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State starts review of hospital budget plan

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Posted on August 16, 2012 |
By Andrew Stein



MIDDLEBURY — Porter Hospital officials are asking state approval for a fiscal year 2013 budget of around $69 million, including a 4.2-percent increase in net revenues and a boost of 5 percent in the rates charged for medical procedures.

“Two of the major elements of our budget for next year are improving access to primary care via our network of physician practices, and successfully completing the implementation of our new integrated health information system both within the hospital and throughout our practices,” Porter Hospital President James Daily said in noting some of next year’s biggest financial drivers. “These investments are significant both in terms of dollars and in terms of how vitally important they are to serving our patients and preparing for the future.”

Porter joined the state’s other 13 hospitals in submitting fiscal year 2013 budgets to the Green Mountain Care Board (GMCB), which is now soliciting testimony on the spending plans. The GMCB is expected to make decisions on the hospital budgets by Sept. 17.

Ron Hallman, Porter’s vice president for development and public relations, said the hospital’s proposed rate increase of 5 percent is lower than the system average of 8.1 percent, as reflected by the 14 budgets the GMCB will spend the next month scrutinizing. The requested rate increases range from zero pitched by the Northwestern Medical Center to the 9.4 percent being floated by Fletcher Allen Health Care.

Hallman, in a press release, added that Porter’s proposed rate increase is lower than what the institution pitched (and received state approval for) during each of the past three years. Those approved rate increases were 10.3 percent in fiscal year 2012, 6.5 percent for fiscal year 2011 and 6.7 percent for fiscal year 2010.

The requested operating budget of $69 million is up from this year’s spending plan of $65.9 million and would provide Porter Hospital with a surplus of $949,000, according to Hallman. This is money that the hospital would be able to reinvest in itself to improve services, according to Daily.

Porter Hospital has 445 full- and part-time employees. This includes physician practices and their respective staffs.

Vermont hospitals’ financial officers have again this year been able to get some budgetary breathing room thanks to Act 128, the state’s health care reform law. The law allows hospitals to exempt from their budget proposals items such as investments in primary care that can be proved to be budget-neutral; new costs related to capital expenditures approved last year (such as the new Porter health information system and electronic medical records project); and increases in the annual “provider tax” imposed upon hospitals by the state.

The Green Mountain Care Board has established a system-wide “target” increase of 3.75 percent for net patient revenue for hospitals for fiscal year 2013. Porter’s projected increase is 4.2 percent.

In addition to the significant investment that Porter is now making in a new health information system, the hospital has successfully recruited several new primary care providers, who will be joining the medical community during the next few months. This will help open up new patient slots, as every Porter primary care practice is currently closed to new consumers, who must now look for such services outside of the county.

Daily said Porter Hospital’s health information system upgrade is now under the direction of a project manager. Once completed, the new system will feature a comprehensive database of patient records and other vital information that will be able to be shared electronically within the Porter Hospital system and its various practices, and with other health care organizations with which the patient does business.

“We have ‘gone live’ with four practices and our timeline is to go live with the balance of our practices by early 2013,” Hallman said.

Daily said hospitals will increasingly need to convert to new technology to improve efficiency and patient services.

“It will change things a lot,” he said of the hospital’s health information system.

“Taking a practice from all paper to all electronic is a pretty big step,” he added. “It’s going to redefine the work flow and the jobs that people do. It is essential if you want to do some of the things to improve coordination and communication around care… ”

Reporter John Flowers is at johnf@addisonindependent.com.

 

 

 

 

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