something's working, I want to understand that.

[Matt Sutter (Green Mountain Care Board staff)]: I have some ideas. I just don't want to

[Alyssa Black (Chair)]: Yeah, yeah, talk about it. I just make the point that it's important when you put together the previous slide that had the budget order and the increases, that that's an increase on what they currently are at and not all hospitals are at the same. So a 1% increase for one hospital on a high price is going to be a lot more than a 3% increase on a lower priced hospital.

[Matt Sutter (Green Mountain Care Board staff)]: Yes, and if you think

[Alyssa Black (Chair)]: about it very high percentages don't get to money.

[Matt Sutter (Green Mountain Care Board staff)]: Exactly, and if you think about it theoretically, it's going to increase the disparities between hospitals to keep getting them the same growth rates. They're starting from different places. So next steps, Act 68 directed the GMT to implement HUSL reference based pricing through its provider rate setting authority as soon as practicable and not later than HUSL fiscal year 'twenty seven. Hospital fiscal year 'twenty seven, we are actively developing guidance for. So what we're planning to do this year is a transition year to rate setting. Rate setting requires some robust rule making and stakeholder engagement. But to get to this, we're no longer going to have the same benchmarks for all hospitals. The benchmark for price growth reduction is going to factor in existing prices. We will have more to speak about the modeling and analytics there of a product. Think I get ahead of myself, so in a few weeks we'll have a product available to speak to more about how we're going to do that. But the methodology will be very clear. And that's our goal for '27, is really setting different taking into account existing hospital price and trying to reduce what you were just talking about, the continued imbalance there. So that was my presentation. I am happy to talk about Well,

[Alyssa Black (Chair)]: don't say that. I'm happy to talk to

[Matt Sutter (Green Mountain Care Board staff)]: you all.

[Alyssa Black (Chair)]: We have

[Lori Houghton (Member)]: a lot of questions out

[Alyssa Black (Chair)]: there. Questions? I was hoping somebody would ask a question because I had a question, but at the moment I thought about it, I thought it was really important and now I can't remember it. I think it was no, I'm not going to ask that. I

[Matt Sutter (Green Mountain Care Board staff)]: got a question, because I'm just confused. Reference based pricing, is that going to be on services? Is that going to be on charges for CAT scans, MRI? Is it across the whole spectrum? Am not an expert on this. I would much rather have the policy team come to answer this question, but we will absolutely be able speak to that a little better.

[Alyssa Black (Chair)]: I remembered my question, and it's a good one. Wendy, John, Bill, I wanted to get your opinion or maybe even your expertise since you are sort of the hospital budget guy at Green Mountain Care Board. We got a bill on our wall, H-six 41, it's a short form bill. It proposes to require all Vermont hospitals to use the same independent auditor to audit their financial statements as directed by the Green Mountain Care Board in consultation with state auditor. What does that mean? Hospitals use their own independent auditors? What does this mean?

[Matt Sutter (Green Mountain Care Board staff)]: I mean, I would love to hospitals to speak to Allen Voter, but what we receive in terms of audited financials, they contract with a firm that produces them. They're usually major. And they go through the hospital finances and audit them. We receive that audited financials. What I use that for is to reconcile it against what they submit in our adaptive budgeting system. So what the state of Vermont through adaptive or GMC, we ask for is a lot of greater detail than the audited financials provide. But there can be accounting differences between how different auditors look at things. I think the goal probably would be to make sure that the reporting is done consistently across all the hospitals, so they're comparable. Beyond that, I'd to think a little bit more about the Bill Franklin opinion audit. Would it be that the

[Alyssa Black (Chair)]: board would choose the independent auditor and that would be the independent auditor that does all the hospitals? So you're getting it all in the same format and same

[Matt Sutter (Green Mountain Care Board staff)]: Well, it's just very hard. What I'm hearing, how I would imagine it working is, I don't know who would hire them, we'd probably say we'd have some way to RFP or something to audit all the hospital financials. And then it would be very similar to how we receive it now, just to be one firm doing it for all the hospitals instead of A consistent A mix. Okay.

[Alyssa Black (Chair)]: Could I follow-up on

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: that? Go ahead.

[Alyssa Black (Chair)]: So could many auditors, mean, hospital now has that auditor, still be required to use the same format, not necessarily the same auditor, and get the same benefit?

[Matt Sutter (Green Mountain Care Board staff)]: That is a good question. I'd like to think on it a little bit more. I'm not an auditor, so I'd

[Alyssa Black (Chair)]: like to Neither am I,

[Matt Sutter (Green Mountain Care Board staff)]: but at a high level I mean, what

[Debra Powers (Member)]: do you say?

[Alyssa Black (Chair)]: The idea is format. So that looking at what the object is.

[Matt Sutter (Green Mountain Care Board staff)]: It's format, but then there's, I'm doing a little over my wheelhouse, I think there can be some genuine differences in accounting principles that aren't wrong, just different. So I think maybe that's some of the intent.

[Alyssa Black (Chair)]: Another question, Commissioner Sampson was in here from GFR the other day and GFR, of course, is sort of tasked with insurer solvency, you're tasked with rate payers and hospital solvency. I know that you receive information from DFR when you're doing your insurance rate review, and I know you're here on hospitals, but is that information taken into account?

[Matt Sutter (Green Mountain Care Board staff)]: Yeah, it is. I have to confess, I have been largely not involved with the rape review process, so I think we can have that team come in and speak a little bit better. Okay.

[Alyssa Black (Chair)]: Any other questions? Thanks for the great presentation. Yeah, very helpful.

[Debra Powers (Member)]: So I stopped sharing.

[Alyssa Black (Chair)]: Next we're joined by Doctor. Loeffler. In his new role. We would invite him in, in his brand new role.

[Matt Sutter (Green Mountain Care Board staff)]: Congratulations.

[Alyssa Black (Chair)]: And since we were talking about hospital budgets, kind of level set. Okay. Great.

