Vermont Legislature SmartTranscripts:

[Speaker 0]: All right, good morning. This is a continuation of the Senate Health and Welfare Committee meeting and as well House Health Care. So we're really very pleased to have both coming in to testify this morning. And just a couple of words about what the purpose is today. Last year, we did a lot of work together as both House and Senate in passing some important bills for healthcare transformation. And the hospitals have been key in building that transformation process in the community. The hospitals have also been key in saving dollars and costs for folks. And I will say that as we listen today to what is happening and has happened, I think we need to be pleased with the results. I hope we're pleased with the results. I'm looking at each one of you saying that. And then also that this is the first step. We know there's more to do and there always will be. So I've asked each person who's testifying to talk a little bit about what's been accomplished to date as a result of our work together, and then what you see as next steps and going forward with healthcare transformation, regionalization. We are not talking about the Rural Health Transformation Grant, but I know that's gonna creep into our questions and your presentation, that's okay. So thank you all for being here.

[Rep. Alyssa Black, Chair, House Health Care Committee]: Thank you all for being here. Looking forward to hearing about the good work that you all have been engaged in and where we are in the process.

[Speaker 0]: Perfect. Well, good. And we have the two committees are here. One of my members is unavailable for personal reasons, but other than that, they have a pretty good cohort of folks. And I'm gonna invite Michael Del Treco to come up first.

[Rep. Alyssa Black, Chair, House Health Care Committee]: Is that okay? You good?

[Michael Del Trecco, President, Vermont Association of Hospitals and Health Systems (VAHHS)]: Thank you. Thank you for having me today. I submitted a testimony with you all. You should you should have it. But Chair Lyons, Chair Black, and members of the Senate Health and Welfare and House Health Care Committees, thank you for the opportunity to speak here today. For the record, my name is Mike Del Treco. I serve as the president of the Vermont Association of Hospitals and Health Systems. And you're going to hear from three hospital leaders today. And I wanted to open by noting that the work that you'll hear them share with you is happening across all of our Vermont hospitals, not for profit hospitals. We've been doing a lot of work in our boardroom, and hospitals recognize the significance of the financial pressures Vermonters are facing and that the state is facing. And we agree that the status quo is not sustainable. That reality has required some difficult but necessary changes. A key part of the work that we've been doing in our boardroom is around our Vaas Affordability Action Plan, which reflects again a shared commitment for all hospitals, not just the three here today. And there's three pillars to that plan. The first pillar has already been accomplished, and it was around submitting budgets in 2026 that met the guidance produced by the Green Mountain Care Board. So working alongside you and the legislative leadership, the Green Mountain Care Board, and hospitals, we eliminated $230,000,000 of operating expenses in one year. These reductions came with significant changes. They were focused on administrative reductions, operational changes, and asking all staff, including physicians, to work more efficiently. The decisions required difficult trade offs, but all decisions were made with one goal: How do we minimize impact to patient care? The second pillar of our plan was to examine what could we do more, how can we do more, and where are those opportunities. So we've committed to additional cost savings. So part of that work, we reached out to a national health care firm Kaufman Hall. We had them come in and work with each of our hospitals to examine where they felt opportunities were. And we identified an additional $100,000,000 that could be saved. The recommendation around that $100,000,000 is to do it over two years. And that's largely because of the financial condition of our organizations. So if you look at those total reductions, by 2028, hospitals will pull out $330,000,000 operating expense, all around focused on affordability. And then the third and final part or pillar of our plan is we are committing to transformation. We're working with the agency of Human Services and each other to develop some real data driven regionalization and transformation plans that preserve access to care, particularly in our rural areas where hospitals not only delivering care, but are pillars of their communities and the vitality of their communities. These transformations, some of what you'll hear today, also create additional savings of about $40,000,000 that will take more time than what we've talked about before. So taken together, all of these efforts, we will meet the Oliver Wyman twenty twenty two two thousand and thirty savings target two years ahead of schedule. So again, over the next hour, you'll hear more details of what individual hospitals are doing, how they're collaborating and how those results are already showing up. These efforts, among many others, demonstrate our commitment to controlling costs, preserving access to care, and improving quality for Vermonters. Like you, this is hard work and we are committed in our boardroom. And as the voice of all hospitals in Vermont, you have my word that my organization will continue to make affordability a priority along with the work you are all doing. So when I respectfully ask that as we examine new proposals or new policies that we do it carefully as not to create any unintended consequences that might derail this forward progress. So again, you have my commitment to this momentum, and it's what we talk about in our boardroom all of the time. So thank you again for the opportunity, and thank you for all you do in service to this great state. I really appreciate it.

[Speaker 0]: Thank you. Question from the committee.

[Rep. Alyssa Black, Chair, House Health Care Committee]: I had actually attended your board meeting, I'm not even sure what the title of the meeting was, and you know, from Kaufman Paul. I think I'm a little confused and I want to be a clear, So when you have committed to reducing $100,000,000, are we saying $100,000,000 off of your anticipated increases? Or is today the baseline and we're going to reduce $100,000,000 from today's baseline? That's a

[Michael Del Trecco, President, Vermont Association of Hospitals and Health Systems (VAHHS)]: great question. I think we need to continue to be able to invest in our organizations and mostly our people. Our people represent about 65 to 70% of our cost structures. So it's responsible to have some level of growth tied to reasonable inflation. Medicare often does this work and refer to it as market basket adjustment. And in times of difficult, they do market basket minus. So I think it's prudent to be in that market basket minus mindset so we can invest in our teams and our talent.

