Vermont Legislature SmartTranscripts:

[Chair Alyssa Black]: Welcome everybody. It is January, and we are going back to H five eighty three. I'm following the CPOM bill. And first up, we have Chip Fones from Ovation Healthcare. So, why don't you come out and join us, Chip? Sorry, mister Houghton, we're really informal in this committee, and I hope Chip's okay. Looking forward to your testimony.

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Thank you, chair Black. To the new members, good afternoon good afternoon, everybody. Okay, Brian.

[Chair Alyssa Black]: Yeah. Yes. It's up. Lovely picture.

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Everybody can see that okay?

[Chair Alyssa Black]: Yep.

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Well, it's very nice to be here with you all. Thank you sincerely for this opportunity. My name is Chip Holmes. I am the executive vice president for hospital operations of patient health care. To help guide our time together, Bit of a delay. I was thinking, having had a chance to hear some of the different meetings you've had here, different conversations or questions I received from different people over time, especially recently. Though we could take some time first with a notion of Cornerstone. And when we move through that process, maybe sharing concepts together, maybe developing and sharing language together would be in the cornerstone part of our conversation. I look forward to sharing with you and introducing you to Ovation Healthcare, which has actually been, I've been a member of that family for over thirty years, and I'll explain more as we go. Having heard from different folks and having listened to some of your meetings as well, I'd like to offer some clarification about our relationship with Springfield Hospital. I know there's interest in, I and we know there's interest in private equity in health care, so spend some time there. And also spend some time there as it relates to Ovation Healthcare in private equity. I know that back in December, our colleague David Turner was here talking to you about the New England Collaborative, so I look forward to connecting there as well. And then hopefully, please always stop me, ask questions, but the ability to get to some time where we have open conversation, hopefully, that's valuable to me, not to you. I know it would be valuable to me. And then we'll end with sharing my contact information so you can get me at any time, always. So far, good?

[Chair Alyssa Black]: Great. And Ovation, sort of, or the New England Collaborative, he was referencing our Health Reform Oversight Committee that met in December. We had a presentation from that. Thank you for that. Cornerstone,

