Vermont’s largest hospital system announced dozens of layoffs this week as part of a plan to cut nearly $185 million in spending by the end of next year. It’s an effort to rein in ballooning health care costs in the state, which are among the highest in the country.
“We’re committed to examining our role and taking action to reduce expenses that influence health care costs,” Dr. Sunny Eappen, the CEO of the University of Vermont Health Network, said in a press briefing Tuesday.
Hospitals in the state account for nearly half of the state’s total spending on health care, and UVM Medical Center in Burlington, part of the health network, is by far the largest hospital. It’s responsible for more than half of all hospital revenue and is one of the largest employers in the state.
The health system said it will layoff 77 non-clinical positions across the organization, including in finance, patient registration, human resources and information technology departments over the next few months. The organization also announced it will not fill dozens of vacant positions, in total expected to save more than $5 million.
Some layoffs are effective immediately, while other employees will stay on until September, according to a hospital spokesperson. The health system is offering impacted employees transition support, including opportunities to pursue other available roles.
More from Vermont Public: Vermont’s largest hospital says it’ll cut insurance rates by 8%
Earlier this month, the board of UVM Health Network also announced it would not give bonuses to any executives this year, expected to save up to $10 million. That came after UVM Medical Center and Central Vermont Medical Center in Berlin announced they would cut commercial insurance rates by 8% and 3%, respectively to comply with budget orders from state regulators.
After budget orders last year, the health network announced a range of cuts to patient services, including the closure of the in-patient psych unit at Central Vermont Medical Center and primary care clinics in Waitsfield. This year, the hospital has not proposed any further cuts to patient services.
In addition to layoffs, the health system will reduce its capital budget for next year by $70 million by delaying work on infrastructure that needs maintenance and pausing new construction projects. That includes waiting on planned renovations in the emergency department at Porter Medical Center in Middlebury and a garage expansion at UVM Medical Center in Burlington, according to Eappen.
More from Vermont Edition: UVM Health Network CEO Sunny Eappen on hospital spending
The hospital also announced a number of initiatives to improve clinical efficiency. That includes reducing the length of stay in the hospital and emergency department for certain conditions. Hospital leaders said they plan to reduce unnecessary testing and imaging, and want to standardize medications and medical devices used across the health system.
“We're going to change the way we work,” Eappen said. “We've been pushed to do that, because we don't really have another choice.”