[Debra Powers (Member)]: All right. Go ahead and start?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Yeah, go ahead. Great. So thank you, madam chair, members of the committee. So everyone does know me, my name is Steve Leffler. I'm almost a lifelong Vermonter. I was gone for three years from my residency training. I came back to Vermont in 1993, and I've been back at UVM in multiple different roles since 1993, the longest I've been. I'm an emergency medicine doctor at the medical center for more than thirty years. I went to undergrad at UVM and medical school, and I received a master's of healthcare delivery and administration from Dartmouth in 2016. I stepped into the interim role in September during a period of intense challenge for UVM Medical Center, and honestly for healthcare statewide. When I assumed the interim role on September 15, it was very clear to me that we were off track. We were not actually delivering on our mission, which is to serve our patients, our communities, and our state. My first priority as I took over was to stabilize leadership and really refocus the organization on service. We made a number of immediate leadership changes, and we actually restored some power to the local boards, giving local boards of all the hospitals in Vermont, but across the system as well, rights to vote on their budgets and approve their budgets, CONs. And we put the chair of every local hospital board on the network board, which was a thing that was missing and causing the network board to not always know what was really going on in the community. So I think that's gonna be actually the most powerful difference. We have a much stronger community voice on the network board now. We already experienced that once in December, and it makes the board meeting much richer and I think much more valuable. Another critical reset that's really important to me is how we show up, How we engage with our partners, our regulators, and our legislators. Going forward, we're gonna show up that we are always here in service to our patients and communities. We're gonna show up humble. We're gonna show up, we're gonna listen, we're gonna own it when we make mistakes, and we're gonna collaborate. I'm a collaborator to my core. I want you to know that I've committed that expectation throughout the organization. If anyone, you see any member from UVM Health showing up and not showing up in that way, I wanna know about it, because we're gonna show up different. Please know that which I really hope you take away from today from me is that I wanna be collaborative. I am accountable for UVM Health across the two states, and I'm committed to rebuilding trust that I know we've lost through actions and not words. I wanna share some good news. It was challenging. We worked all the way through the holidays between, late December and January, but we did commit complete our Blue Cross contract this year. I think that's really important. They have a new leader as well. We've been talking regularly, Beth Roberts and I. We were on the phone, I think, twice this week already. And I appreciate the Green Mountain Care Board data you just saw, but overall rate reduction for UVM Medical Center, counting the legislative actions last year for the infusion bills, is a 12% overall commercial rate reduction for UVM Medical Center, an 8.5% reduction for CVMC, and Porter's a 0.3% reduction. Overall, if you impact the full all actions taken last year. The next step, and now the really hard work, is aligning our expense base with our lower revenue. And we're very focused on that right now, working hard to get our expenses down to meet those changes. And doing that while protecting quality, improving access, and really I see the work that all of us did together last year between the legislative action, the Green Non Care Board, us helping take in make a down payment on trying to make health care more affordable in Vermont, but I know we're not done. I do wanna thank Mike Smith and the liaison team. They've actually been invaluable partners in both our commercial rate negotiations and our expense review at the medical center. I talked to Mike regularly, I talked to him this week, and he's been very helpful and thoughtful, and I appreciate their input. We have already launched a number of cost reduction initiatives. It won't be enough, and we're gonna have to do more. Key example that you know well, we have to figure out how to break even on infusion services. And for some infusions, that's easier than others, but we are very focused on that right now. It's complex work, it's challenging, it takes time to align payments, operations, where you're doing it in clinical practice. What's ordered, how is it ordered, where are you delivering it, how often, all matters. As I've already said, we know that the introductions last started last year are a good down payment, but it won't be enough for Vermont, and and we're focused on moving forward. Much much of what we're focused on right now is looking to the future, looking to what reference based pricing would look like for us, and looking to global budgets, which I know is just another couple years out. I want you to hear that we are committed to being a major contributor to Vas's goal of removing an additional $100,000,000 from the system over the next few years. Our focus right now is really on three big areas, I hope you're gonna answer me every time I come to see you. Number one is quality. We at UVM Medical Center has been a five star CMS institution in the past. We're not a five star institution right now based on CMS data, and we're gonna get back to five stars, the whole system is gonna get to five stars. There's work to do there, and there's a lot of lag in that data. But we have more current data internally. CMS is looking at it, but it doesn't actually show up in the ratings for a long time. But I'm confident that we are better today than what our CMS star rating will look like this year. Second, We know we have big access challenges. We're very aware of that. I want you to know I'm an academic medical center board for the whole United States. There's about 40 of us on it. Every academic medical center in the country has some access challenges. But in many places, the academic medical center is one of three, five, seven hospitals in that city or system. In Vermont, every hospital is the only one in CHSA. If you can't get the service here and you can't travel, it's a huge problem. We're hard at work right now with the medical group on multiple different ways to try and improve access. And most importantly, and I've been there more than thirty years, I've never heard this as one of our parties before, it's affordability. How can we bring down or slow down the growth of cost of healthcare on everything we do? And when my team is in here, can ask them in every meeting I'm going to now, I'm like, what will this do to rate payers? How does this work for Blue Cross? How can't what are the things we can do to make this cheaper? It's really hard, it's but gonna be one of our major focuses. We're trying to set some longer term goals for ourselves. So over the next five years, we wanna be CMS five stars at all sites at UVM Health. Wanna be able to break even on as many Medicare DRGs as we possibly can, which is a big push for us right now. And we'd like our primary and specialty care wait times to be below the national average.

[Alyssa Black (Chair)]: Can I interrupt you? Please. Real quick. So I'm certain that your quality, access, affordability, historically, what do you think led to sort of CMS rating down your quality? Clearly, if you're working on it, you've probably identified what wasn't working. So I'm just historically, what do you think it was?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Yeah. So I would say the biggest thing was the pandemic. And everyone's gonna tell you the same story, it was the pandemic. But in the pandemic, we lost a lot of very senior people who were able to retire. A lot of our per diem staff and part timers that had been there for a huge amount of time, had huge institutional memory, could train our new learners, retired. During the pandemic, we were focused on many different things we don't normally do. Vaccinating Vermont, 100,000 vaccinations, testing Vermont, constantly opening and closing services, making our periope an overflow of space for COVID, then it wasn't, then it's the ICU, then it's not. Twenty five percent of our nursing workforce was travelers in the pandemic. And I'm grateful that we had the travelers because they kept us all cared for. But travelers are never gonna meet your quality standards in the same way as local people that are there all the time. We changed orientation to become remote. We we down we we shortened up some things. And our workforce is less experienced now than it was in 2019. That's the truth. And we have to train them at the bedside. And so this started becoming clearer to us at the medical center about eighteen months ago, when we went from five to four. Problem is it takes a long time to get to five, takes a long time to fall off five. So all through the pandemic, we're still five, which is kind of amazing. And so we're not putting honestly the focus in that we should have. I think it would have been challenging anyway. And so one of the biggest differences we have right now is we have leadership rounds on every floor, every single week. Every floor has their data up, and we're increasing the scrutiny on when we make a mistake, how can we do better? We're setting, I don't wanna call them crazy goals, but I've been telling everyone, I wanna see zero falls, zero health care infections or conditions, zero pressure ulcers, because you're not going for zero, then you're gonna be okay if you get 10 and that's average. So it's hard. It's hard work and it takes a long time and it's a slog. I was the chief medical officer at UVM Medical Center when we got to five. What I'll tell you is it takes every single person who works there to be focused on it. Everyone from the CEO to the transporter to the person who's parking your car because CMS five stars grades your overall experience through press scanning surveys. It grades all of the care you receive. So we still have work to do. We're not there yet, though. We will be.