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: on behalf of the Ovation family, and we have a legacy in a company that precedes that called Quorum Health Resources, And I've been part of that family for thirty years now. When we are with board members, executive leaders, medical staff leaders, an opportunity to speak with community leaders, we try to build this picture and concept together. That the cornerstone of governance and leadership for community assets that we all call hospitals, sometimes healthcare or health system, but I'll use the word hospital most of the day, begins with the board. Sometimes they're called board trustees, sometimes board of directors, medical staff, think executive medical staff, the whole medical staff, executive leadership. And when those three important areas of governance and leadership are aligned, think like the cornerstone of a solid and sacred building, the ability for the foundation of that organization to be strong and whether anything that might come is probably better off than if that foundation block wasn't laid well. And so when you have governance and leadership all aligned with shared vision, shared strategy, shared tactics in service to community, you're probably off to a good start. And there's no doubt there's a piece of sacred in the imagery here for me personally, and I'll share with that a little bit more as we go along. Every day is sacred. These are the hospitals currently in the New England Collaborative. And so I have no doubt today that I'm going to use language that's personal. I'll try to keep it professional. I know that I'll move between references to the collaborative as well as Ovation Healthcare. But as a connection to you all, and knowing that executive director David Turner, who is from Milton, was here not too long ago. I'll sort of start with a collaborative. Top left corner, that's Adirondack Health in Saranac Lake, New York. Bottom left corner, that's Cottage Hospital, right on the river, Woodsville, New Hampshire. Come across, I think you would recognize Grace Cottage and Townsend. Keep coming across, that's Brattleboro. And then the bottom right corner, Cockley Hospital, Morrisville, Morristown. And then up to the center, you have Gifford and Randolph, Gifford Medical Center, which I think you all know is both critical access hospital, also FQHC, very, very unique structure, few in the country remaining. And then Northwestern Medical Center. And I think maybe a good opportunity for me to maybe open up for you all. That's my hometown hospital. I grew up in Fairfax. My mom's a nurse. My dad's a pediatrician, both now retired. All these years later, I get to serve my hometown hospital. I remember when it was Curbs. I remember when it was St. Albans Hospital and the history of those two organizations coming together to form NMC Northwestern. I said personal and professional, I love what I get to do. I went to school at Holy Angels, Monte Cristi, Rice, and then college in Union in Schenectady. My first real job out of college where I had to wear a tie and try to be professional every day, I was a patient registrar. I did admitting at Ellis Hospital in Schenectady, New York, four forty bed facility. At some point, I got to control patient flow from surgical services to their room. I got to do trauma registrations in the ED. It was wonderful. And so, good or bad, the son of a nurse and a pediatrician, and all I've ever done in my professional career is work in hospital families. And I love what I do. We're continuing with notions of language, connection, a little bit of imagery, reflecting on your guiding principles and some connection here. I'd never seen that sign before or that board, whiteboard. We're talking about community. We're talking about hospital families. And in this conversation, Vermont, but also our connected hospital families in New Hampshire and New York in particular, every one of them is focused on caring for community, social determinants and drivers of health, and health related social needs, and the complexities of providing for your community and making sure you do so as a leader, think governance and leadership, that cornerstone, in a healthy way. And often, frankly, personal professional mist sometimes. Everybody gets that the hospital is there for the healthcare, health of the community. Of course, hospitals, healthcare, emergency departments, primary care. I think everybody in this room appreciates it, but maybe sometimes lost outside of a room like this is the importance and impact that a hospital family has in the economic health of the community they serve. Makes sense. Often the largest employer or one of, often one of the better paying employers' salaries and wages and benefits in comparison to other important parts of the community. And so my career, the family company that I get to work for, these are important constructs for us. We serve hospital families across the country. It's also supported by important organizations across our company country, like the American Hospital Association. And we started with a cornerstone in the importance of governance and leadership, and leaders of the American Hospital Association will say, if what's happening in the boardroom doesn't matter to people outside the boardroom, outside that hospital, then something's not happening right inside that boardroom. This type of conversation is conversations I have with board members of hospitals across the country. I'm responsible, and I get to serve a team of 10 people right now, and we serve 60 hospitals intimately across our country. Of that 60, the great majority are critical access hospitals, think like a Gifford or Springfield or Copley, just to name a few, or smaller community PPS, Prospective Payment System hospitals, like the Northwestern Medical Center. As an ovation, as we are in constant service to governance and leadership, we're and not alone in this important responsibility, but constantly working with board leaders about their fiduciary duties, educating, reminding, helping them with ideas and or connections to other families that might have similar challenges. This reference guide here is our tenth edition. We're actually bringing it out in February in a meeting with a bunch of trustees and directors of hospitals. That book was actually written by a gentleman named Bob Dwyer, who lived in Miss Fiona, New York, the very first edition. He was one of my first bosses. I'll never forget him because he liked to build and race race cars. At Ovation and our legacy company, Horn Health Resources, we believe this. It's also an important legal construct as a board member. You are legally and ethically responsible for everything that happens in that hospital. We're talking about nonprofit community assets. Board members are ultimately responsible, and they don't own it. And when you take on that weight of governance and leadership and appreciate what that means, as I know, board members and hospitals in this state and across the country, it's a serious responsibility that they take full accountability for. Constantly pushing, learning, asking folks like me and my colleagues to have conversations like we've just started off with. They are stewards in stewardship. They are ambassadors. They are role models. And the hospital families that I've had the privilege to serve, I get to serve in our part of the country, that's the type of hospital governing leader that I have had the opportunity to meet, including my hometown hospital. So that brings you, hopefully us together in this conversation with some concepts and language, a little bit where I'm coming from or where ovation is coming from. Okay, if I move into Ovation over. Yes, please. Thank you. No doubt, little bit of branding here, no doubt, a little bit of promotion. When you're not getting a chance to talk with somebody, what to leave behind, this will be an example. What sets us apart? But I'd ask you to look at the two big blocks on the left. Forty nine years of experience, almost five decades. I've been part of the family as I've shared thirty years. We're currently serving 500 hospital families across the country in 47 states. For all five decades, those hospital families that we've served, as I've described, great majority critical access and small community PPS, prospective payment systems, all nonprofits. Community assets, again, we call them hospital. And the responsibilities that board members, medical staff leaders, executive leaders have for the success of that hospital family. Not one of those nonprofit community assets that we call hospital are for loss. They all are looking to make some degree of return so they can reinvest in their important asset called hospital, their people, their technology, their facilities. I remember when Doctor. Used to be in conversations here, and he would say, We need to be making at least one to 3% return on just the operations of our hospital, so we can reinvest in Fletcher Allen. And having Chair Foster recently talk to one to 3% on operations, even though they're nonprofit and we know their tax advantage in different ways, they cannot be for loss. This is a picture. Dots represent hospital families or health care families across the country. This is where we are serving as an ovation. The $90,000,000,000 in NPR net patient revenue, so the amount of money that hospitals bring in to pay for their bills.

[Rep. Leslie Goldman (Member)]: Leslie, did you have a question? Just a clarification, if I may. I thought I heard you say you had 60 hospitals in The US, or was that local?

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Thank you for that question. I said that I am part of a team, we serve 60 hospitals intimately. And so for an image, think circles and circles. Inside these 500, there are 60 hospitals that my team works with really, really close, certainly intimately back to the cornerstone of governance, medical staff, executive leadership. And I'll detail that a little

[Chair Alyssa Black]: bit more in a couple slides. Okay, so what I'm understanding, if I may, that all these dots, because you're saying 500 clients, but it only represents 60 hospitals. No. No, see, I'm not getting it, thank you.

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Thank you. As we go through the next few slides, you'll see that from Ovation, we have different ways of helping a hospital family. So we may have some hospitals here that take or engage with us for a simple consulting engagement. That would be a hospital we serve, and I'll develop that a little bit more for you. And again, thank you for the question. There are 60 hospitals that I, with a team, serve really, really intimately. We serve them with lots of different parts of services we provide. And I'll show you next couple of slides.

[Chair Alyssa Black]: Okay, so the other clients are not hospitals, same.

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: No, they're all hospitals.

[Chair Alyssa Black]: I guess they're all different teams. So how many teams are there then?

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: If I go through the next few slides, maybe I'll you very much. Have my

[Chair Alyssa Black]: Sorry to bother.

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: That's great feedback, because I can always make this slide better.

[Chair Alyssa Black]: I just had a little thing. Curious, because you mentioned how many people are on your teeth servicing 10?