[Speaker 0]: So along those lines, and then we'll go have one more question. But along those lines, obviously one of the drivers for the work that we've been doing and that we've been doing together with you was the overwhelming cost of hospitals in this state as compared with other states. So as an addendum to representative Black's question, are you looking as we are to see a reduction in that level, for you it's this way, where Vermont is higher than Maine or New Hampshire or other states, a reduction in that way. And is that one of the outcomes that

[Michael Del Trecco, President, Vermont Association of Hospitals and Health Systems (VAHHS)]: we have? Yeah, one of the goals is definitely to continue to move that cost downward. So last year, our historical trend on operating expenses had been about 8%. We brought that to 3% this year. And I think that is the starting place of what I think is reasonable from an inflationary point of view. Some of the challenges around that are we don't we're not a Vermont is not self sustaining. We have to buy our supplies outside of Vermont. And when those are still growing at eight or 9%, it puts more pressure on what we can do internally within each hospital. But I think the commitment to continue to put downward pressure by the $100,000,000 within our budget process or however else we might think we should accomplish that, we should maybe have conversations around that, our commitment. Yes.

[Speaker 0]: One last question. So

[Rep. Leslie Goldman, Member, House Health Care Committee]: these are savings independent of any action that might be taken regarding reference based pricing.

[Michael Del Trecco, President, Vermont Association of Hospitals and Health Systems (VAHHS)]: So when we look holistically at the savings opportunity and our financial picture, I think I would certainly move to more from the mindset that it should be inclusive of adjustments.

[Rep. Leslie Goldman, Member, House Health Care Committee]: So the figures you gave included savings that might come from reference based pricing?

[Michael Del Trecco, President, Vermont Association of Hospitals and Health Systems (VAHHS)]: We did not calculate reference based pricing as part of that model. We were looking at our operational efficiency opportunities.

[Rep. Alyssa Black, Chair, House Health Care Committee]: Thank you.

[Michael Costa, President and CEO, Gifford Health Care]: Thank you.

[Speaker 0]: Very good. Thank you very much. Thank you for your work in this area. So we have Sean Tester, who's here from Northeastern Vermont Regional Hospital. Welcome. Why don't you introduce yourself for the record?

[Sean Tester, CEO, Northeastern Vermont Regional Hospital (NVRH)]: Thank you very much, senator, and thank all of you. I do have some comments that I will read today. First off, thank you for having me here to speak to all of you. This is really important. And thanks, Mike, for that great overview. For the record, my name is Sean Tester, and I'm the CEO of Northeastern Vermont Regional Hospital based out of Saint Johnsbury. So once again, thank you for everything you are doing to help us move constructively towards a system that's more affordable for our patients and where we can keep the right services in our communities. Following the legislative action over the last two years, NVRH has truly leaned in to the hard work of transformation and affordability. Doing our part to reduce hospital spending statewide by $230,000,000, I'd like to share with all of you some of the things that we did at our team. Now for perspective, NVRH is one of two small critical access hospitals serving one of the poorest, oldest and least healthy regions of the state. Based in St. Johnsbury, we work closely with our partners at North Country Hospital in Newport to serve the entire Northeast Kingdom. Through our cost reduction efforts last year, we were able to achieve approximately 2,500,000 in expense reductions. Let me highlight some of the things we did to make that happen. We offered last summer voluntary early retirement that 15 members of our staff participated in. And while we did have to jackfill many of those positions, some we were able to eliminate outright. We also eliminated our occupational medicine program. And in the spirit of efficiency and making sure that those services were still available, we rolled those services into our express care clinic based out of Lindenville. We did reduce eight FTE in addition to that. That included five administrative positions and three clinical. We restructured our nursing scheduling and staffing to reduce traveler costs as well as overtime expense. We made efficiency improvements in multiple departments, including our emergency department, our hospitalist program, our birthing program. These resulted in staffing cost reductions in those areas. We also found targeted savings in our benefits and staff education. This included, most especially, eliminating coverage for weight loss drugs for our employees and those covered by our health plan, and that found significant savings. We also terminated an ENT partnership that we've had for a very long time with Littleton Regional Hospital in Littleton, New Hampshire, and we are focusing on growing our own ENT services organically. Finally, we also found savings in our information systems through reducing licensing costs, changing how we deliver end user training and support, and other savings. We're gonna be doing even more in coming years because we know we have to. Through the consultation with Kaufman Hall, which has been very helpful, we believe we can find about another $1,500,000 in operational efficiency savings over the next two years. We know this won't be easy, and we have hard decisions ahead of us, but we also recognize how important this work is, both for our patients and the people we serve, as well as for all of Vermont. One thing I want you to know is that all our hospitals are leaning in on this transformation work, and we're doing it together. Here are some important things that NVRH is already accomplishing in partnership with North Country Hospital to the north of us. Our boards have held two joint meetings to discuss collaboration. This is helping to set the tone for our joint organizations moving forward and working together. We are currently sharing a pharmacy director who works part time in each facility. I wanna keep in mind that that's not easy when you have a forty five minute drive between two sites over Sheffield Heights in the winter. And we are collaborating on HR policies and procedures so that neither hospital is reinventing the wheel. We're working with the UVM Medical Center to expand partnerships in care delivery, including for specialty services, for example, cardiology, as well as doctor doc telehealth, for example, Tele ICU. This helps us save money and keep care more local in our own communities. We're really appreciative of the partnership we have with UVM. They've really stepped up and it's working well. We're using our grant funds to engage transformation consultants who will help us develop strategies to coordinate and integrate clinical services to meet the needs of the entire Northeast Kingdom. I want to close by thanking these committees again for your hard work in helping address Vermont's affordability crisis over the past two sessions. You've enacted a lot of legislation focused on transforming the entire health care system, and we are doing the work of implementation. While your hospitals remain fragile, especially ours, we are committed to the change and are likewise committed to serving our communities. We look forward to your continued support as we balance these priorities.