[Alyssa Black (Chair)]: Same question, access. Where discreetly are there access issues that you've identified that are particularly And what do you

[Matt Sutter (Green Mountain Care Board staff)]: think is leading to the access issues?

[Alyssa Black (Chair)]: Is it productivity? Is it So

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: here's the challenge with access. So we'll notice that we have a problem, let's say with MRI. So we wanna make sure that you see your doctor and your doctor's concerned you have cancer and they wanna order a, it's called a 3T MRI, a very fancy, highly specialized MRI to help diagnose if you have cancer, the stage of it and what the next steps are. So I think up until about 2023, there was one 3T MRI in the state of Vermont at UVM Medical Center. We were running it from about twenty hours a day, Okay? And we started having the wait times get too long for you to get that imaging in time that made sense for you. So we went to the Green Mountain Care Board. I'm forever grateful. They understood the need. They approved a second. And for a little while, we were looking really good. We were doing it in a week. And we're doing almost twice the number of three T MRIs now that we're doing in '19 and the backlog is still going up. So more people are needing the imaging, more people are showing up. And I could give you examples.

[Debra Powers (Member)]: Why? What about age?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Our monitors are getting older, they need more testing. More people requiring the really good imaging. I totally get that. If my family member was coming in today, I'd want the 3T MRI for them. And so I could give you examples of colonoscopies where we do all this work to catch up, and then the demand is just always running a little in front of us. It feels like we're chasing the dog and we just never quite catch the tail. Every time we get there, the demand is increasing. I'll talk about that more in a second. I do have some thoughts for some of it. But I will tell you that one of our big access challenges is our demand is increasing for almost everything. We added almost 3,000 new primary care spots across UVM Vermont side in 2025, and we still have wait time for primary care. It's demand. Let me get back. So Oh, sorry. Coming back. Please.

[Alyssa Black (Chair)]: I'm thinking about staffing. So how do you adequately staff your units in order to do get you know, did you lose stars because of lack of staffing? And how do you get back to that reasonable and appropriate staffing level?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: I think it was in 2018, I'm pretty sure that's right. We entered into a staffing collaborative with our nursing union, and now we have it for our tech unions and so on. So we have safe staffing initiatives and goals that we meet. And it's really not lack of staffing. If you look way over 90% of the time, we meet our staffing initiatives that we've agreed to with the union. I would say it's more who the staff are, and we have great staff. I'm not saying that. They're younger and less experienced. So the trick is, our staff, excuse me, is a little less experienced, newer grads earlier in their careers, and our patients are sicker. If you look at what's at UVM Medical Center right now for acuity, for that back half of '25, it's as high as it's ever been. Our acuity is extremely high right now. And so you're asking people who are gaining good experience, who are very strong, who are great nurses, but to take care of really sick people, people that were sicker than they were before the pandemic, honestly.

[Alyssa Black (Chair)]: So do you have programs to try to bring staff in? Yeah, how does that work? Lots of training.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: So we're constantly training our staff. We're constantly doing, and all of our nurses have education hours built into their yearly salary. We have mandatories, we have impromptu training, we have nursing governance is doing a lot of training. So, but right now actually the program that we're doing most is called back to basics. How do you manage a patient that has a Foley catheter? How do you manage emulation with people? We're seeing opportunities at the basic level to make a real difference. So we're very focused on that right now.

[Alyssa Black (Chair)]: Karen, did you have a question?

[Brian Cina (Member)]: You just referenced Q and E and I just wanted to know what that is.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: I'm sorry? Acuity. Acuity, oh, how's it going?

[Alyssa Black (Chair)]: Q and

[Matt Sutter (Green Mountain Care Board staff)]: E, thought

[Brian Cina (Member)]: you said cute.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Oh, I'm sorry.

[Alyssa Black (Chair)]: That's an acronym I haven't heard. Got it. Thank you. Thank you. Alright. I interrupted you.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: I love the conversation. So

[Alyssa Black (Chair)]: the five star, does that affect your Medicare reimbursement?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: It does. It does. That's not the reason to do it, but it does.