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Yeah, so executive vice president, hospital operations, I work with a team, their titles are group vice president or executive strategic advisor. We deploy and we will have regions or forgive the business conversation, we'll have a book of business. Like I have 20 hospitals that I have connection with Northwestern Medical Center. I serve pretty intimately. And so inside the 500 hospital families that we might be serving on any given day, which might be just one simple consulting engagement, there are 60 that we bring many different services to in a bigger package. And it's a real close, personal, intimate, but also professional relationship. I think this starts to help with the notion of scale or economy of scales, and we'll get to that in a little bit. So from the question types of services we provide in Ovation, in the next couple of slides we'll develop this a little bit more. There's leadership advisory. So I've been a hospital administrator, CEO three different times. I've now had a chance myself to work with 90 different hospitals. Leadership advisory, I'll give you more detail in the next couple of slides. Other ways we help hospitals is around revenue cycle, the billing and the collecting process, and we can help across the full continuum of revenue cycle, or we can help with just pieces and parts of revenue cycle. Spend management, that's really supply chain. But as you watch organizations that work with GPOs or group purchasing organizations, you watch these types of organizations approach hospital families and say, we can help you with more than just supply chain. We can help you with contract labor. So it's supply chain, but I guess to make it sound fancy, we say spend management. Technological services, information technology, we are completely electronic health record agnostic. We work with all the EHRs, all the EMRs, electronic health records, electronic medical records that are out there. And you'll experience different types of EHRs or EMRs based on the size of a facility. But our point is how can we help the hospital family no matter where they are across the country and no matter what is their information technology strength or backbone. And then the core, the foundation of everything we do is about learning and the ability to engage one on one with any person and help them become the next best version of themselves no matter what part of the hospital family they serve, including as board members. So the next couple of slides is a little bit more in detail, and it gets to that point about intimacy and serving the 60 that we were talking about a few minutes ago. Inside leadership advisory, which is the part of Ovation where I have the most, where I spend the most time with that team that I was talking about. Our ability to help, with our ability to help with governance and leadership, ability to help with strategy, our ability to help with clinical excellence, financial operations, workforce, air relations. And then we talked about spend management, which is supply chain and you can see different substruct content there, information technology, technology services, revenue cycle. Be happy to try to answer any questions you might have here. And then the Learning Institute, which is our foundation. I'll give you some detail on that in a second.

[Chair Alyssa Black]: Actually go back to that. Do you provide just consulting on revenue cycle management, or do you actually provide the revenue cycle management?

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Yeah, both. If they outshook both. Yeah, on that question, it depends on what the hospital family asks us to do. Would you please come in and pressure test our revenue cycle? We're wondering if there's a way we can improve our performance. So that would be like an advisory or consulting engagement. Or we're struggling keeping good people and revenue cycle because we're in a smaller community, in a smaller state, not profiling, but were challenged on finding the workforce or the skill set, would you come in and would you employ them on our behalf, like rebatch them? And then give that person the ability to not only serve their hometown hospital, because they become proficient and say, a certain type of billing component, but then they can help other hospitals across the country with that type of specific service. So the answer to your question is we really do both. We can help pieces and parts. We can offer consulting services. We absolutely have hospitals that have come to us and say, please, if you will, take over our revenue cycle, have those employees become Ovation employees, which is actually part of our company, and then serve our hospital, but that also gives people a chance to serve other hospitals and build their own skill set. Same thing for information technology, I could answer the same type of question the same way. Can you give us some sort of consulting advice on how we can improve our cybersecurity and our hardening? Or can you help us with help desk? Or could you take over that service for us? I want to be careful with my language, but then have those folks turn and serve our hospital back. So it's really outsourcing. Thank you for the question. And then the Learning Institute, to that point, what can we do to take that person who might be in revenue cycle or information technology and help them grow their skill set so not only can they serve their hometown hospital, but other hospitals may be in a different part of the country? As we get into that leadership advisory, and it really starts to get to that question of intimate service, we'll have different hospitals ask us to help us with strategy or payer relations or care transformation, or actually consult on their physician services, all of which is done in a supporting role. Compliance, financial services. Happy to detail this as anyone may ask or have questions on. And then the Learning Institute. Learning Institute has been part of our family for fifty years. Again, anything we can do to help an individual grow in their leadership walk, grow in their career field, become the next best version of themselves as they would like possible, that's where success really comes from. And then as a leave behind, because we have the ability to help the hospitals the way we have and because we have that scope across the country, and I mean this really respectfully, but I'm also not making this up. I've had this exact conversation where I'm with a hospital family and they're sharing a challenge. And that challenge is supremely unique, right? It's their challenge. It matters to their hospital family in their community and there's no one like them because they're completely unique. A 150 year old hospital family, nonprofit community asset going through all the challenges that everybody has, and I can say to them, I understand. You're unique, absolutely, and I've seen five of them this week. So how can we take some learnings from other hospitals and help your hospital, and how can we take some of your learnings and help other hospitals that might have the same challenges?

[Chair Alyssa Black]: Go ahead, Daisy. Can you tell me what higher net promoter score?

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Not well. Like a Google five star or a Yelp rating or your ability to say I'm willing to promote that hospital or that service is in that promoter store. I don't understand how the math works, but I know that we have hospitals that, when asked about the services we provide, will give us a five star rating or a higher rating or willing to promote our services. So you want a higher score than that than a lower score. But I don't really perfectly understand that.

[Chair Alyssa Black]: You have on there 12% improvement in reimbursement. Is this another way of saying increased revenue?