[Rep. Alyssa Black, Chair, House Health Care Committee]: Thank

[Speaker 0]: you. And actually, I do have a question. So one of the goals that we have is to identify gaps and needs within community based services and linking those with hospital care and continuity of care. And what, if any, thinking are you doing about that within your hospital and working with

[Sean Tester, CEO, Northeastern Vermont Regional Hospital (NVRH)]: Nonhospital organizations? Pardon

[Speaker 0]: me? Nonhospital health or DAs, SSAs, and so on.

[Sean Tester, CEO, Northeastern Vermont Regional Hospital (NVRH)]: Yeah. Actually, it's a great question. In fact, I have a meeting this afternoon with the CEO of Northern Counties Healthcare. We meet fairly regularly. I'd like to say once a month, but sometimes schedules don't allow it. We've always had a strong partnership with our regional nonhospital providers, Northern Counties Healthcare, NKHS, the Council on Aging. And many years ago, we developed an accountable community for health called NEK Prosper. Some of you may have heard of it, where we come together on a regular basis to try to address the social drivers for health and look for ways to keep people healthy and out of the hospital health system. One of the things that we're embedding in our transformation goals that which is the plan we have due on February 15, thanks to the legislation that was passed back here, working with AHS and the team, Soraya and and Kate, one of our goals in that is to expand NAK Prosper to cover the entire Northeast Kingdom because we believe that through that vehicle, it helps us better collaborate and coordinate those things in care delivery to meet the needs of all farmers.

[Speaker 0]: And as you're talking about a vehicle, that reminds us of the need for transportation services and the work that is ongoing there. Is there work ongoing with patient or non medical emergencies or medical emergencies?

[Sean Tester, CEO, Northeastern Vermont Regional Hospital (NVRH)]: It's an uphill battle. We've had so there are two pieces of it. There's hospital transfers, which is a big challenge with EMS, right? We have had a community or regional meeting around EMS services and how we best support the system. I know there's been been work in that area because we really do have to shore it up. In many ways, it's a staffing issue for these organizations. They're very challenged in that space. But it's also critical because if we can't get people to the right location of care efficiently, then impacts their overall health and ultimate outcomes when they have an event. So that's one piece. And then there's just the routine transportation, right? It's the it's the how do you get people to the care and tell a little story. Some of you may have heard it before. I apologize. But we lived next door to my grandmother until she passed away in 2019. 93 years old. She was healthy until last year of her life, lived independently until at least the last six to three months of her life. In that last year of her life, she was 93 years old, she needed a lot of care. Nothing out of the ordinary, she was generally pretty healthy, but she would start suffering from CHF. She had breathing issues, and she needed to get to regular appointments at least once a week, whether it was her primary care physician, whether it was her cardiologist, her pulmonologist, her podiatrist. Luckily, my wife had flexibility and really stepped up and helped her make many of those routine appointments. All of those appointments were available locally in St. Jane. Now, we're very privileged in the fact that my wife had that flexibility and that my grandmother had a strong family support to make sure she made it those appointments. I can't imagine how we would have done it without that, but many of our neighbors lack the support, lack reliable transportation. For them, it's a big uphill battle, and it's a real struggle. And that's why we work closely with RCT in our area. Caleb Grant is fantastic. He's an excellent partner. They've participated in in our NAK Prosper meetings to help us develop models. I can't say that we've got a new one going right now, but we've worked with him for the last five to ten years on how do we make sure that those people who need to access their appointments can get there. And I think moving forward, supporting them is gonna be critical because because our neighbors need it.

[Speaker 0]: I I I said we weren't gonna talk about the Rural Health Transformation Grant. There's some transportation there. There's transportation embedded in that grant process as well. Any other questions? Representative.

[Sean Tester, CEO, Northeastern Vermont Regional Hospital (NVRH)]: Thank you, Madam. Talked about restructuring how you were using nurses to move the travel nurses. Do you have any data on that yet on what impact that's having on the services that are being provided to the patients? In terms of quality? Yeah. Yeah, well, you bring up a good point. We really depend on our travelers. We still have about 10 travelers, primarily covering our medical surge floor, which we continue to be somewhat challenged in staffing. We understand that that is a choice that many nursing professionals make, but we also understand that the most invested members of our team are often those who are in there, they're there for years, and they're committed to caring for what I call our friends, families and neighbors, because that's who shows up at my hospital. Right. So we do know that as we work towards reducing our reliance on traveler staff, that that does help us provide better overall care and continuum care for our patients. Now, the positive is we've implemented a couple of years ago what we call our career advancement program, the CAP program. We had a very generous donor in our community step up to fund it for about two years. And what that CAP program does is if we have a staff member who may be interested in a career in nursing or allied health, because radiology technicians are hard to come by, as are lab professionals. One of the barriers that we heard from our staff was, I'd love to further my education, and we have great education benefits to help support our staff in that, but they couldn't find the time. Many people are balancing working full time, caring for family, whether it's kids on one end or aging parents on the other. Right? They couldn't find the time to take the education and to further their career so that they could become a nurse or a lab technician or radiology technician. So the CAP program, one of the innovations we did was we actually schedule them for less work time, but we still pay them for full time. And that additional time gives them the flexibility to do their studies and take their classes and then become a licensed professional in one of the professions, whatever they're pursuing or choosing. It's making a real difference, we're really excited about it. But it does take time.