[Brian Cina (Member)]: No, no, it's

[Alyssa Black (Chair)]: Well, it is a good reason to do that.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: It's part of the Yeah, mean, we should do it because all of us deserve to have five star care when we need care. So the goals we set for five years, all three of them are hard and really challenging, but I know that pushing us towards those is the only way to get close. As I've already said, this is the first time in my thirty plus years that affordability has been one of our pillars of focus. I think we covered some of this. You guys asked me good questions. I do want you to know, and we've already sort of hit on this, that expense reductions alone is not gonna get Vermont where it needs to be on healthcare affordability. It's just not. We have to keep Vermonters a little bit healthier. We really do. We have to bring a utilization down. And you should know that for the first time ever in our Blue Cross Blue Shield contract, we have some metrics in it for this year's contract around utilization targets, number of ED visits, keeping people healthier, doing good screenings. Hopefully, some people need a little less care. One less CT MRI will matter. Finally have a population health team that is really ready to do this work. So I was part of building One Care, and there was many good things about One Care, there was many challenging things about One Care, the vision was good. But I can tell you that the payment model was in front of the delivery system. The delivery system wasn't totally structured for how to keep people as healthy as possible, which is the only way you can make those models work. We have that now. We really do have a population organization. We're doing work with UVM, the College of UVM. And our early data shows that we're keeping UVM employees healthier. They need less ER visits. They're needing some less other things. We're helping them with access to primary care and so on. So we have to focus on how to keep Remodulin healthier, which is how you say less utilization. We're also extremely focused on physician recruitment. We've already added 80 new providers, I think it's since September. That's a really good thing. We're losing some providers to retirement. Then also in academic medicine, you're always gonna have some people that move on. I've been extremely fortunate that my career looks like it's gonna begin and end at UVM. I'm very fortunate for that. But many people have a great opportunity to go somewhere else, and we actually celebrate them. That's part of the academic mission. You should always be trying to grow in in different ways in your career. So what we have added 80, and our we lose about 10% of our positions a year, we will be definitely significantly net positive for '25, '26. So looking forward, Vermont is clearly entering a time of profound change and challenge for all of healthcare, not just UVM Medical Center, not just UVM Health. The whole state, all of our hospitals right now have huge pressures. I say this constantly, we are stronger together as a system. I'm really proud of the work that Vermont did around the pandemic. Because in the pandemic, we all worked together. We all showed up together. We all actually listened to each other. We all did the right thing for our neighbors. The hospitals didn't just think about themselves. We shared masks. We shared testing results when we need to. We shared everything that we had to try and keep everyone safe. I think it's what we have to do now on a different challenge. Unfortunately, it won't end like the pandemic, because I think affordability is gonna keep us going forward, but we are stronger when we work together. That's both UVM Health, but that's both Boston and all the hospitals in the state of Vermont. My vision going forward is UVM Health wants to support all Vermont health entities, not just UVM Health. We wanna deliver the highest quality care we possibly can in every instance in the most affordable care setting, even if it requires partnering with new partners to figure out ways to do that. We wanna ensure that patients can move seamlessly from within the system. That's getting easier because we have a single electronic medical record, a single radiology system, but also outside the system. As an ER doctor, I can tell you, if someone gets really good care tonight at St. Johnsbury and gets transferred to us and they show up in the ED and I don't have their CAT scan images when they get there, I'm gonna order another one. It's terrible. I shouldn't do it. I need it now. I wanna see the results. I wanna look at the scan myself. I don't have it. It's hard to say even if what this says looks right to not get another one. We have to have a system where that flows seamlessly through the system. Really important. We have to be able to do this to have all of our hospitalists sustainable. Please hear this from me here. UVM Medical Center cannot take care of everyone in Vermont. We are full every day right now. Every single day, we're at capacity or very close. We can't provide all specialty care in the state of Vermont. We have to figure out how to bring specialty care out to our smaller hospitals for certain problems so people can stay there in those communities. That'll be good for those hospitals, really good for those patients, but we need it too. We're at 95% occupancy every day. Almost every day this week, it was finally better this morning, we've had more than 10 people waiting in our ED for beds upstairs, which is a huge problem.

[Alyssa Black (Chair)]: Diane, out there? Please. I remember, vividly remember last year when you were doing a joint hearing with, I don't remember what committee it was, you gave an alarming number, percentage of people boarding in the inpatient level of care that didn't need to be inpatient. How is that going?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Quite a bit better.

[Alyssa Black (Chair)]: Okay.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Quite a bit better. So at the peak of the pandemic first off, we had to go let's go before the pandemic. Before the pandemic, we had 30 people in the hospital. So almost a floor worth of patients boarding, waiting for discharge. We freaked out. 30. At the peak of the pandemic, it was 80 all the time, sometimes 90.

[Alyssa Black (Chair)]: And remember, you're not getting paid for them.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: For a single, and there's people waiting for those beds. Yeah. So I'm be the doctor for a second. Not only we're not getting paid, but there's people waiting for those beds. Since the pandemic, we've worked really hard with our nursing homes. Our nursing homes are all doing a little bit better. And so this week has been in the 30 range. They'll sometimes get up to 38 or 39, that'll immediately cause ED borders. We get it back down under 30. I'm not saying it's smooth sailing, but it's pretty good for us. We were in the twenties for some days in December. So it's not perfect, but we're most of the time pretty close to pre pandemic levels of boarders who are waiting for their next level of care.

[Alyssa Black (Chair)]: Great, go

[Daisy Berbeco (Ranking Member)]: ahead. How about the mental health care that's needed that had a lot of boarders back

[Alyssa Black (Chair)]: in the is that still?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Please hear this from me. Radical retreat is doing a really great job. They have great leadership. They've really turned this around. Once again, thirty year ER doctor. I can tell you that for the last, not the last couple years, the last twelve or thirteen years, If you had someone come into the UVM Medical Center ED on a Thursday, they need inpatient mental healthcare that we couldn't provide upstairs, had to go to Brattleboro, it was Thursday, after 11:59 in the morning, They were not going. We were lucky they were on Monday. We just knew it. We had them for the weekend. They have totally turned that around. They are doing great. Good. They see we have someone, they're calling us. We can take them today, send them down. We have a bed, even Friday afternoons. And and I'm not I'm it's amazing. So much better. They have good leadership. They're doing good work.

[Lori Houghton (Member)]: Sorry. Just a quick follow-up on that. And so transportation has gotten better as well. Is that credible memorial? Is that you all said?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Pitching in on that. Memorial. And we a good program.

[Alyssa Black (Chair)]: Okay.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: So we have a a transport program that we're putting some money into. I think they're putting some money into. Somebody else who do that, and I can't remember. But there's a three way model where we're putting up some dollars. It's a good investment for us because not being in the ED from Thursday at 11:59 till Monday, paying for that transport's a good deal.

[Lori Houghton (Member)]: And then mental health urgent care?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Working really well. And so I was curious to see how it was gonna do. And the very first day we were setting it up, someone said, well, just think about it. This is the person who's gonna come in three days before they show up in your ER. They're gonna come in on Tuesday, get some treatment, maybe come back on Wednesday or Thursday, because they can come each day, and we're gonna manage their problems so they don't end up in the ED on Thursday at three. It really seems like that's working. Right. You should know a lot of students are using it. It works really well for students. Good. It's been very successful. Okay. And it is helping keep our numbers down. So our mental health orders is markedly better.

[Daisy Berbeco (Ranking Member)]: Glad to hear. Can I expand?

