State Board Reviews Hospital Budgets To Help Control Costs

07/31/12 7:34AM By Bob Kinzel
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For the first time, the state's Green Mountain Care Board will decide how much hospital budgets should go up each year.

The board has established a cap of 3.75 percent. But there are some circumstances that could result in larger increases.

The board is methodically taking over responsibility for virtually every major health care decision in Vermont.

The board has already been reviewing private health insurance premium increases and now it's turning its attention to hospital budgets.

Anya Rader Wallack is the chair of the board. She says reviewing hospital budgets is a critical piece of the Board's efforts to help control health care costs in the state.

"I think this is significant in two senses," she said. "One is that hospital expenditures are a very significant portion of the total health care spending in Vermont. And the other is that for the first time ever while the responsibility for hospital budgets has moved around over the years this is the first time that the responsibility for hospital budgets and the responsibility for insurer rates has been in the same place."

As a group, Vermont's 14 hospitals are seeking a roughly 7 percent increase in spending. While the board has established a cap of 3.75 percent, Rader Wallack says it's fair to exempt some expenditures from the cap if it can be demonstrated that the exemption will bring more efficiency and long term savings to the state's health care system.

"We know there are some legitimate reasons that hospitals might need to grow higher than the 3.75," she said, "most of those having to do with circumstances beyond their control some of them imposed by government."

But Rader Wallack says the bottom line is that hospital spending needs to be kept under control:

"We have a responsibility to hold down costs," she said. "So we'll be looking at all of these requests with an eye toward how we can stay within that target because we don't think Vermonters can afford more than that."

The board will hold a public hearing on the hospital requests in the middle of August. It will then issue its ruling about the proposed spending increases in September.

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