[Rep. Alyssa Black, Chair, House Health Care Committee]: One more question. Go ahead.

[Rep. Leslie Goldman, Member, House Health Care Committee]: I have one if no one else does. You mentioned saving money by cutting access to weight loss drugs for healthcare workers. I'm just curious if in the analysis of savings, it's taken into account the long term impact on the healthcare system of our workforce having weight issues and the associated health conditions.

[Sean Tester, CEO, Northeastern Vermont Regional Hospital (NVRH)]: I can't say we did a deep analysis of that. We're a small institution and we just don't have the capacity and ability. But you highlight a real problem, which is that that cost of those drugs is borne by our organization, right? But the but the social benefit has a much longer time horizon than than typically the employment. And and I'm I'm being a bit speculative here. So you've got me over my skis. So take it with a grain of salt. But the reality is that those benefits are long term, oftentimes after the person has moved on or retired from their role. And and and that is a conundrum we face when we're making when we're having to make these cuts and having to make these decisions. But that highlights one of the challenges that we face when we when we do that.

[Speaker 0]: So and I'm happy to talk with you and share some data with you about that drug and effect on insurance.

[Sean Tester, CEO, Northeastern Vermont Regional Hospital (NVRH)]: The good news is sorry to volunteer. Sorry, senator. Stayed over you. The good news is it looks like with some of the pill based sorry.

[Speaker 0]: Alright. Good. This is great. So we'll hear from Steve Leslie, and we'll thank you for being here. Thank

[Dr. Stephen Leffler, President, UVM Medical Center (and UVM Health leadership)]: you so much for having me today. I'm honored to be here with Sean, Michael and Mike, other Vermont hospital CEOs. We're working together right now as a strong, aligned team to do the right thing for Vermonters. My name is Stevie Steve. My name is Steve Leppler. My mother called me Steve.

[Michael Costa, President and CEO, Gifford Health Care]: Okay. Sounds

[Rep. Alyssa Black, Chair, House Health Care Committee]: good to all. How sweet.

[Dr. Stephen Leffler, President, UVM Medical Center (and UVM Health leadership)]: I am the CEO start that CEO part too quickly of UVM Health and the president of UVM Medical Center. And just so people are aware, UVM Health is Porter Medical Center in Middlebury, Central Vermont Medical Center in Washington County, and UVM Medical Center in Burlington. I, as I said, do serve also as the president of UVM Medical Center and the CEO of the system. I want you to know that what you've already heard from Michael and Sean is that we are very focused across the whole state right now, the hospital system, on access care for Vermonters, high quality care for Vermonters, and affordability. I would say affordability mirror than I've ever seen in my thirty three year career in Vermont health care. I've been saying in every place I've been speaking that addressing these challenges, especially affordability, will take all of Vermonters. Legislature's clearly doing its part. Our regulator is doing their part, and the hospitals are trying to implement the changes that are coming. I wanna thank you for your leadership on this work to help make health care more affordable for the patients that we serve. UVM Health did achieve savings last year that were significant, but we're very aware it's not enough. We have more work to do, and we are committed to additional operational savings over the next two years as part of the plan that you heard from from mister Del Taco. I want you to know that through recent Green Mountain Care Board orders for the UVM Medical Center, our premiums for Blue Cross Blue Shield were reduced by 12% this year, and that's 12% decrease from what it was last year. And for a number of procedures like MRIs and CAT scans, the cost to Vermonters is 25% less. Some of that's not reflected in some of the data you have yet. I was just talking to Beth Roberts this week. It'll take some time for that to show up in some of the reports that are out there. That does not include act 55, which is the pharmaceutical price cap. So those decreases are on top of our rate decreases and the other savings we're monitoring will see. This work is complicated. It's difficult. It's hard, but it's real. We believe it's measurable, and we're committed to having it be ongoing. We're not done. I know we're not gonna talk a lot about regional program, but I do wanna say that this regional transformation work is essential to Vermonters for the infrastructure of system that we can build going forward.

[Speaker 0]: So regional transformation, absolutely, and that's part of the state plan that's in progress. That's fine. Really referencing the RHT Okay. The the grant money from the federal government.