[Alyssa Black (Chair)]: Not necessarily your mental health orders that we tend to think of in the ED, I believe some of your borders on the inpatient with co occurring that you didn't have skilled nursing facilities that could take people, that was an issue around some of your inpatient.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: If you're elderly and you need nursing home care, and you have any problem bigger than we fixed your hip and you need help walking, if you have geriatric behavioral health issues, if you have obesity, if you need a really expensive medication, if you have any comorbidity that makes you a challenge to take care of for, that's very challenging for nursing homes, very challenging.

[Alyssa Black (Chair)]: Leslie, I'll wait till you finish, since you're

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Okay, I don't

[Alyssa Black (Chair)]: I have two questions, but I

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: We can do whatever.

[Alyssa Black (Chair)]: Keep going.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Up? Okay. So kind of that vision I just laid out sounds deceptively simple. Like, well, of course, that's what you should be doing. Operationally, it's really challenging, really hard. But that is what I took this role for. That's why I'm here. That's what I'm committed to. I want you to hear this for my last comment. We are ready to partner in this work with all of our communities, our regulator, our legislators, other community hospitals. We're already starting to do work right now with St. Johnsbury, with Newport, with Gifford in new ways to partner with them and make sure that some of that care can stay local in those communities. That will be good for those hospitals. Thank you so much. I am convinced that we can do this. We did it through the pandemic. I personally think Vermont had the best response in The United States, some place I would even say the world. And it's hard, what we're gonna have to do. Really challenging, and there's gonna be some things that are very difficult, but we're here for it. I'm here for it. Thank you.

[Debra Powers (Member)]: Okay. Thanks for coming in. Very lovely, thank you. Thank you. Do you have some kind of a operational governing board within the hospital?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: So every hospital in Vermont, including the three Vermont hospitals that are part of UVM Health, all have a governance board. I'm not sure that's what you're asking me.

[Debra Powers (Member)]: Well, you answered that part, they have a governing board. So we

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: have a governance board that we present. We have four governance meetings for UVM Medical Center every year. I'm still the president of UVM Medical Center. I attend that board with my board chair, who's now Ali Richards, who's Jesse Bridges last year. And four times a year, we present operational data, quality, safety, access, budget updates, everything that's going on. And for two years, the UVM Medical Center Board did not approve our budgets, we've returned that power, it was voted, we started the work in September, it was voted on in December.

[Debra Powers (Member)]: That's one. Now, the reason I asked that question is, do you have a representative of the nursing group and the entire hospital system on that board? It's tricky to have nurses who are in

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: the union be fully on your board, but we have Noam Anderson, who's the dean of nursing for UVM on the board. Our CNO at UVM Medical Center, Peg Gagne, attends every meeting. And so no, the simple answer is we do not have floor nurse on the board, but we do have nursing leadership that attends, and Noam Anderson, who's the dean of nursing for UVM is on our board.

[Debra Powers (Member)]: Just a personal opinion, I know Dartmouth had a nurse on the board because it was my daughter. Congratulations. And it makes a huge difference in terms of

[Matt Sutter (Green Mountain Care Board staff)]: the

[Debra Powers (Member)]: workforce that you have there. They do a lot of work in the hospital, tremendous amount.

[Matt Sutter (Green Mountain Care Board staff)]: I agree. And

[Debra Powers (Member)]: I just think every hospital should have a representative of the nurses right on their board because they can tell you what's going on on the floor. I agree. So that's just Thank you. Sense.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: We do have nursing governance. They don't sit on the board, but I appreciate what you said, we can look into that. Thank you.

[Alyssa Black (Chair)]: Since Debra asked a board question, and I know other people have questions, but I might as well ask now, I think there's a bill in the Senate where the governor gets to appoint two board members for every hospital. How do you feel about that?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: You know what mean? Our community is already on our board. We would look at that. I don't have a strong opinion one way or the other. I'm very confident that the three Vermont hospital boards have very strong community representation, very invested, we have great board members. I'm assuming it would be similar people that we already have sitting on our boards.

[Daisy Berbeco (Ranking Member)]: Daisy, you have a question? Welcome, I'm glad that you're in your new role. Thank you. Can you give us any sort of assurances that compensation is going to be performance based and also take into account some of the affordability pressures that taxpayers and patients are facing?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Yeah, I'm assuming you're talking about at the leadership levels, I'm assuming. We have a compensation philosophy for UVM Health, And at the highest levels, we have a compensation committee that has looks at data for the hospitals, looks at national data, and does our best to try and manage against national benchmarks and the realities of Vermont. And so I'm confident we have a good system in place to work through that. And that board has taken some actions this year. There's no incentive comp in '25. There's no incentive comp in '26. Bonuses, you might say, are not part of that. And they're reevaluating going forward. If we would do that, if we would, how we can work with the Green Mountain Care Board who has some guidelines on what that would look like right now. They're an engaged group. They're very connected and trying to balance on that. So I'm confident in that team. They're they're well and once again, it's mostly our community board members that are on there.

[Daisy Berbeco (Ranking Member)]: Is that a new team?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: It changes. It changes over time. So I'm trying to think if there's some there are some new members on there. But the philosophy changed in '25 around some issues of how we're doing things. And I think they're doing their best to manage between the pressure of what the national rates for many jobs look like and what works in Vermont.

[Alyssa Black (Chair)]: Guys keep asking asking great questions, which lead me to follow-up from bills on our wall. I believe representative McFaun has a bill on our wall, h five eighty five, and I think I remember seeing there's a piece in it around DFR and transparency in hospital provider compensation? Or is it insurer compensation? I'm getting the insurance companies in the hospitals all mixed up. Never mind. Never mind, I won't ask you about it.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Never need to answer it. I would need help. I'm not prepared to answer.

[Alyssa Black (Chair)]: Okay. Never mind. Any other

[Daisy Berbeco (Ranking Member)]: I think Leslie was raised.

