Green Mountain Care Board warns Vermont hospitals face acute financial strain
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Summary
GMCB chair Owen Foster told the Senate committee that a 2024 report showed about a $2.4 billion shortfall for hospitals over five years and presented FY26 budget metrics showing several Vermont hospitals with low days‑cash‑on‑hand, leaving them vulnerable to service reductions or insolvency.
Owen Foster, chair of the Green Mountain Care Board, told the Senate Health & Welfare Committee that Vermont’s hospital system is under acute financial pressure and that the board’s recent analyses and statutory work reflect that risk.
“Just the hospital system…we're about $2,400,000,000 short of revenue to maintain the status quo over the next five years,” Foster said, citing the Act 167 report released in September 2024 and warning that subsequent federal policy changes may make that estimate optimistic. He said the board’s FY26 budget reviews show several hospitals are in the vulnerable or highly vulnerable range on days‑cash‑on‑hand, a commonly used rating‑agency metric: Brattleboro (72 days) and Springfield (33 days) were cited as examples.
Foster described the structural drivers: Vermont spends a high share of health dollars on hospital care, the state has limited ambulatory surgical capacity and hospitals have aging facilities and recruitment challenges in rural areas. He emphasized tradeoffs in transitioning care away from hospitals: moving services can lower system costs but will reduce hospital revenue and create financial pressure on facilities that must restructure.
Foster said the board is pursuing several policy responses, including tightening hospital budget guidance (guidance to be finalized March 31, 2026), rulemaking related to ACO certification and exploring reference‑based pricing as a way to contain hospital prices. He noted the board accepted an interim notice‑of‑service‑reduction policy required by recent law and reported one December application (Rutland Regional Medical Center pediatric inpatient changes) that was withdrawn while the hospital works with the Agency of Human Services.
Foster said the board will finalize hospital budget guidance by March 31, hospital budgets are due July 1 and the five‑member board must vote on each hospital budget by Sept. 15, underscoring a compressed timeline for policy and budget decisions.
The committee asked the GMCB to return for further briefings; the board committed to follow up with technical details and additional staff presentations.