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: I think what we're trying to say here is the ability to negotiate good payer contracts with payers, like insurance companies, right? Then monitor the performance that your hospital has, making sure that the payer with an agreement you have in place is honoring that agreement. So making sure the payer is doing what they said they were going to do. And then from the hospital perspective, making sure that your systems work in a way to actually collect bill for correctly and then collect what that agreement was. And so it's all about process. Some of it is yes, negotiating better rates with payers. Also, it's improving the process to bill and collect and then being able to replicate and repeat that and demonstrate that across time. Improvement and reimbursement. And so what we do for a score like this is compare hospital families that are coming into us because maybe they want that intimate service, or maybe they're saying just help us with pieces of our revenue cycle. And we'll say, here's where you were when we started working with you, and here's where you are today, hopefully better. And then when we have a hospital family that we've worked with for a very long time, and we have them, Northwestern Medical Center, which was curbs in St. Albans Hospital before, we've worked together for forty seven years, forty eight years, one of our original legacy facilities. And so not only can we say what their performance was like before we started working with them, but then we're also trying, always trying to see how do we do last year and if there's any way to maintain or improve that in this coming year. Sort of comparing against ourselves, which really in this case is about that hospital's individual performance.

[Chair Alyssa Black]: Oh, pardon me, there's a question.

[Unidentified Committee Member]: Yes, can you tell us how you are reimbursed for all of this work that you do? Where does the money come from?

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Hospitals liking the service that we provide for them, and then wanting to keep us around and keep paying us. So if our service isn't good, they say we don't need you anymore. If they say our service is good, they say, could we engage you for another engagement, another service, or renew our current contract with you? Everything we do is on satisfying the hospital client customer because we have a contract for service with them. And if they don't like what we do, they terminate us. If they want to keep us around, hopefully our service is good enough, better than good, to bring a value to them that is more than the investment that they're making with us. So everything we do is, here's the engagement, here's the service we're going to provide, here's the cost for that service, that service has a contracted length of time, and hopefully we do such a good job that they wanna keep us around and keep paying us.

[Unidentified Committee Member]: So just to follow-up on that, so is the contract based on like some kind of percentage of improvement that you make with the hospital?

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: We have, from time to time, had risk contracts, where we will go at risk, we think we can improve your performance a certain amount, and if we can achieve that, then the hospital benefits and we can enjoy some of that benefit. But when we go there, the truth is we get lots of questions about that at some point. Somebody's going to change, somebody's going to have a disagreement, somebody's going to say that you have an ulterior motive. So the more that we can keep this very transactional, you're asking for a certain service, we provide that service, here's the charge for that service. It's got a limited amount of time, and it has performance standards if we don't live up to the service that we said we'd provide you. At some point, if we're not doing a good job, you say, thank you, we're going to go find somebody else. Or you say, we really do like the job you're doing for us. We want to keep you engaged and we'll keep paying

[Chair Alyssa Black]: Are those contracts available either publicly, since these are nonprofit entities, or are they transparent to the Green Mountain Care Board as the regulator?

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Yeah, so we are a for profit organization, and we do have our rate structure built into these agreements, so we do think of them as proprietary and we ask for the protection. The hospitals then in turn say to us, we will protect that privacy, but we are always respectful of the sunshine law or an open records law because we're across the country and there's different approaches to the same thing for different states. So the truth is, yes, we'd like to keep that as confidential as possible because it's our proprietary, it's how we get paid. But everything we do is done with the approval of the hospital board. Sometimes that comes through committee or sometimes it comes through their executive officers, but ultimately approved by a hospital board. And so if I can help with detail or example specifics, I'd be happy to do so and follow-up.

[Chair Alyssa Black]: I was just, I mean, in particular, I was wondering if a regulator of Green Mountain Care Board was privy to these contracts, even if they're not public, that they're accessible by them. Understand proprietary.

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: I would think that to some degree, then how other contracts for other services are handled in a community hospital, the rules would be similar. Thank you. I'll keep moving. Yes, please. Thank you for the questions. Springfield Hospital clarification. So truth is, I've had people approach me about our relationship with people and say people in the healthcare world here. I have had an opportunity to listen to different meetings. I don't know if they were all in this room. Pretty sure they were in our state capital here. And I think, we think, from Ovation's perspective, there may be some confusion about our relationship with Springfield Hospital. So hopefully I can provide some clarification, and certainly I'm open to any questions. I know this is a busy slide. Could share with you this actual document should anybody want it. Frankly, you could go online and get it. But this is a success story document, And this is my handiwork trying to build a slide. So I took a seven page document and copied and pasted here for you. Ovation was founded in May 2021. And as I've referenced before, the legacy of Ovation is a company called Quorum Health Resources. We've had different names Quorum Health Resources, QHR Health, UHR. Quorum Health Resources, we serve Springfield, we still are. But QHR started serving Springfield January 2019 through April 2021. We helped take Springfield through bankruptcy. That was June '19 through December '20. And then there was four months later after that, we were still QHL. We became Ovation in May '21. So let me back up just a little bit. I was living in Middlebury, the December 2018. I received a phone call from a banker in Massachusetts saying, we're worried about this hospital, Springfield. Got your name, QHR. We know you help community hospitals across the country. Understand you're from Vermont. Do you think you could help? We'll do what we can. Literally two hours later, I get a phone call from a board leader at Springfield Hospital at that time. Hey, I got a phone call from a banker. I understand you live in Vermont. Can you help? Yes, sir. And so I was in Springfield twenty four hours later driving from Middlebury. December 2018. Between December and January, straight up, but also met with great respect, the hospital board and the two executives, CEO and CFO at that time, decided to part ways. So it's now 2019. We're still getting to know each other. But will UQHR provide us executive leadership, an interim CEO and an interim CFO? And we said yes. Over time, it was one interim CEO, and we actually had two interim CFOs working it. They just sort of overlapped. So we helped turn around Springfield. We helped restructure Springfield. And we did all that before there was an Ovation Healthcare. We did all that before we were private equity. We were Quorum Health Resource. And so I know because there's a very important part of this conversation, as you've been in here before, and I think we'll stay in here for a while, around private equity. We were a for profit company owned by a for profit hospital company. We had been for the better part of forty five years, give or take, owned by different hospital companies. Quorum Health Resources, which is now Ovation Healthcare, all we've done all those five decades as I've shared is serve hospitals just like Springfield. So I've heard questions or observations or comments or wonders, with all respect meant that if I'm also honest, some folks I think knew or should have known. But if I can help with clarification, that's what I'm trying to do here now. We didn't become private equity owned. We didn't become Ovation Healthcare till after Springfield came out of bankruptcy. A very appropriate restructuring tax opportunity as a fiduciary, if somebody presents to you this opportunity to help your hospital restructure its debt as a fiduciary, you would look at that very strongly. And so it is a very sad story, the fact that Springfield was the way they were then. And the truth is they're still very fragile, there's no doubt. But I would also say the hospital isn't. So I remember getting to Springfield, and for the sake of the story, they had less than four days capsule in here. They didn't have enough money to pay attention. They didn't have breath in their body, they were scared. They were going through leadership changes. They're looking at almost no day's cash. And so taking them through bankruptcy, within two or three years, had them up to forty days cash on hand. And I want to be very careful about my words. I just said we have them. It wasn't we. It's the board. It's the medical staff. It's the executive team. It's the support of their community. It's the support of this state. I remember sitting with our governor. I remember him saying, who are you? And I explained that I'm from Fairfax living in Middlebury. And I remember sitting with mister Houghton, ambassador between this office, the governor's office, and his team in Springfield. And so if there's any questions or if I can help clarify, I'm just doing the best I can. I'd happy to help there.