[Dr. Stephen Leffler, President, UVM Medical Center (and UVM Health leadership)]: So I wanna make sure everyone here knows that UVM Health is completely committed to partnering with hospitals and other agencies across the state of Vermont to improve access to statewide care. We committed are to making sure that people can get care as close to home as possible when it makes sense. I'm very aware it's hard to get from St. Johnsbury to Burlington on many days of the year. We have to have ways for people to get care in St. Johnsbury or in Gifford when it makes sense. We want people to get care close to home, in the right place. And oftentimes, let's be honest, those sites are cheaper to deliver care than at the academic medical center in Burlington. We have some strong collaborations that have been in place for a long time and it worked quite well. For nearly two decades, we've had cardiologists in Saint Albans at Northwestern Medical Center. We have two cardiologists there that are part time partial FTEs that work beside their full time cardiologists that share call, procedures. They do a lot of things together. That keeps a lot of care in St. Albans. It doesn't have to come to Burlington. We do infectious disease consults with Northwest. We have historical partnerships for pulmonary care and ENT, And we had a urologist there for a long time. They were finally able to hire their own, and then we pulled that service back. We've had partnerships with Rutland for a number of services as well. But we know that's not enough, and we know we have to do more. And through my career, I've seen that ebb and flow to different amounts. I have asked our medical group leader, doctor Harrington, to double down right now and really work hard to figure out how we can deliver more specialty care across the state of Vermont to hospitals that are not part of UVM Health in the way that you think about it. We're very focused right now on trying to offer fractional FTEs. So it's very likely that Saint John's Prairie doesn't need a full time cardiologist. Maybe they need two days a week. Maybe Newport needs a part time urologist. We are working hard right now to figure out ways to do that. We'll have shared recruitments, and I think this is important for a lot of the young doctors that are graduating now. They like to have an academic medical center as part of their anchor, as part of the work that they do. They wanna have that academic focus. And so we can provide that, but have them have a great practice part time in other parts of Vermont. They can also bring medical students with them and residents when it makes sense who might wanna settle down there and and live there and bring their families there. We're in active discussions right now with Gifford, North Country, NVRH, Brattleboro on bringing more physicians to them. It will not be tomorrow. We have to recruit for some of these physicians. We have to find the right person who wants to do that, who wants to drive over Sheffield Mountain when they have to. And there are people out there that want that, but we're hard at work on doing that right now. We are committed to that. I wanna make sure you hear that we're not pushing services on anyone. We're hearing what they want and need. We're evaluating if we can deliver that. We're gonna be there for what they're asking for, not what we wanna put there. And there's a lot of good work going on there. Key opportunities in front of us. I wanna say, I've said this to you before, I do believe that a a broad system electronic medical record will make that work easier. Asking providers to know how to use three or four different records is hard, and there is some ability to eliminate duplication of testing and certain services by having on one. I do know not all Vermont hospitals wanna move to one. I don't think we should force it. I think we should bring along the willing, and we should figure out ways to partner with people who wanna stay on the system they're on. I get it. I've been through a couple EMR go lives. It's really challenging. As I've said, we're working hard to bring services to other hospitals across the state. I think that's regionalization of care. I think that's going to be very good for those patients, but good for those hospitals. They need doctors to provide care and take care of people there. I think it'll be good for their budgets. And I do think overall, it'll help moderate the cost of care in Vermont if everyone doesn't have to come into Burlington or Dartmouth. Transportation is a key part of this. We do have a transportation center in Burlington. Dartmouth has one as well. I want you to know we talk with Dartmouth multiple times every day on how to move people around. I think we have a pretty good system for when you're really sick, and we have a bad system for everything else. So if you need a helicopter today, we we'll get you. Especially today, it's pretty clear. But if you need Sean's grandmother to get to her appointments, it's pretty broken. Getting people to dialysis, things like that. I wanna be honest, that's harder to solve, but part of the system that we are trying to figure out how to do better. Also importantly, workforce pipeline. We know we need to grow more respiratory therapists, x-ray techs, nurses. We need people to move from LPNs and nursing to nurse practitioners, people that start out maybe as ER doctors and the CEOs someday. I don't know if that's a good idea or not. But we wanted to have a plan where we can move people up through the ranks, and we're working very hard on that at the medical center. We have a lot of programs. We have grants. We just graduated 31 nurses through a grant program. All three of them was just part of their commitment was to help train more nursing students. I just saw them on the floor last week. Each one of those nurses has four students with them. That expands the number of nursing students we can get in clinical environments. Finally, I wanna mention that we're building a stronger relationship with Blue Cross Blue Shield. I talk with Beth Roberts regularly. I spoke to her this week. We are committed together in our responsibility to improve the cost of care for Vermonters. I want us to be very focused on utilization, how sick people are, and the actual cost of the services we provide, and they have to work on the premiums that allow that work to happen. But we are both very focused on this, and our teams are talking regularly in new and better ways than in the past. So in closing, I wanna thank everyone here for helping be part of the solution. I thank my colleagues on the work that we're doing together. Wanna thank Vas for bringing the hospitals together. We're committed to doing better for Vermonters. Thank you.

[Speaker 0]: Thank you. And, you know, it's it's really refreshing to know that we've turned a corner. UVM was under considerable scrutiny and pressure over the last few years. And before we go to questions, I'm just gonna please send your testimony.

[Sean Tester, CEO, Northeastern Vermont Regional Hospital (NVRH)]: I will.

[Speaker 0]: That would be great. Yes. I do have one question, and then we'll go over to rep I do. So I'll ask my first one and

[Rep. Alyssa Black, Chair, House Health Care Committee]: then

[Speaker 0]: we'll So go one of the things that I've heard from Beth Roberts is how hospital centric our care is. And it goes to the question I asked earlier about integration of community services and really keeping hospitals for what hospitals need to do when people are really sick, acute care, and understanding also that hospitals need to survive. So the balance between having acute care and some other types of care and working with community based services is critical. How is UVM looking at that? Now, is really the forward looking question.

