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Reporter Debrief: As COVID-19 Spreads, Hospitals Face Financial Woes

The exterior of Springfield Hospital, with a person walking toward the entrance carrying bags
Howard Weiss-Tisman
Springfield Hospital was one of six Vermont hospitals that lost money last year. Now, state and hospital officials are worried about financial viability at other facilities amid COVID-19.


Even before the COVID-19 pandemic, some of Vermont's hospitals were having real financial struggles. Now that hospitals are on the frontlines of the public health crisis, their financial picture is growing increasingly grim. 

Springfield Hospital recently got an emergency $1.3 million lifeline from the state, and other hospitals are even laying off workers and applying for lines of credit to keep their doors open.


VPR's Howard Weiss-Tisman has been covering this issue and spoke about it with VPR All Things Considered host Henry Epp.


Henry Epp: Could you first remind us of how smaller hospitals in Vermont were doing financially before the new coronavirus showed up here? 


Howard Weiss-Tisman: About a year and a half ago, the news came out that Springfield Hospital had lost about $14 million over the previous two years. State regulators started looking more closely at how other hospitals were doing. And it wasn't just Springfield that was losing money. Last year, six of Vermont's 14 hospitals lost money. And it's a really complicated combination of factors that have led to the losses. 


Vermont's workforce shortage means there aren't enough nurses and doctors, so hospitals have to hire traveling nurses and doctors and they're much more expensive. Vermont increased its Medicaid system under Obamacare and there are a lot more people on Medicaid now. Hospitals say they're not being paid enough.


So now the COVID-19 pandemic is here and it's putting a big strain on our health care system. On the financial side, for these hospitals, how is it impacting them?


So all of the hospitals, you know, they've put their elective surgeries on hold and they're reducing the number of outpatient visits to make sure all their resources go toward dealing with the pandemic. To put it quite simply, it means there's not much money coming in. So the hospitals that were already stressed, like Springfield, they have very little cash and some really big bills to pay right now. And as you mentioned, Springfield got a $1.3 million loan recently. And Human Services Secretary Mike Smith told me Grace Cottage Hospital in Townshend also asked for an emergency loan.


Smith said the state's using Medicaid money it has as a kind of advance, but he made it clear that there's a limit to just how much money he has to use to extend the lifeline to an already stressed-out system. Here he is:


"We don't have an endless supply of money. And at some point, we're going to have to talk about appropriations. But for right now, we're in an emergency situation where we are advancing money to these various entities, and we will circle back with the legislature at a time when that's most appropriate."

So it's a pretty bleak picture financially for these hospitals, and the state is trying to help. But I mean, what about the regulatory side? Are they reacting to these challenges in any way?  


Yeah, they're trying to help out. What they've told me is that, basically, they're trying to stay out of the way. 


Before the pandemic, the Green Mountain Care Board — that's the regulatory body that oversees hospital budgets — they were trying to get the hospitals that were most at risk to put together these sustainability plans. And that was a way to kind of get the hospitals to look at the long view and try to get them to think about a way of right-sizing the state's hospital system.


And so I asked Mike Smith, you know, how he feels about lending Springfield Hospital more than $1 million, when the hospital already has too much debt and is trying to emerge from bankruptcy. And this is what Smith told me:


"Right now, let's let's make sure that our health care system doesn't collapse, basically, and let's make sure that our health care system is there for us as we deal with this crisis."


Those are strong words, you know, making sure our system doesn't collapse. But for a lot of hospitals, it's real. Money is very tight. 

What do we know about the federal relief package, that $2 trillion package that went through Congress a few weeks ago? Is there anything in there that could help rural hospitals here in Vermont?

Yeah, there's definitely money in the federal plan. But anyone I've spoken to doesn't really understand at this point just how much Vermont is going to get and when that money is going to arrive. So, you know, the situations at Springfield and at Grace Cottage, those hospitals, they need cash now to keep their doors open. They didn't even have cash on-hand to wait for the federal money. 


The state's been in close contact with the hospitals. Lawmakers are talking about it. But right now, there hasn't been any state package put together. So I think the congressional delegation, state lawmakers and hospital officials are all trying to wrap their heads around this federal package, to try to understand when Vermont's going to get the money and how much they're going to get. Then, they're going to kind of take it from there.


Find a list of frequently asked questions and resources regarding COVID-19 in Vermont, here.

Howard Weiss-Tisman is Vermont Public’s southern Vermont reporter, but sometimes the story takes him to other parts of the state.
Henry worked for Vermont Public as a reporter from 2017 to 2023.
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