[Chair Alyssa Black]: And I wanted to thank you for pointing out that the state invested heavily to save Springfield. Absolutely. Leslie? Yeah, 10,000,000. How much? $10,000,000 I'm noticing that Ovation has been involved with Springfield from 'twenty one till now, so four years. And in the current FY budget, there's thirty three days cash on hand and 0%. I'm just wondering if you could speak to that and to what progress you might think has been made in the stability.

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: I think that's a really good question. So if we go back to 2019 and we bring you to current 2025, early twenty twenty six, and it is not my role to speak for Springfield, But I do have regular conversations with their executive leadership. I do have conversations with their executive board leadership regular. And I'm very aware of the financial fragile state of Springfield, much like many hospitals in the state. And I also know that Springfield reports regularly and has often ongoing conversations with representatives of the Green Mountain Care Board. And I've seen them go from less than four days cash to forty days cash to seventy days cash back down to forty days cash. Right now, they're right around forty days cash, although I know what you're referring thirty three,

[Chair Alyssa Black]: but that's considered highly vulnerable in that scale. So it's

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Tell me how this unfolds. I'm not seeing improvement over this long period of six years. I think going from almost having no day's cash to being close to forty, which they are right now, is improvement. I really do. I also don't agree, although I understand the point that having hospitals at days cash target about 140 to 160 in the state is being recommended. I understand that point. I don't understand, or maybe would have a different perspective. I'm not saying in any way it's wrong. But being triple B rated, I think you would always want to be better than that. Right? So stronger days cash is always good, always. But a day's cash, although a reference to fragility, is an ability to buy time. If you were told today you have no more money coming in and all you have is your banking account or your savings account, you're not gonna stand still, I don't think. I think everybody would right away start making changes to their budget. And I've heard references in the fragility of of Springfield, well, they're around forty days cash. One doctor loss will wipe out the hospital. No, it won't. One service line change or stutter or stumble will hurt the hospital. Yes, it will. But will it wipe it out? No, it won't. Because they've got around forty days cash right now, which is about $200,000 a day for Springfield. That's what a day's cash is. And they will immediately, as they have done since December 2018, where we are today, never stand still, always looking at their operations, always managing their financials, very much aware of how they help the healthcare health and the economic health of their community. So I appreciate that forty days cash is seen as a sign of fragility, which it absolutely is. But Springfield is not standing still, never has, because of their board, because of their medical staff, because of their executive leadership, and I think the support they enjoy in their community.

[Chair Alyssa Black]: Could I ask another I think we should move on to what pertains to this bill five eighty three, and the testimony you wanted to give around this bill in particular.