[Dr. Stephen Leffler, President, UVM Medical Center (and UVM Health leadership)]: First thing I want to say is UVM Health, me, I support people getting care at whatever site makes sense for them that meets their care needs and that's more affordable if they can get it there. I have a good relationship with Green Mountain Surgery Center. We talk regularly with them about what they're doing. They're pretty full. In Burlington, if people if the MRI can get an open MRI meets the need their care needs and is cheaper than what we can do, we support that. What I would say in very rural places, Vermont with small populations, oftentimes the hospitals end up carrying certain services because they're the only site that will do uninsured, underinsured, Medicaid. And so we oftentimes do things to make sure that population gets served. If there's ways that others can do that more cheaply, especially for UVM Health, I'm totally focused on that. I talk regularly with community health center Burlington and Howard. We have programs going on with both of them right now. This week, I talked to about program for how to keep some of their patients appropriately out of the ear, and they don't need to be there. Excuse me. And we're working on health care costs for Howard. So we are partnering with our local agencies, and I support people getting care as cheap as they can, as long as it's the right they really need the right MRI, the right scan. I could have seen that not always be correct. Excuse me.

[Rep. Alyssa Black, Chair, House Health Care Committee]: My question is a little more philosophical than anything. I recently attended a talk that you had with Senator Sanders, And I was stuck in your comments today. At the outset, you were referred

[Speaker 0]: to as the healthcare czar of

[Rep. Alyssa Black, Chair, House Health Care Committee]: the state of Vermont.

[Dr. Stephen Leffler, President, UVM Medical Center (and UVM Health leadership)]: We give it to Michael Costin.

[Rep. Alyssa Black, Chair, House Health Care Committee]: You have a really big job. UVM Medical Center, UVM Health. I know we're not network anymore. Should UVM be responsible for all these things that you're trying to do? Should you be the one staffing part time positions in Newport? Should UVM be responsible for dialysis across the city. I worry, and I know it's not consolidation, but I worry that we're infiltrating the entire system of care with UVM and it will lead to maybe not financial consolidation, but more of a that the whole state becomes a network. And we learned. You know, you can use dialysis as an example. When we make UVM responsible for staffing and supporting the rest of our system, the moment, and I'm not saying acute, the moment UVM needs to make reductions, they can just say, yeah, we're not going to do dialysis anymore there. And I'm a little worried about that. I don't, I think you do a wonderful job, but you've got a big job, and I'm not sure I want you to be the czar of healthcare in the state of Vermont.

[Dr. Stephen Leffler, President, UVM Medical Center (and UVM Health leadership)]: Let me start with that.

[Rep. Alyssa Black, Chair, House Health Care Committee]: I'd like to, so my goal is be concerned.

[Speaker 0]: I'm going to say the Senate is on the floor at 11:30, and we have begun a significant conversation that I think is important. Then we have one more question, and then we have Michael Klausner.

[Dr. Stephen Leffler, President, UVM Medical Center (and UVM Health leadership)]: I'll be really brief. I don't think I should be the health care czar either. And I laughed when he told me that. It takes all of us together, which is what I said there. I said, actually, it's gonna take all of Vermonters. I will tell you this. Vermont has 635,000 people. Many health care, big academic systems manage all the services for a population of 635,000. In Vermont, we break it up into multiple areas. I took this job for only one reason. I wasn't seeking this job. I took this job to make health care better for Vermonters. My only reason for doing it. I can't do it alone. I never thought I could do it alone. I wanna be here in service to Vermonters. I want UVM Health to be in service of Vermonters. I wanna offer what people are asking us, force nothing on anyone. I think as a system, we can make it better. I think there are many things we've learned where our partnership does help, like dialysis, and there's other places where we shouldn't grow. So I'd love to come back and further this conversation. I think it's a really important one. And so I I appreciate the question a lot.

[Speaker 0]: I think that's one of the driving considerations with having hospitals in other parts of the state be engaged in transformation. And so all of this together is a really good question. That's Lieutenant Garofaun. Oh, Goldman.

[Rep. Alyssa Black, Chair, House Health Care Committee]: I can't say so.

[Rep. Leslie Goldman, Member, House Health Care Committee]: Thank you

[Speaker 0]: thank you for your testimony. I was struck by when you mentioned the nursing and building your nursing workforce, we could present you a budget that is cutting AHEC and VSAT. You may not want to answer this because it's probably not information that you're aware of, but I am curious to know what you and the people that you work with think about the implication of cutting those programs on building your workforce at your center and statewide. But you may not want to answer that now, but I'm curious.

[Dr. Stephen Leffler, President, UVM Medical Center (and UVM Health leadership)]: I'm honest that I haven't read those bills carefully. I believe internal pipelines to grow our workforce is critical to our future. So I can't answer the specifics. I'm sure you want to move on.

[Speaker 0]: We have to move on. This is the beginning of our conversation, but I think the work that you're doing is extremely helpful to the state and to patients in particular, and reducing costs, improving access. So I get it. And what you didn't talk about was your telehealth work. And I know that that's been going on for thirty years, having a doc in Burlington work with a doc in Newport.

[Rep. Alyssa Black, Chair, House Health Care Committee]: You. Thank

[Speaker 0]: you. Michael, you are here.

[Rep. Alyssa Black, Chair, House Health Care Committee]: Thank you for being here.

