With just 19 beds, Grace Cottage is the smallest hospital in Vermont and one of the smallest in the country. Its primary care facilities are comprised of two houses that were gifted to the hospital and date back to the 1840s.
Despite its ultra-modest size, the 76-year-old hospital and its staff are a bright light in the country's troubled rural healthcare system. Grace Cottage will finish fiscal year 2025 in the red, as it did last year, but its CEO Olivia Sweetnam says its financial standing has significantly improved over the past year.
The Green Mountain Care Board approved Grace Cottage's budget for the coming fiscal year and waived the need for a budget hearing. The hospital's administrators saw this as a significant stamp of approval in a year in which regulators cut nearly $95 million from other Vermont hospitals' proposed budgets.
Sweetnam joined Grace Cottage as its chief nursing officer in February 2024 and became CEO five months later. She now holds both titles. Wearing multiple hats is common at Grace Cottage — for example, its chief medical officer is also a practicing hospitalist.
Doubling up on roles and eliminating vacant positions are two of the ways in which the hospital has cut costs over the past year. It also no longer relies on expensive contracts with traveling nurses. "That, I think, is unique in the state," Sweetnam said, "and saved a lot of money."
Sweetnam also credits Grace Cottage's culture for its ability to stay afloat during the current health care crisis. "What we do really well is give our providers and nurses the time and the flexibility to really get in there with the patient," she said. "There's not this kind of intense medical hierarchy or aggressive culture that I have seen in other places. It's a real feeling of safety and concern for each other that I think then really translates well to the patients."
Grace Cottage will embark on a number of improvement projects in the coming year, including safety upgrades in its 24/7 emergency department. It received a state grant to install new security cameras and shatterproof glass. It also recently gained Act 250 approval to construct a $20 million clinic building. Fundraising is still underway, but Sweetnam said they plan to break ground next year.
Grace Cottage relies more on local donations as compared to other hospitals in the state. Local donations made up about 8% of its revenue in 2023.
Though it sustains strong community support, the small hospital still faces big unknowns due to upcoming cuts to federal health care spending. Sweetnam said she's trying to stay focused on what she can control.
"Grace Cottage treats everyone, no matter of their ability to pay. We do have a sliding scale for those who are uninsured or under-insured," she said. "So we're here for the community. It's going to be an interesting next few years."
Broadcast live on Monday, Dec. 1, 2025, at noon; rebroadcast at 7 p.m.
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