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Thank you for that opportunity about Springfield. Private equity and health care. So the next three slides tend to say that I know everything about private equity and health care. Absolutely not. I'm certain there are people who are more learned and or more experienced could help us all here. But for the sake of our conversation, private equity in healthcare is growing. There's no doubt about it. You can read it. You can Google it. I can tell you all are doing a lot of study on it. And you can see equity coming in to invest in areas of inefficiency in hospitals or healthcare systems across our country. And there's different types of PE private equity, private equity that owns hospitals or nursing homes, systems. It's growing. I think in fact, my personal opinion, you see the growth and if you go out and do research, sort of, so not only my experience, but research and talking to different people, but this is my opinion. There are inefficiencies. There are opportunities to improve performance. Think about those different business lines of service we talked about before, revenue cycle and the complexities there. Think about information technologies and the challenges there. This graph at the bottom is my attempt to help with this conversation, so maybe personal as well as professional. On the left hand side, issues of control, which I would submit, we would submit from ovation, are issues of concern. On the right hand side, to me, to us, is more positive. There's opportunities for collaboration and contribution, meaning contribute, meaning work together. So to the left hand side, there absolutely are horrible stories out there. I'm saying that from a personal perspective. I'm sure I'm blending it with professional, but it's probably coming from a personal place. When you read the stories of Steward Healthcare and Prospect Health, no, and no thank you, and not in this state in particular. When you used to have folks that are owning providers and facilities, it doesn't mean that's automatically bad, but let's be careful about medical decision making, corporate practice of medicine. When we move to that, and I'm trying to be personal and professional here, this is where I'd be concerned. And I know this is where we're concerned as an ovation, because we're getting a bad reputation for practices that are happening on that side of the screen. As you move to the right hand side, now I know that I'm taking liberty here, private equity, private investment. And if I pull up on the notion of private equity for a moment, which we all immediately go to as private like use of capital, absolutely. But equity is also equity, different from equal, giving people different opportunity with their different means to invest in something that matters to them, like health care. We all don't have the same financial backings, but we might have the same desire. So, epic. Big electronic health record. Privately held. Family. Faulkner. Epic's amazing. It is truly a high end Cadillac system. It works really well in big systems. Think universities, academic medical centers, quaternary, tertiary, large facilities. It's excellent. And their ability to invest and help us or help hospital families of any size, especially bigger ones, around artificial intelligence, Goodness. Press Ganey. Press Ganey is private equity owned. I haven't done account and it might be making a point for effect, but more hospitals than not that I serve across the country with that team of 10 to 60 intimate have Presque Any for their patient satisfaction and experience scores, think HCAHPS, which is a requirement of CMS, Centers for Medicare and Medicaid Services. And so as we think through one side or the other of the scale, I mean, definitely people talking about good private equity or bad private equity. I think as we think through the good of an epic, when we think through the good of a press gain, there's good there. Geologics, it's a wound care company. So think hyperbaric chambers and the ability to help people with wounds that are really, really hard to heal. And you want folks to be able to access that service where it makes sense. Keeping care close to home, local makes sense, but you also need to include in that language appropriate. So Healogics is a great example of private equity, I think. I'm thinking of two hospitals I serve now, one in Mississippi and one in Kansas. The one in Kansas has an outstanding wound care program. Critical access hospital, small community. They work with Healogics. They've got two chambers. They've got outstanding and recognized outcomes. And so they can't afford to buy the chambers. They can't afford to find the talents. They contract with Healogics, and they pay Hologic's to take care of people in their community. But I come across the state of Mississippi, a hospital that's a little bit more advantaged and says, We want to provide the same service. We've been with Hologic's for a while, but now we're going to own our own chambers, we're going own our own people, going to make sure we're providing that quality care. Healogic is an option for those two hospitals, I think has been really helpful in providing quality care in these two different communities. And I purposely stepped outside of the state of Vermont to try to provide some perspective. But on this side of the scale of collaborating and contributing, this is where there's shared services. Why would you reinvent the wheel and the complexities of revenue cycle when somebody else has done it and has money to invest in it and can take highly complex revenue cycle and give people an opportunity for jobs that might be outside their state, but they get to live in this state. Same thing around information technology, they make the points, I think. Shared service, taking costs out of our shared service areas. Scale, I think we all appreciate economies of scale. How can we provide valuable service that people want to keep buying from us, and we can bring them services at a lower price or price control, and then advice.

[Chair Alyssa Black]: Do you have concerns with five eighty three? I mean, is all wonderful stuff, wonderful investments, wonderful outcomes. I'm just wondering where Nothing in May doesn't allow you to continue this good work that you're doing. I I guess I'm I'm unclear how you feel about the bill that's in front of us.

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: I'm glad that you all are doing that work and that you're taking the time that you are to hear different perspectives From an Ovation Healthcare perspective, we are on the right side of this scale here, meaning not the left side, but the right side. We don't own hospitals. Everything we do is about service, hopefully bringing perspective and offering advice because we have different perspectives. But I think the language of the current bill requires the complete attention, the hard work that you're all doing, because I have heard stories, right? And maybe they're just stories, but there's some interpretations of folks out there saying, well look, if I had a child that wanted to be a provider, a dentist in the state, and I, as their parent or a family member with means, wanted to invest in that person's practice, I might be prohibited from doing so. And so if there's people who have those fears out there, that type of conversations you're having and the results that will come out of it, I think are super important. I'm

[Chair Alyssa Black]: not sure anything in this bill doesn't allow that or allow the good work that you're doing. If anything, it's trying to stop the control and concern so that you can thrive.

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Wonderful. Our ability to help hospitals in the state of Vermont and this part of the world, that's all we've ever wanted to do for now five decades. So if I keep going.

[Chair Alyssa Black]: Keep going.

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Yeah. So people have talked about Ovation Healthcare as being private. I mean, the collaborative, which we'll get into. Ovation Healthcare, we are private equity owned, and our equity owner is Grant Avenue. And the link to their website I put here at the bottom right of the screen. Grand Avenue is not the only investor in us. There's some other non private equity, but we do have people, organizations like teachers retirement and pension plans out of the state of Texas that are investing in our company. So again, the notion that the equity of this private equity conversation allows people with different means to invest in something that matters to them, like enhancing patient health, improving overall healthcare systems and positively impacting communities. I think there's a shared vision there. And our founder, our owner of Grant Avenue, a gentleman named Mr. Gamina, and Grant Avenue was based out of New York City. At the risk of harming goodwill in this room, Mr. Gumina is a passionate, like my mom, Red Sox fan. And the ability to spend time with him, I won't forget when I first met him about five years ago, because I've been doing this at that point about twenty five years, either as a hospital administrator or serving hospitals across the country. And I'm not exaggerating, he came to me, we were in a meeting and we sat down and he said, If I could give you a lot of money, what would you do with it? That really got my attention, like, what do you mean you're going to give me a lot of money? But what his conversation led to, Chip, you have served hospitals like we're thinking across the country for all these years. If you had somebody helping you with resources, how would you turn these resources, in this case dollars, into helping hospital families like I've talked about? And I said, I would enhance supply chain, I would enhance revenue cycle, I would enhance information technology, I'd make sure we keep investing in education and anything we can do to help hospitals, especially the ones that need that advisory and consulting services on the homes, everything. We need help there.

