Big Plans for Fletcher Allen Health Care

Fletcher Allen Health Care wants to raise $44 million more next year to operate and continue investments in health reform initiatives, add 282 full-time positions and begin planning for a new building that would allow the hospital to replace about a third of its 373 inpatient beds now located in four buildings.

These proposals were included in budget documents the medical center in Burlington submitted to the Green Mountain Care Board in July. The board has authority to approve or order changes to the budgets of all the state’s hospitals. Budget hearings are set for Aug. 27-29 with the board scheduled to make its decisions by mid-September.

The board set a 3 percent cap on the budget growth it would allow for the hospital fiscal year that begins Oct. 1. In late July, the board reported that collectively Vermont’s 14 hospitals met the goal by requesting an average 3 percent increase in net patient revenues.

Fletcher Allen, however, proposed a 4.9 percent increase in order to carry out its ambitious reform initiatives plus cover routine inflationary rises.

At the upcoming hearings, the medical center will have to make a case not only for exceeding the 3 percent cap, but for exceeding it by more than 1 percentage point, which was a limit set by the Green Mountain Care Board if the extra spending met certain requirements. The board said extra spending had to result in reformed health care delivery.

“We are trying to be very responsive to the health care needs of our community and meet the state’s and our objectives in this era of health care reform,” Dr. John Brumsted, president and chief executive officer, said of Fletcher Allen’s budget proposal. He noted that the hospital is financing some changes that benefit the whole state.

“We believe that is the right thing to do and have been willing to shoulder that responsibility,” Fletcher Allen’s budget narrative states. Being held to a 1 percent increase for reform would slow the hospital’s progress on those projects.

Making a case

Brumsted said he plans to argue that the extra revenues — above 3 percent — are for “what we believe are essential investments.”

Those include finding ways to integrate operations at the four hospitals that make up Fletcher Allen Partners — Fletcher Allen, Central Vermont Medical Center, and two New York hospitals. Seven councils are looking for administrative and clinical opportunities in areas such as planning, finance, physician leadership and human resources, the hospital’s budget document explains.

Fletcher Allen also partnered with Dartmouth Hitchcock Medical Center in New Hampshire to form OneCare, an organization participating in a Medicare Shared Savings Program. Under this program, providers are working on delivering coordinated care to 47,000 Medicare patients to improve health outcomes and reduce costs. Providers could share in savings if medical care ends up costing less than projected, but they also must achieve quality of care benchmarks.

“We are in a transition phase from being paid for our services per episode,” Brumsted said. “With payment reform, a key component of health care reform, we are going to be managing care in very different ways. Many of the investments we are making are setting us up for this future state.”

Brumsted will argue, too, that the proposed staff increases “can be tracked back to support a new business mode for health care.” For example, he said some of the 282 new positions will be in information technology which is critical to many care and efficiency initiatives. Other new slots bolster OneCare and at least 30 will assist physician practices affiliated with Fletcher Allen in “transforming primary care,” another of the medical center’s health reform initiatives.

Brumsted noted that proposed reform investments account for 2.2 percentage points of the 4.9 percent increase in the medical center’s budget. That means the operational increase can be pegged at 2.7 percent — underneath the board’s 3 percent target.

In addition to submitting operating budgets, hospitals also share their capital spending plans with the Green Mountain Care Board.

Fletcher Allen has big plans. In addition to $47.9 million in routine capital spending, the medical center has $72.7 million in projects next year. And that doesn’t include funding for the $126.9 million new building since construction is at least a year away.

Next year, Fletcher Allen wants to relocate its mother-baby unit, which has a $15.8 million total price tag, but the total cost wouldn’t be covered next year.

It proposes replacing two of three catheterization labs, spending $3.6 million on the $5.6 million project next year.

About $5.7 million would be allocated toward an $8.7 million data center upgrade.

The biggest chunk of next year’s capital spending would be the $42.1 million set aside for proposed acquisitions of properties that the hospital now leases.

And there’s $4 million to plan the new inpatient building.

Only 42 percent of patient rooms at Fletcher Allen are private, 46 percent are doubles and 12 percent are multi-bed rooms. Having more than one patient in a room presents challenges for maintaining privacy and preventing infections, Brumsted said.

In addition, he noted that the rooms “aren’t big enough to get all the equipment in. Frequently we have to move patients to get services.” That’s not only inconvenient, he said, but adds expense.

Fletcher Allen suggests in its conceptual certificate of need application that it foresees constructing a multi-story building with 128 single patient rooms on four floors on a site adjacent to the emergency department on the west side of the campus.

“While making these capital investments may seem contradictory to our stated goal of bending the cost curve,” medical center officials argue in the budget that it is important to have the “appropriate infrastructure” that ensures medical treatment meshes with the other transformations underway in health care.

DME Billing Service
Provider of Professional
DME Billing Services

DME Billing News Feed:

DME Billing Services MedBill Twitter 
DME Billing Service News

Retrieved From: