Senate hears urgency on Act 167: report warns Vermont hospitals at financial risk, urges statewide transformation

At a Feb. 4 meeting of the Senate Committee on Health & Welfare, Green Mountain Care Board members and Agency of Human Services officials told legislators that Vermont’s hospital system faces a mounting financial and access crisis and that Act 167 work — including an Oliver Wyman community engagement — points to the need for rapid, statewide transformation.

Jessica Holmes, a member of the Green Mountain Care Board, told the committee “our healthcare financing and delivery systems are in trouble,” and said the board’s analysis and the Oliver Wyman report indicate most hospitals will run deficits under a status-quo path unless large changes occur. Holmes urged a coordinated state response that brings together the governor’s office, AHS, the Green Mountain Care Board, payers, hospital leaders and key legislators.

The Oliver Wyman engagement, led by consultants who also worked with Mathematica on analytics, gathered input from more than 3,000 Vermonters across 14 hospital service areas through virtual and in-person meetings. Hillary Watson, senior health policy analyst for the Green Mountain Care Board, summarized that community feedback and read comments from residents, including: “Many individuals don't go to care because the premiums and out of pockets are too high.”

Why it matters: presenters said Vermont pays among the highest hospital prices in the country while many hospitals operate at or below break-even; insurers’ reserves are depleted and wait times for specialty care are long. The Oliver Wyman report recommended a statewide, intentional redesign that could include regional centers of excellence, greater investment in primary care, mental health and long-term care capacity, improved EMS and transportation, and programs to shift appropriate care out of hospitals.

Key findings and context

- Financial trajectory: Oliver Wyman modeling presented to the committee showed that, without substantial change to financing or service structures, nearly all hospitals could be in deficit by 2028. Holmes said federal COVID relief provided temporary relief to some hospitals, but those funds are exhausted.

- Access and quality: witnesses cited prolonged wait times for primary and specialty care, reductions in some hospital quality ratings and local service disruptions such as a recent UVM Health Network reduction of a mental health unit and primary care and dialysis service changes at multiple sites.

- Community engagement: Watson said the engagement included two rounds of meetings in each of 14 hospital service areas and that turnout for the second, in‑person phase averaged about 68 participants per meeting. Written comment and recorded sessions were posted on the Green Mountain Care Board website, she said.

State actions and next steps described in the hearing

- Agency of Human Services (AHS) described a care transformation roadmap and said it has established a care transformation steering committee with Green Mountain Care Board staff to align planning and oversight.

- AHS issued a request for proposals and selected the Rural Health Redesign Center (RHRC) to provide technical assistance and support care transformation planning and feasibility work for hospitals and primary care practices. AHS said RHRC will help with topics including analytic dashboards, assessing global/capitated payment readiness and development of short-, medium- and long-term hospital transformation plans.

- AHS officials said the state has signed an agreement to participate in the AHEAD model; the transcript included a date string that appears to be a transcription error and the start date was not specified during the meeting.

- The presenters recommended the state develop an emergency plan to preserve essential services (examples given: primary care, mental health, substance use treatment, emergency and observation services, EMS, home care, dialysis and infusion) and to identify short‑term funding sources and oversight for service-line closures or disruptions.

Clarifying details raised in committee discussion

- Funding from Act 167: the meeting summary reviewed the Act 167 appropriations described in the statute and witnesses noted Section 3 of Act 167 appropriated $5,000,000 for Sections 1 and 2 work in fiscal year 2023; the transcript lists roughly $900,000 for the Agency of Human Services and $4,100,000 for the Green Mountain Care Board for consultant and related work in that fiscal year.

- Data and measurement: committee members pressed on how to preserve useful data and functions previously provided by the OneCare ACO; AHS and GMCB staff said the state is cataloging analytic capacities and exploring where clinical and claims analytics should reside within state agencies or partners.

- Oversight capacity: Green Mountain Care Board staff warned that any proposal calling for expanded review of service-line closures or reverse CON-style oversight would require additional staffing and resources for the board to carry out that work.

Quotes from the hearing

- “If we leave it to market forces, services will be cut and hospitals will close,” Holmes said, adding that service disruptions are already affecting vulnerable communities.

- “Many individuals don't go to care because the premiums and out of pockets are too high,” Watson read from community comments compiled during the engagement.

- “The system we have is not going to work going forward,” said the AHS director of health care reform during the presentation (name provided in the transcript).

Next steps for the committee and agencies

Committee members signaled plans to develop legislative language and to convene further hearings, including scheduled briefings from national experts and the UVM Health Network. AHS and GMCB staff said RHRC will begin technical assistance and that they will provide further analysis of feasibility, predictive impacts of service-line changes and specifics on funding needs.

Ending

Witnesses and legislators agreed on urgency but also on the need for coordinated statewide planning, technical assistance for hospitals, and additional capacity at state oversight agencies to evaluate and support transformation. Committee leadership said it plans to circulate a draft bill framework soon and continue hearings to translate the Act 167 and Oliver Wyman recommendations into concrete policy and budget actions.