[Chair Alyssa Black]: Oh, Lori, go ahead. I'm sorry. Question for you on maybe

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: I'm gonna back up.

[Chair Alyssa Black]: Well, maybe you're gonna get to it. I'll hold my questions since you're gonna pick up.

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Trying to blend that private equity conversation maybe to the questions with Grant Avenue for transparency with the concerns or questions or the understandings about Ovation. The right hand side of this Ovation, supported by Grant Avenue. We do not provide clinical services. We do not own hospitals. We don't cherry pick locations. We serve in a rural and in intensely rural parts of our country. And we'll do anything and everything we can to help that hospital or their health system take care of their community, because that brings us back around to that cornerstone. So I am a hospital operator, the son of a nurse and a pediatrician from Vermont. I work with unbelievably talented people who are experts in strategy, clinical care, finances, workforce, could just go on and on and on. And what we're trying to do is help hospitals that want to stay independent, help them stay independent. And we do so with experience and discipline and caring.

[Chair Alyssa Black]: I'm gonna go with Lori since she Yeah, for sure.

[Rep. Lori Houghton (Member)]: Deb, can you help me understand the hierarchy here? So Grant has an investment in Ovation, which you're with. And Ovation does not own any hospitals. They with, they have a contract with hospitals to help with non clinical

[Chair Alyssa Black]: work, operations. Is that a fair statement?

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Sure, yeah. I can help her on the clinical part.

[Rep. Lori Houghton (Member)]: Okay. So can I just stick with that? So the money from Grant, the investment, was that a onetime investment to Ovation? Is that something that they continually invest in Ovation? And does any of that money flow down to the hospitals?

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Yeah, I honestly don't know the dollar amounts involved, but they were millions. They bought us away from a hospital company. We actually went out in the market and asked private equity, would somebody please come buy us away from our current hospital owner at the time? And I should know those numbers, but I don't. They bought us away from a for profit hospital company. We were this microcosm of a world that does everything we've talked about. We didn't serve those hospitals of those hospital companies. We were always out here for fifty years doing as I've shared. Grand Avenue bought us away, so there was a price for that. And then they've been investing in us. Along the way, we bought other companies. Let's develop revenue cycle services for hospitals. We went out and bought different components of the revenue cycle continuum so that we could then turn and be a full continuum of revenue cycle services for a hospital. That was coming from folks like me, and I don't like to make it about me, but people like me who said, Look, we've been working in QHR for forty years. I've been a hospital CEO in a rural setting three times. If I could get help, this is the type of help I wanted. So you have these equity people saying, we want to invest in that. How do we buy companies or build services so we can provide a full continuum? And then I would just get back into that line of business conversation.

[Rep. Lori Houghton (Member)]: So then this grant, so since the time the grant has been involved with Ovation, have they instructed Ovation to downsize hospitals, close hospitals? Like where, how do they have a play in what happens to hospitals?

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Yeah, so, they have a play in that, in me doing my job. So Ovation doesn't Ovation Grant Avenue doesn't tell Ovation how to serve a hospital. They, in essence, bought us for our expertise so they can put us into their full book of business. And I might come to you as a hospital board member and say, Look, I've seen this before. This line of service is concerning. Your staffing is concerning based on comparative metrics. It's unique to you in your hospital, but let me offer you some outside perspective. Here's what I've seen happen in different settings. And then you as a board member, I would offer my recommendation. I would say, here, talk to these other hospitals. They're similar to you or they're dissimilar to you, but ultimately that decision is the decision of the board. So we don't own, we don't control, frankly. It's about influence. It's about trust. It's about having discipline and caring and experience. But as I made the point before, you are that very, very unique hospital serving your community, you're a trustee, a board member, a member of the medical staff, team, then you're asking me, what do you think? And I share my opinion. Hopefully, it was good backup. And then it's yours to decide.

[Chair Alyssa Black]: Okay, last question, Alyssa. Yeah.

[Rep. Lori Houghton (Member)]: And so, which is great, Are there any financial requirements, metrics that Ovation has to hit to keep Grant happy? Back to shareholders, back to your for profit, their for profit? The shareholders may not be.

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Answer is yes, absolutely.

[Rep. Lori Houghton (Member)]: And does that then come from hospitals?

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Great question.

[Chair Alyssa Black]: Sorry, that was

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: We do, we have a budget. I have a budget. I'm responsible for the team that serves those 60 hospitals. Those 60 hospitals, we've sold a whole bunch of services to them. They might buy them in one pieces or they might buy them in an all inclusive package. And then they ask me to build a budget for the year. Are you going to keep your business? Are you going to grow business? Are you going to lose business? Will you hit your budget target at the end of the year? And if I do, if we do, wonderful. If we don't, we need to be able

[Corey Grant, United Public Affairs (representing New England Collaborative)]: to explain

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: it. And if it's a continuing loss, we need to be able to explain that as well. So it's not a repercussion or a ramification for the hospital families we serve. And I don't mean to undervalue in any way because of the talents that I'm talking about that serve these hospitals. I don't mean in any way to diminish them. If we don't bring value to the hospital, if I don't bring you good advice, if I don't bring you good examples, and it's not about me, why would you want to buy our service? That's what it is.