[Alyssa Black (Chair)]: Leslie? Thank you, and thank you for this. I'm not sure if you're willing to share your testimony, but it would be helpful for if you're okay with that, that would There's be a bill on our wall about facility fees, and I'm wondering what your thoughts might be about how it would impact the

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: So I'm not ready to give real testimony because I haven't seen the full impact yet. Want I you to know it will have a major impact on hospitals and revenue. And so I want you to know that any bill that you're considering this year will come with an open mind. We'll try and figure it out and understand how we could meet the demands of that bill, what would be the impact. But there already is a lot going on right now that was taken out of hospital revenues last year. We're still trying to operationalize all that for the medical center between our Green Mountain Care Board orders, the infusion bill, some and other action is 160,000,000 to $170,000,000 of revenue out. And so I'd love to see us have an opportunity to work through that, digest it all, and make that work before other big things. So we will come with an open mind, we'll carefully look and evaluate it. We're gonna have to get more affordable. Somehow I understand that. I will say that one of the tricks with site neutrality is different sites have different cost infrastructure. Care that gets delivered at an academic medical center, you have a twenty four seven emergency department, a NICU, you have specialists on call, you have level one trauma, that's different than some other sites. And you have to figure out how to cover that expense somehow. But I don't want go any further than that right now. I want to come with an open my our team will come with an open mind and try to understand how that could work.

[Alyssa Black (Chair)]: Thank you. I'm also wondering, as a result of all this that you've been through in the last year, what your relationship has. Has it changed with the New York hospitals? And can you speak to that?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Thank you. So the most important thing I want you to hear from me is that UVM Medical Center needs New York patients. It's critically important for some of our high end specialty services, the NICU, trauma care, heart surgery, oncology, neurosurgery. There's not enough Vermonters who need that care for us to have the full services that we have. We need people from New York, that Upstate Region, to come and keep those services busy and full. And I've heard before people say, well, if they're not part of your system, that care will still come. I strongly disagree with that. We know right now, Albany would love to have all of that care. Rochester would love to have lots of that care. If that care, so if CBPH wasn't part of our system since Champlain Valley Physicians Hospital, and all that tertiary care was leaving, wasn't coming west or east to UVM Medical Center, that'd have a major impact on those services. Either they cost more because we'd be delivering it to less people, or there wouldn't be enough care. We wouldn't have the amazing doctors, nurses, specialists that we have to do that care. So academic medical center needs those patients to come. Also, equally important, a strong Champlain Valley Physicians Hospital can keep people in Plattsburgh that are able to stay there, that need to get care there. If all of those people are coming to Burlington, that's the opposite problem. Then we would all have trouble getting in and be over full. My vision looking forward, we need every hospital in the system in UVM Health to be sustainable. We're making great progress in New York on that. We're adding a lot of specialty care over there, so people can stay in New York when it's appropriate. And for some things right now, access is improving to the point in Plattsburgh where some people from Vermont are choosing to go to there. We're not asking them to go to it, but they could go there for certain things, with some specialty care that's been added. So the solution to the question you're asking is to make those hospitals be able to stand on their own. We're not quite there yet, but we're making great progress.

[Alyssa Black (Chair)]: So we, if I may I wanna ask a follow-up. Yeah, I guess there was a concern about debt, and what the relationship was to UVM, and who was responsible for the debt occurred in New York?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: So, when UVM Health was brought together, ultimately now we're all a single obligated group. So the debt of any one site is the debt of every site, Kind of like your family, kind of like being married if you have one checkbook. Theoretically, I mean, I'm gonna be keep it simple because I'm a doctor. We have one checkbook. So through the pandemic, there were dollars that were flowing to New York to keep those hospitals running. It's less now. It's not zero yet. It needs to be zero. We're very focused on that. And here's what I don't wanna do. I don't wanna come and testify to you six times telling you why it's important that we have Plattsburgh patients coming to us. I want make Plattsburgh sustainable, and we're focused on that, and we will get there.

[Debra Powers (Member)]: Thank you.

[Alyssa Black (Chair)]: Just want to follow-up a little bit on something that you said. So you were talking about, it's important because they help sustain services so that Vermonters can have those services because you don't have the volume. But if we take out the volume, I because I saw numbers the other day, Albany Medical Center, their cost of care is so much lower than the University of Vermont Medical Center. Why are they able to provide that care at a much lower cost of care than we can't? Really is the core question. Why is it so expensive for us to provide care here? And if we don't have the volume, maybe we shouldn't have the care here.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: I do think we should have the care here. As a lifetime person, as part of our academic medical center, think we're so lucky to have UVM Medical Center in Burlington, so we can all get care of when we need it. I've gotten care of my mother, my father, my brother, both my granddaughters were born there. We have every day I see people whose babies were in the NICU. Not having that here would be a huge issue. It's not gonna be an economic driver for Burlington, Chittenden County. I'm not prepared today to compare us to Albany. Just don't have Albany's data in my head. It's a fair question. Working hard on things like that. We're happy to come back, but I would not be able to answer in detail today the differences. I'm sure it's complex and we'd have to look at a lot of different pieces, but we could potentially come back and show you more data. What I can tell you is we're focused on getting cheaper and closer to Albany.

[Daisy Berbeco (Ranking Member)]: Yeah, go ahead, Daisy. I really want to understand, and you don't have to answer it today, but I think it's a very important issue, given what we're trying to do overall with health care reform and affordability. Why would you not choose those services that we can't sustain with our own residents? Why would you not choose those as the ones to cut? Simply don't understand. I realize it's a business decision, and there's a lot of factors that go into it. But at some point, I really think it's worth understanding because I think that's really key and especially in the coming couple of years, it's going to be something that the public needs to understand.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: For our academic medical center, we didn't have the ones I named: NICU, heart surgery, neurosurgery, maybe level one trauma. All of us will need those services. We'd have to travel very far. Our families have to travel very far. I'm not gonna miss Albany has capacity for all of us to go there when they need us. So some of us would have to go farther. Some of us could, but some of us couldn't. We don't have good transportation. And if you suddenly start eating away at those services, you're not an academic medical center. You're a big community hospital. And one of the things that I lay awake at night most worried about is keep cutting us a little bit at a time. I'm not saying you. We keep eliminating one service that's doing this. We stopped doing transplants, is a good example, which was something we needed to stop. Okay? You don't do transplants, it changes who you get for nephrology fellows. It changes who comes for general surgery. It starts to make you Now those doctors can't get that training when there's residents. You start to lose those services, your medical school becomes smaller. You start getting less people wanting to pick those programs. So I hope that the care we deliver is good for all of us when we need it. I've been very grateful that my family could get the care they needed in Burlington. I've been very proud of the care that we get in Burlington. And I think it's amazing that Vermont can have a medical school. I think I've seen some data, I might be off the list a little bit. I think about 20 to 30% of our residents stay in Vermont. They're not staying here without training here and loving how great it is to go skiing at Stowe or go to Bolton on a night skiing thing, or have some outreach programs at different small hospitals. And lots of them say aren't just at UVM Medical Center, they're staying across the state. They're going to Newport, they're going to Brattleboro. And those doctors are staying in Vermont. I don't think we have that without an academic medical center. So I hear you that it's investment to have those services. Me personally, to my core, I think it's worth it. We should make the investment have to be smaller, and I'm working on that. But I think it's critical.