[Michael Costa, President and CEO, Gifford Health Care]: Good morning. Michael Acosta, President and CEO of Gifford Healthcare. I understand that we're on the clock, so try to be brief. For those who may not know, Gifford Healthcare, we're unusual in a way. We are a 25 bed critical access hospital. We're a federally qualified health center dedicated to serving Vermonters regardless of ability to pay. And we have a retirement community with a 49 bed independent living campus, a 30 bed nursing home, and an adult day care. When I hear policymakers talk about trying to shift care out of the hospital to get people to the right place at the right time, that's part of what we do. Because we are a miniature health system located between Dartmouth and UVM, with location throughout Central Vermont from Sharon to Berlin. Thank you for having me here today. Like my colleagues, I want to thank you. This is hard. Vermont's health care challenges are real and complex. And if all of us had done our jobs very, very well, we wouldn't be sitting here talking about how to improve this much this fast. And so I know you're up here every day working to make the system better. You passed bills that have improved the system over the last year, and I think you're starting to see results. And so I just want to recognize that it's a serious time, and these are serious problems, and we appreciate how you've been tackling them. I think that's why today matters. As you know, as policymakers, there are times where we talk and talk and talk and talk and maybe even we study something. But right now, it seems like a time for action. My observation, particularly having worked both in Vermont state government and in this building and on the outside in the health care field, is that there's a real shared sense among policymakers, regulators, and health care leaders that we need to act now. And I think the evidence that you're starting to see is that we are taking action, and we are improving our health system. And I want to talk a little bit about Gifford's story to demonstrate two points. One, we get it. I feel like when I talk to Vermonters that Gifford serves, our community leaders, and our teachers and policymakers, they wonder if hospital CEOs get it. I think we do. And then it's okay, what are you going to do about it? So let's talk a little about Gifford's journey. Gifford is all in. And I think our other hospitals are as well. I do think we can make progress if we focus on the fundamentals and we keep moving together in a sustained fashion. I don't think this is just an idea. I think it reflects Gifford's lived experience since the Oliver Wyman report. Gifford was in a very difficult place in 2024 when I came on starting in October, right as the Oliver Wyman report came out. The report really questioned the future sustainability of Gifford Healthcare and several other hospitals. And Gifford was confronted with years of quite large financial losses. And so what I said to my team is that we need to work on two things. One, how are we financially sustainable? Because you can't ask taxpayers and ratepayers and people who get their insurance on the exchange to pay more and more each year. And then you need to ask a really important second question. How are you going to be important to Vermont's health care system? It's not enough to run your little shop the best you can. You have to figure out how to reach out and make this place a system. And so we've taken that charge really seriously. And it wasn't the answer wasn't to do everything. It's really to say, okay, how do we get patients to the right care at the right place at the right time, and more and more at the right price? And then how do we share resources with other health care institutions so we're all operating more efficiently? I think for us, it's producing results. It starts with really simple observations. When I started at Gifford, our hospital, the inpatient unit, did not have a lot of people in it. We couldn't help but notice that Dartmouth and UVM are full all the time. So we started with a conversation with Dartmouth and said, we're not part of your network, but how do we help? And Dartmouth and UVM have both been really gracious. We've never talked about whether we're an affiliate or whether we're inside their network. It's always about how do we get people to the right place at the right time. And so over the last year, we've doubled our average daily census from about eight people inpatient to 15 or 16. And right now, we're building towards 20, within our cap is 25. And it's doing that work every day of saying, look, the academic medical centers like UVM and Dartmouth, they can take care of some really amazing things. But there are simple things that we can take care of. And that's a win for them, a win for us, and most importantly, a win for patients who want to get care close to home. We also had another simple observation. We can't do this alone as small health care organizations. We need friends. And so beyond partnering with Dartmouth and UVM to try to get patients to our hospital, we've joined what's called the New England Collaborative Health Network, which is all the small hospitals in Vermont, but some of the FQHCs and home health agencies, and a hospital from New Hampshire and New York, trying to get the benefits of being a bigger organization without sacrificing your independence. And we've done some really basic things. We now all share business insurance. We now have a shared risk pool for health insurance. We now do all of our group purchasing together. It was part of this that allowed us as Gifford to come to the Green Mountain Care Board and have a budget that was 2.7% less than the year before. And for me, a lot of times, I think in health care reform, we have a bias towards some sort of big grand vision, how we change everything all at once. I coach a lot of baseball. You can win hitting home runs. It's easier to hit singles and not make errors. And so we've been trying to do these little common sense things, and they've allowed us to succeed. We have reduced administrative costs, we've shrunk staff, we eliminated two service lines that we thought other people could do better, And we've reduced clinical staffing by 15% while seeing more patients. We've done that because we realized our schedules really didn't work for our patients, and they didn't work for our clinicians. This is slow and somewhat boring work, but it's really essential. And so when Kaufman Hall says you can save $100,000,000 it's by looking for these types of efficiencies. Consolidation and regionalization and transformation is a conversation worth having, But it's easier to count on savings within your own buildings by making operations better. And so that's what we're trying to do. In Gifford's case, our financial picture is stabilizing. Our days cash on hand has gone up. We've been cash flow positive for seven months. We even posted a positive operating margin in October. And the Green Mountain Care Board approved our budget without changes for this fiscal year, which we thought was an important sign of credibility and that we're on the right path. And then like my peers, we're also investing in our own workforce. We're not waiting for someone else to do that for us. We started a nurse residency program where we took eight local graduates and put them into our hospital. We've been able to reduce the number of traveling staff. We're also working on what's called the Maple Mountain Consortium, which would be a family residency program. You know, that it's a small slice of what we're trying to do. And we have a conversation on Monday with the UVM Health Network about how we might share specialists. We have a conversation Monday afternoon with Blue Cross Blue Shield about the fact that, hey, we have space in our operating rooms. How do we get people there at the right price? Because like Steve, we want people to get the right care at the right place at the right time at the right price, so we can maintain our system and make health care more affordable. And then also the New Collaborative Health Network is asking what's next? We started with insurance. And now, we started with purchasing. What's the next thing that we can do together? What's the next common sense step? And so for us, we think we have a story of what can happen when you take a common sense approach that asks the question of what's best for the patient, while not being tied to building all your own stuff. We need partners, we need to share, we need to do a good job. Anybody who lived through tropical storm Irene in Vermont knows the power of Vermonters when there's a real problem. Anybody who lived through the flooding around here over the last couple years knows the power of Vermonters when we come together. I think the current moment in health care is every bit as dangerous as a tropical storm or flood, but it's hard to recognize it as such because it's so slow moving and persistent. But if we come together without a lot of ego about what it means for our organization, I firmly believe we can accomplish great things. And then I also would note that, you know, from my perspective, it's really about having a sustained direction over time. As a healthcare leader, you think you have a good idea until you show up at the nurses station. The nurses will tell you very quickly whether you have a good idea or not. So all you really have is your credibility. Do they believe you? Do they trust you? If we zigzag directions all the time, it's hard to maintain that trust and credibility. I think if we can find a lane together as policymakers, regulators, healthcare organizations, insurance companies, we can make the changes that are necessary to improve the market. I know time is short, I'd be happy to answer any questions you might have.