[Chair Alyssa Black]: Okay, thank you. Can I expand on that a little bit? Ovation is within the portfolio of Grant Avenue. Grant Avenue has many things within its portfolio, including service providers. Is there any, when Ovation is contracted for consulting or with hospitals, is there any moving or I should say suggesting services that are companies within other companies, not Ovation, but under Grant Capital, Grant Avenue's portfolio? Portfolio.

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: I would imagine that could happen.

[Chair Alyssa Black]: I believe they have a supplier in their portfolio, don't they? Like medical supplies?

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: You definitely do inside ovation. You do

[Chair Alyssa Black]: in ovation? Yes. Part of the New England Collaborative, there's been this shared purchasing group purchasing. Does Ovation, are they basically the wholesaler of

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: group purchasing that's happening? Great question. So moving into a conversation about supply chain, in this case, group purchasing organizations, and this part in our part of the world, there's at least two really big ones. One is called Busient. Visient is a group purchasing organization connected to the New England Hospital Alliance, which has a real strong Dartmouth connection, an amazing organization. We represent Health Trust Purchasing Group, which is a GPO. Health Trust Purchasing Group is the same GPO that serves the Hospital Corporation of America or Tenet. Some very, very big for profit hospital companies, They all use that same GPO. We don't own any of that. We are a channel partner, which means I serve a bunch of hospitals. We know those hospitals need access to supply chain. We know they get the best quality and price when you get work through a GPO. And you have different options for a GPO. The one we choose is HealthTrust. And to be competitive, with due respect to Visient, We believe when you put HealthTrust Purchasing Organization, HealthTrust up against Visient, HealthTrust for the hospitals we serve beats Visient from a cost perspective. And so we on the Ovation side are working with our hospital families to help them align with the best GPO possible. We think that's health trust. And then we're constantly working with them to make sure they're maximizing their use, appropriate use of that group purchasing organization. So think things like tier, or consolidating, or buying things at the same time, which I know that David Turner talked about when he was meeting with folks back in early December. Does that help?

[Chair Alyssa Black]: Yes, it does, thank you. Leslie, did you have a question? Yeah, I'm just noticing on this slide, if I may. Patient's prices. I was wondering how you said, you have a bullet there, ovations since Grant Avenue Convolvement and your comment on prices.

[Rep. Leslie Goldman (Member)]: And I'm just wondering how your prices get determined. Maybe it's proprietary to get it. But just wondering how that is established.

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Yeah. Thank you for that question. And with respect to me, it sort of connects back to the question earlier. It's a supply and demand. I might think I'm worth a million dollars in service to you and if you think I'm worth a dollar, so you can go out in the market and say hospital advisory consulting, average hourly rate, there are competitive, really amazing companies across the country that do similar to what we do. Obviously, have pride, I don't think they do everything we do. But our pricing is I come forward and say, you're asking for this service. Here's what I think we should charge you as an average hourly rate or an all inclusive price for this engagement. And you will agree or you won't.

[Rep. Leslie Goldman (Member)]: You negotiate each one. Absolutely. Just to be honest, I'll open three of your hospitals are in my representative area, which is why I'm hitting the bottom.

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Is that Grace Springfield and Brattleboro? That's right. Yes, ma'am.

[Chair Alyssa Black]: I see in your slides that you're moving on to the New England Collaborative. And for time's sake, think we're gonna because we do have to move on to other witnesses. And there are there is one of them that I see, and if I bump her again, she may never speak to me again. I'm over there. Have an

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: exact information that

[Chair Alyssa Black]: I can just I wanted to finish by it sounds to me as though from what you do, yes, I know you have the word private equity, and nothing in this bill bans private equity. Do you have any issues with the bill

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: whatsoever, or are you in support of this? I don't know how to answer that question. Okay. Thank you. Alright. If the bill supports the type of service we've been providing for fifty years, wonderful. If there's confusion and it inhibits the ability for somebody who wants to invest in the caring service, if that inhibits it, I would be concerned about that.

[Chair Alyssa Black]: I don't think we want to do that either, so we want to get that clear. Brian, and then we're to move on.

[Rep. Brian Cina (Member)]: Just to follow-up to that response, does the bill in its current form undermine your work?

[Corey Grant, United Public Affairs (representing New England Collaborative)]: We have Corey Grant

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: with the

[Corey Grant, United Public Affairs (representing New England Collaborative)]: United Public Affairs that represent the new collaborative. We'll get you some notes. There are some concerns that the collaborative had that would undermine some work, and we can get that for you. Thank you. The tool with Chitt today that I just want lay out is for patients who have been kind of these days, the PE involved in hospital or the boogeyman, we really want to clarify that they're doing good work in our community and our hospitals, and that we're sympathetic to what I think should accomplish that.

[Rep. Brian Cina (Member)]: What I'm hearing is we will be receiving further testimony about how to improve this bill so it doesn't interrupt the good work that's occurring in Vermont.

[Chip Holmes, EVP Hospital Operations, Ovation Healthcare]: Okay.

[Chair Alyssa Black]: I'm trying to communicate with Jessa how long she needs. I'm sorry. Yeah, Thank you. Oh, I'm just wondering if it would be about thirty, we should take a break first. Only thirty minutes, but feel free to take it. I don't want be in a break, so feel free to take a break first. I think we should take a break first. Let's be back here at 02:30, and I think that'll set us to the right time. And we will have the long awaited Jessa Barnard. I'm sorry, I bumped Jessa three times from, I think, schedule. I think it was two.