[Daisy Berbeco (Ranking Member)]: Thank you. That is so helpful to to understand.

[Alyssa Black (Chair)]: Oh, I have Lori and then Karen.

[Lori Houghton (Member)]: First, I just wanna say I appreciate the sincerity that is here. We have missed that for the last couple of years. And I am, as I've said to you before, glad that you're in this role. So one of the things I was struck at over the last couple of years was the number of operation nonclinical people that you've had at the hospital, specifically in quality care and not providing the care, but analyzing the quality care and in the prior authorization billingworld. Just curious if there's been any movement on how to make that more efficient and less costly.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Lots of work going on right now. Not quite done. Don't wanna talk about all of it, but we are very focused on trying to have as many people, I always say, we need a lot more doers, people at the bedside, people delivering care, helping to keep the care safe, and less people leaders. And so that's a big focus of mine. Lots more coming.

[Brian Cina (Member)]: Hi, it's Cina. To Topper's point, you said it was tricky to have, you know, floor nurse or whatever on the board. I don't know. I just quickly looked

[Alyssa Black (Chair)]: at this board, this

[Brian Cina (Member)]: doctor's and that there

[Alyssa Black (Chair)]: are other hospitals without a

[Brian Cina (Member)]: voice, I haven't researched all of them. But it does seem like that voice is extremely important perspective to have in all of this work. I don't need you to do I'm just, anyways, if there's, I know where that question's going other than hopefully there's a way to get that voice on the boards.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Heard you. Jane Canton's also on our board, who's a nurse. Yeah. Yeah. But I understand what the where the question's from. We will work on it.

[Brian Cina (Member)]: And then the other thing was the presentation at Porter and the interface between the two hospitals in New York, Porter. And I know you're all part of the same network, but that was sort of delineated as having some success in terms of sharing leadership roles and sharing costs and having access so that you wouldn't have to have so many backup people and so forth. Is there anything to learn from that little three hospital system that's applicable larger? And is there anything worth mentioning?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Yeah. So I actually think Porter, Elizabethtown, Ticonderoga, so Porter's in Middlebury. Elizabethtown's right straight across the bridge. Ticonderoga's little bit south. It's probably the best example we have of how well it can work when you truly do really integrate. They share one president for all three hospitals, one chief medical officer, they share one chief nursing officer. They have an operations person on the Elizabethtown side. They share providers seamlessly and beautifully. So you might see a GYN doctor, might have Daisy Middlebury on Mondays and Wednesdays, might be in E Town on Thursdays. They have seamless flow of imaging. So if you need a mammogram, you can call and maybe Porter can't see till next week. Elizabethtown could

[Debra Powers (Member)]: see you

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: tomorrow. They have really been able to manage the overhead leadership cost structure. Elizabethtown and Porter, both critical access hospitals. Elizabethtown was able to get an investment from the state of New York and some federal dollars, has a beautiful facility. Actually, really nice ER. Nice to know Porter's. We're working on that. So jealous. Yeah. I was joking when I was down at Porter rounding that in Room 1, I was there with a broken arm in 1976, and it looks the same.

[Alyssa Black (Chair)]: Oh, no. Oh. Yeah. So

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: I think, and we've invited the Green Mountain Care Board to go and show what that looks like. I think that's an amazing, amazingly well run tripart system. It delivers really good care to people in that region and maintains access. There's good access at all three sites for many primary care issues. They're doing a good job.

[Matt Sutter (Green Mountain Care Board staff)]: You.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Maybe do a road trip.

[Matt Sutter (Green Mountain Care Board staff)]: Questions? I

[Alyssa Black (Chair)]: guess I had sort of three questions. I had so many questions. So when the budget orders came down, how'd you respond?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: This year? This year.

[Alyssa Black (Chair)]: Because it was an enormous amount of money you had to pull out of your budget.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: It made me, I'm an ER doctor. It made me worried, and then I said, okay, this is our budget order, we have to live with this. And the very next morning I went and said, okay, how are we doing it? So we started putting stuff together around how we could live within that budget.

[Alyssa Black (Chair)]: If you achieve your budget and are able to maintain some sort of positive revenue, What would happen if they did that again? Yeah.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: So I wanna say that over the long term, to really invest in what we need, the finance people are always gonna tell you, need 3% margin. They've got it in my head. We need 3% margin to be able to have current modern facilities, keep up with our MRI equipment, keep up with all the stuff that we need. We're gonna be able to get good care of them when we need it. That requires 3% over time. You can go under it for a year, hopefully somebody will make it up a little bit. We changed our margin for this year down to one. Making 1% margin this year will be very challenging. It's a huge, huge test of our team to do that, but we're focused on it. So there's reason, so much being hopeful and optimistic that we can do that, but it's gonna take some work. We committed in 2026 to have no impact on patient care services. We know what happened in '25. We don't wanna go through that again. The doctor in me never wants to cut a patient service ever. I wanna grow more services. I wanna do more things. If we got another 160 plus million out of our revenue stream for twenty seven's budget, we'd have to look at what we are able to do. And I'm not threatening care, I'm saying we have to look at what is our total scope of work and where is our opportunity to drive those dollars out. It's hard. Our expenses are going up. The revenue that is approved right now by the Green Mountain Care Board for '26 is less than we brought in at '24. So that's a real challenge. Please don't think I'm complaining, because I'm not complaining. We are going to figure it out this year. If they did it again, I'd probably lay awake two nights instead of one. I'd go in and say, okay, what can we do to preserve the care we're delivering? We're trying to increase care. We're trying to improve access. We're trying to bring on more doctors and nurse practitioners and open up clinic schedules. Under decreasing revenue, that's hard to do. Medicare revenue's fixed, Medicaid revenue's fixed. I think there's ways things we could do around those revenue streams that would help some. And for Blue Cross, I really hope for '27, we have a valued budget with them. I'd love it to exclude us from Green Mountain Care oversight, but that may be a dream. I thought I might throw that in. Know, I just thought I'd,

[Alyssa Black (Chair)]: know Throw that in. Yeah.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: But we're working on that. And that's really keeping people healthier. So we work to do it. That's the answer.

