Hospitals report runs into furor over ‘major restructuring’ recommendations 

Analysis plunged state’s healthcare system into anxiety, uncertainty

By Peter D’Auria/VTDigger

Last month, a consultant released a sweeping report recommending significant changes for Vermont’s healthcare system, including “major restructuring” at four community hospitals.

The 144-page state-commissioned document details a series of steps that Vermont’s hospitals should take to stay afloat, including repurposing inpatient units and downgrading emergency departments at some facilities.

State healthcare officials have repeatedly said they have no plans to close hospitals or force them to restructure. However, the report has nonetheless plunged much of the state’s healthcare system into anxiety and uncertainty.

Moreover, over the past few weeks, hospital leaders have raised concerns about what they say is inaccurate data in the document. This controversy has added to the backlash against the recommendations and could complicate efforts to implement them. 

Michael Del Trecco, the president and CEO of the Vermont Association of Hospitals and Health Systems, said in an interview last week that the report should be retracted because of faulty data. The hospital association released a detailed press release Tuesday, Oct. 29, showing discrepancies between its data and the figures used in the report.

“I don’t know how any analytical person or operational person would say, ‘Oh, these recommendations were based on sound footing’, ” he said.

‘Not rounding errors’ 

The report in question stems from Act 167, a 2022 Vermont law that mandated an assessment of the state’s hospitals to find ways to keep them financially sustainable.  

The state commissioned a $1 million study from the international consulting firm Oliver Wyman to conduct that assessment. Bruce Hamory, a physician and healthcare consultant there, spent roughly a year collecting data and meeting with Vermont communities and healthcare organizations before releasing a final report last month. 

That report laid out a dire prognosis for Vermont’s healthcare system. The consultant found that most of the state’s hospitals are operating at a loss and would operate more efficiently if they consolidated different categories of medical care at certain hospitals. The report recommended pervasive changes at four hospitals: North Country Hospital, Gifford Medical Center, Springfield Hospital, and Grace Cottage Hospital.

Those proposals quickly sparked a fierce backlash, which has only grown since the accusation of inaccurate data. 

In its press release Tuesday, the Vermont Association of Hospitals and Health Systems compared discrepancies in the final consultant’s report to the hospitals’ own data. 

Hospitals almost uniformly reported higher numbers of discharges — meaning more patients treated — than the consultants’ report, with differences of up to 83%.

For example, Porter Medical Center in Middlebury recorded 21,568 patient discharges from the emergency department in 2022. The consultant’s report, however, recorded only 11,876 discharges for Porter that year.

That same year, Mount Ascutney Hospital and Health Center reported a total of 858 inpatient discharges, according to the hospital organization data. The consultant’s report, meanwhile, recorded only 142. 

“These are not rounding errors,” Del Trecco said. “These are major missing components of our services that are delivered to Vermonters.” 

‘We stand by it’

Hamory, the Oliver Wyman consultant who led the report, pushed back on those criticisms saying the discharge data in the report was pulled not from the hospitals’ own figures but from the Vermont Health Care Uniform Reporting and Evaluation System (VHCURES). That dataset does not include the complete number of actual discharges from hospitals but contains claims data: figures showing medical claims paid by private insurance, Medicare, and Medicaid. 

VHCURES is an incomplete dataset that includes only 60% of Vermonters on private insurance plans.    

Hamory acknowledged the data’s limitations. But he said that since the report focused on the financial state of Vermont’s hospitals, examining claims data made the most sense.

“The reason for it is that it is the most reliable data that exists on those numbers for financial purposes,” Hamory said.

 Hamory said hospitals were presented with the data before the report was published and were given the opportunity to weigh in. 

Despite the limitations, the report’s financial modeling—which projects that, without action, Vermont’s hospitals will rack up a combined deficit of $700 million to $2.4 billion below their break-even point by 2028—is still sound, Hamory said.

“This data gathering and analysis took a year,” he said. “It was not done overnight. It was not done without multiple discussions among various experts and other people doing data analysis. And we stand by it.”

But Del Trecco of the hospital association said that those discrepancies invalidated the document’s conclusions. “If you’re missing a significant amount of utilization [data], how could you move forward with a recommendation to say, ‘Stop doing X service, shift inpatient service, close your emergency department?’” he said. “It seems very flawed.”

Now what?

The task now falls to the Agency of Human Services to work with hospitals on the recommendations in the report. 

State officials are meeting with hospitals to discuss the report’s proposals, Brendan Krause, the Agency of Human Services’ director of health care reform, said. The state is also seeking a contractor to provide technical assistance to help hospitals with “localized transformation planning,” according to a request for proposals that closed last week. 

Krause noted that the path forward for hospitals may look different from the recommendations in the report.  “The report was well thought out, and a lot of effort went into it, but it is just a report,” Krause said. He emphasized that the state will not force changes on any hospitals.  “I think the important message is that we want to work with hospitals,” he said. “We’re not going to do things to hospitals.”

Even so, the past few weeks since the release of the consultant’s report have been a period of anxiety at local hospitals.

At Gifford Medical Center in Randolph — which, the report said, should halt non-emergency births and replace inpatient units with geriatric or mental health facilities — Michael Costa, the president and CEO of Gifford, said the proposals are causing anxiety for employees, prospective employees and clients.  

Costa said several staff members have resigned because of uncertainty and several candidates for open positions have dropped out of the hiring process for the same reasons.

“Excellent staff members are what makes health care go,” Costa said. “And so losing people or losing recruits because of the report is a tough blow for the community.”