Vermont lawmakers hear alarm: Green Mountain Care Board, AHS and hospitals say system ‘in crisis,’ urge rapid transformation

Jessica Holmes, a member of the Green Mountain Care Board, told a joint meeting of the Senate Health & Welfare and House Healthcare committees that Vermont’s hospital system is “in crisis,” and warned lawmakers that without rapid transformation Vermonters could face major service losses and steep insurance premium increases.

Holmes said analyses commissioned since 2019 — including work by Burns & HMA, Berkeley Research Group and Oliver Wyman under Act 167 — show the state’s 14 hospitals are financially fragile and that the system is paying for itself with unsustainably high prices. “We are in real trouble,” Holmes said. “If we do not get everybody around the table together to find significant cost savings and ways to ensure the preservation of essential services in all of our communities, patients are gonna suffer.”

The Green Mountain Care Board member said the board and its consultants estimated system transformation could save roughly $400 million over five years but that the state “doesn’t have five years.” Holmes urged finding $200 million in immediate, system-wide savings to limit projected premium increases that she said could reach 20–30% if federal subsidies and Medicaid funding are reduced or sunset. “If we cannot remove $200,000,000 out of the healthcare system in the very near term, we will be looking at these 20% or more rate increases,” she told lawmakers.

Why this matters: Holmes and other witnesses told legislators the combined effects of long-standing hospital losses, a shrinking commercially insured population, rising drug and workforce costs, and uncertain federal funds and subsidies could force service-line cuts, closures or re‑designations that would change where Vermonters get care. That, in turn, could raise premiums further or require state contributions.

Hospital leaders described localized impacts and changes already under way. Tom Frank, CEO of North Country Hospital in Newport, stressed his facility’s rural role: “We are the definition of a critical access hospital,” he said, describing a service area of roughly 30,000 people and limited transport options in winter. Frank said North Country’s capacity limit is 25 inpatient beds, that the hospital had roughly 16,000 emergency visits in fiscal 2024 and about 1,600 discharges a year, and that cash-on‑hand dipped from 201 days in 2024 to 173 days after a troubled electronic medical record implementation and other costs. The hospital has focused on recruiting primary-care clinicians, shared-service arrangements with nearby NVRH and operational cuts; Frank said North Country outsourced revenue cycling and is litigating over some EMR losses.

Michael Costa, president and CEO of Gifford Healthcare in Randolph, described a similar two‑track approach: first, stabilizing operations and revenue cycle; second, identifying ways the hospital can be “systemically important” to Vermont by serving as capacity relief for academic centers and by training primary-care physicians locally. Costa said Gifford won Accreditation Council for Graduate Medical Education approval for a primary-care residency program and is requesting legislative support to help scale the program. “I happen to think that if the healthcare system is reduced down to just the UVM Health Network and Dartmouth Hitchcock, that something will be lost in our communities that will not be restored,” Costa said.

Robert Adcock, who described leading the hospital in Springfield through Chapter 11, recounted arriving to find the hospital with only “six days of cash on hand” and said the post‑restructuring work has focused on rebuilding core services, repairing infrastructure and recapturing outpatient volume that has migrated out of state. Adcock said the hospital closed its childbirth unit earlier in the restructuring and continues to rely on close collaborations with regional partners for specialty care.

Agency and reform work: Brendan Krause, director of Healthcare Reform at the Agency of Human Services (AHS), and Fran Hodgins, AHS Administrative Services director on the Healthcare Reform team, described a three‑part operational response: (1) short‑term technical help to the most financially fragile hospitals, (2) a hospital transformation planning process guided by the Rural Health Redesign Center (RHRC), and (3) targeted technical assistance for up to 20 primary‑care practices. Hodgins said RHRC — a contractor with experience running large hospital cohorts — has collected financial and operational data from all 14 hospitals and will perform one‑on‑one site engagements in May, with regional stakeholder meetings planned for early June. “All 14 hospitals have raised their interest and expressed interest in participating in the work with the Rural Health Redesign Center,” Hodgins said.

Discussion versus decision: Witnesses and legislators repeatedly urged urgency but there were no formal votes or binding directives at the hearing. AHS and RHRC said they will prioritize shorter‑term, high‑impact interventions with hospitals that show the most immediate risk and that convening among AHS, the Green Mountain Care Board, the Department of Financial Regulation and hospitals will occur on a weekly basis to align regulatory timing and technical assistance. The agencies also said they will align transformation plan timelines with the Green Mountain Care Board’s regulatory and budget calendar.

Concerns and constraints policymakers raised included the short time horizon to reach $200 million in savings, uncertainty in federal funding and Medicaid policy, the unevenness of board and systemwide coordination among hospitals, and the operational limits of EMS/transport in rural areas. Senator Ginny Lyons, chair of Senate Health & Welfare, and Representative Alyssa Black, chair of House Healthcare, pressed witnesses to keep urgency at the center of the process while AHS and the board proceed with technical assistance.

Ending: Committees and agency staff said they will continue the series of meetings and called for hospitals, their boards and state agencies to present concrete, short‑term plans for administrative efficiencies, shared services and other near‑term savings. AHS and RHRC aim to draft transformation plans in mid‑summer and finalize them in the fall; legislators signaled they may pursue additional emergency authorities or budget tools if short‑term savings cannot be demonstrated quickly.