[Alyssa Black (Chair)]: I just I was thinking about this when Matt was presenting. They had their orders from last year, they removed a certain amount of money from the sit down. We are still the highest priced, highest premium rates, highest commercial rates in the world. And my thought was, and this is not aimed at you and it's not aimed at UVM, it's aimed at the entire system. And it's really more of a statement that if we are going to ever achieve affordability, there's only so much we can do around waste or trimming back budgets, we are going to lose services. And the hope is that we will be thoughtful and we will make the right decisions over what services are done where for the best quality results at the lowest cost of care, which is sort of to the Albany point. Although I'm not saying we ship everybody down to Albany, but this is hard and it's going be hard for everybody. And we may not get everything we want.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Yeah, so at my core, I'm an academic physician, and if you're an academic physician, means your whole life all you do is compare data, you compare yourself to others, how good am I doing, how good is my emergency department doing, How is my hospital doing? That's all you do all the time. I will tell you that I think Vermont right now, it takes a couple of years to digest everything that's happened in Vermont, in healthcare spending over the last little time. I'm not gonna tell you that it's still too expensive here. We won't know for a couple of years if we're still the most expensive in the world. It's gonna take some time for that data to get into the system, to work its way through, to understand the impact of that. I'm gonna go back to the pandemic. When the pandemic started, we didn't know what the bug was. We didn't know how to protect ourselves. We didn't have enough masks. We didn't think we had enough capacity in the system. And we came together and we figured it out. It was really hard, but we brought the right people together every day. Everyone basically rolled up their sleeves. I think there's a sustainable healthcare system in Vermont's future. I do believe part of it's utilization. We have to figure out how older Vermonters are healthier, all of us. We have to be a little healthier. That will save more money than anything else we do. I think in that future, we do have tertiary care services. I think we have an academic medical center. I think the medical group, which is 1,000 doctors, part of UVM Health, is able to see more patients maybe remotely in smaller hospitals, which is a lower cost of care and it's really good for those patients. I think we might not be able to add some fancy buildings and bed capacity over the next ten years, which we'd like, which is probably unrealistic. But I think we can have a sustainable system. I do, I really do. And so I understand, and once again, I'm academic, so comparing ourselves to Albany, so much is going on right now, and I keep seeing data already for what our percentage of Medicare is right now. I don't want to quote myself today because I don't want it to be wrong, but we have some projections that show it's come down a huge amount over the last few years.

[Alyssa Black (Chair)]: Really quick question, only because I forgot to ask Tara Foster, and then Brian, I think online has a question. And then we're gonna end, because we need to end. The settlement agreement, can you just really briefly, the primary care money, has that been distributed?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: The primary care money has went to, I think it went to Vermont Medical Society, and I believe they're distributing it.

[Alyssa Black (Chair)]: We know the Blue Cross money was distributed. What's up with the remaining, I don't know, was it 13,000,000? What is the plan for that?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: There was money put aside and some percentage from 0% to 100% of, think it was 15,000,000, could be used for consultants to help drive down the cost of care at UVM, medical center, health slash, make sure we're as efficient as possible, improve provider productivity. The provider productivity consultant has been hired. They're here. They're here for next six weeks. They'll give us a report. There's another one that's happening around we're not doing the governance one because we fixed governance. There's another one on shared services, I believe, and and how we can be more efficient on shared services, which is sort of what you were getting at. And I believe that one hasn't been signed yet. But you should know that dollars that aren't spent for consultants will go back into the system in some other way, which will work out with the Green Mountain Care Board. So we're not committed to selling them all. There hasn't

[Alyssa Black (Chair)]: been a plan. I was just gonna say, hope you're not spending 13,000,000 for a six week report. No. It's it's

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: a tiny fraction of that.

[Alyssa Black (Chair)]: Brian, real quick question did you have? I'm sorry. I don't have a thing up on our Yeah.

[Brian Cina (Member)]: I know. Those people. And I'm sorry I can't be there in person right now. So we heard the other day about how the artificial intelligence technology is improving the workflow and that's a way to save money. I'm curious if you're aware of other ways that hospitals and health systems can use artificial intelligence in their finance management or budgeting to improve functioning of the organization, and also just predicting numbers and managing resources?

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: Representative Senna, that's a great question. We actually have an artificial intelligence committee right now, looking at all the options out there. There's a million, I might get another one in my inbox every single day. Right now, would say most of our focus at this point has been around some things that help the riders somewhat. So we have a really good one that's helping our providers do their notes. I saw my primary care doctor yesterday, my note was generated from artificial intelligence from our visit. Really amazing. It's saving our doctors lots and lots of time, and allowing them to see more patients per day. We have a really helpful artificial intelligence tool that's helping read mammograms and some x rays. And we're starting to look at using artificial intelligence around rev cycle, around prior authorization, denials. I do think there's gonna be opportunities there. But at least in those areas right now, what we're understanding is still need a person watching it and making sure it's working correctly and it's not overreacting. So I think over the next two or three years, there's gonna be things we can't even imagine yet. We'll have to use them carefully and smartly. So we've set up a committee to make sure that we're trying to do it ethically, and that it makes sense that we don't get unintended consequences. But I think there's big opportunities there for more efficiency on the back end function, which is what I'm hearing you talk about. Where can we figure out ways to do things less expensively? It's coming.

[Brian Cina (Member)]: Thank you, we'll talk more, thank you.

[Alyssa Black (Chair)]: Thank Thank thank you so much for coming in.

[Dr. Stephen (Steve) Leffler (Interim CEO, UVM Health Network; President, UVM Medical Center)]: You so much for having me.

[Matt Sutter (Green Mountain Care Board staff)]: Thank you, good

[Alyssa Black (Chair)]: luck. We really appreciate it.

[Matt Sutter (Green Mountain Care Board staff)]: Appreciate it.

[Alyssa Black (Chair)]: Thank you.