[Speaker 0]: Oh, thank you. You've actually identified one of my pet peeves, and that is we spend so much time focusing on what the problem is, we don't focus on the solutions that are all the little mini solutions that are within that.

[Michael Costa, President and CEO, Gifford Health Care]: Oh, I appreciate that. And representative Black asked a really good question about a job I have no interest in doing being the healthcare czar in the state of Vermont. But I will tell you when people ask, what's it like to be CEO of a hospital? I say, number one, it's a great privilege. It's like being mayor of Health Care City, and it's so much fun. But it's also like being the head coach of professional sports team. You're in charge, but nobody buys a ticket to see you. They want to see the doctors and nurses and nurse practitioners and APRS. So these organizations can only go as far as their clinical teams want to go. And between the financial pressures to save money, and the fact that clinicians like to work together in groups, there's just a lot of momentum towards sharing things with academic medical centers, whether they be Dartmouth or UVM. It's not just an administrative thing, our clinical teams push us in the directions of connection and resources and training. And as a smaller institution, you can't do that on your own. So it's just an additional piece of momentum that pushes us towards the type of integration that a health network has. So I thought it was a great question. I just want to offer 2¢ on it.

[Speaker 0]: Oh, thank you. It is a question, I think, that's on our minds all the time, but it's also a question that only you guys can answer, I think, the way you've had. It's very helpful. So, of course, we're now on the floor in the Senate, but are there any Yes, Representative Berbeco? Forgot your name. Apologize.

[Rep. Daisy Berbeco, Ranking Member, House Health Care Committee]: Appreciate so much your recognition of the severity of the problem, and and your analogy of of likening it to a natural disaster is a good one, but this is definitely a man made disaster. I wonder if for both you and Doctor. Loeffler, who are new in your roles since the Oliver Wyman report came out, that report did highlight excessive administrative spending, including executive bonuses and salaries. Did either of you stepping into your new roles change the way that executive salaries and bonuses are structured?

[Michael Costa, President and CEO, Gifford Health Care]: Speaking for myself, there was no bonus structure offered to me when I took the role. And when we talked about compensation going forward, because the board of directors that I serve under has taken the message loud and clear from the Green Mountain Care Board that executive compensation matters, I made it very clear that we're not going to have a bonus structure. And so we just we did not we do not have one, we did not implement one, we have no plans for one. I do think there's a lot of pressure to cut costs outside of the clinical space, whether for executive team members or otherwise. And in my first three months, we cut several senior positions and other administrative positions to try to reduce costs. And we'll keep trying to trim that back as best we can.

[Sean Tester, CEO, Northeastern Vermont Regional Hospital (NVRH)]: Thank you.

[Dr. Stephen Leffler, President, UVM Medical Center (and UVM Health leadership)]: Unique M Health will be paused instead of compensation '25 to '26. Right now considering it's going to move forward or not for '27. We cut $8,100,000 of administrative leadership expenses right after I took over in September.

[Rep. Daisy Berbeco, Ranking Member, House Health Care Committee]: Good job, thank you.

[Speaker 0]: And then you're all talking about the Oliver Wyman report, and I think back to the uncertainty that existed in the rooms when the public hearings were, meetings were held across the state, and the discomfort that was felt across the room when the Oliver Wyman report was considered in my own district and in other districts. And now we're seeing the benefit of your work and listening. I mean, we have to say thank you for listening to the work that we've done in this building, but also that the Free Mountain Care Board is doing and that was within the Oliver Wyman report that really is setting us in a new trajectory and direction. Thank you for all of you and thank you for being here today. This is really, I think we've heard a lot, we have a lot more questions, we'll continue to have concerns, but your last comment about collaboration and working together is absolutely key because we cannot do it alone.

[Michael Costa, President and CEO, Gifford Health Care]: And I would just, for one second, I'm a radical transparency guy with my own team, and we've talked about Oliver Wyman a lot. And at the end, when the story of Gifford is told, we will refer to it as a difficult gift. While we may not have agreed with everything in that report, it forced us to accept that we have to change. And that's allowed us to get really excited and creative about the future. So thank you.

[Speaker 0]: Thank you all. So we're gonna

[Sean Tester, CEO, Northeastern Vermont Regional Hospital (NVRH)]: call it a wrap.