Memo to Board members: It’s Unwise to Try to Intimidate, Insult, or Challenge the Authority of your Regulator
UVM Medical Center
I have grave ethical concerns about the behavior, governance, and board leadership at the UVM Health Network (UVMHN) and its network of Vermont hospitals (Porter, Central VT, and UVM Medical Center (UVMMC).
As nonprofits, I believe they’ve betrayed the best interests of those patients they’re appointed to serve, as well as their many committed nurses and practitioners (see moral injury), by focusing solely on competitive expansion, market consolidation and revenue growth rather than on the key mission of population health.
As a former chair of 12 statewide and national non-profits, I understand non-profit governance. Nonprofits are by definition driven by a public-good mission not by profits and market share. They don’t compete with one another, they collaborate together to expand their mission impact.
And, as a former chair of Fletcher Allen Healthcare, the predecessor of UVM Medical Center Hospital (UVMMC), whose then-president Bill Boettcher had been charged with lying to regulators (then BISHCA, now VT Dept. of Financial Regulation) and had begun serving a two-year jail term for that deceit, I’m familiar with hospital governance and regulation. I agreed to take the leadership role knowing that the organization I was about to chair had behaved with criminal intent and on one occasion I had to remind the board of that uncomfortable fact.
In healthcare, the agreed-upon mission is population health ̶ providing clinical quality, timely access, and affordability, among other things.
I’ve always maintained that our hospitals have largely succeeded on the first criterion but have failed to deliver on access and affordability. But without access or affordability, how does one deliver quality?
Healthcare governing boards, like all nonprofit boards, are accountable for management’s delivery-on-mission, which, by UVMHN and UVMMC’s own metrics and substantial anecdotal public testimony, are far below acceptable standards.
Healthcare leadership serves at the behest of the hospital board. It’s compensated by that board and performance-reviewed annually by the board. In addition, the board has an obligation to develop and disclose their compensation philosophy. In both obligations, I would suggest, the current UVMHN and UVMMC boards’ decisions and actions are questionable.
Recently retired President Dr. John Brumsted was paid in excess of $2M dollar during his last year according to public records. Currently, 26 administrative employees having no direct impact on clinical care earn a combined $13.9M. Listed individually on page 7 and 8 of UVMMC’s nonprofit 990 filing, one can see the breakdown of administrative salaries running between $300,000 to over $800,00. How many Vermonters make those salaries?
Vermont’s accountable care organization (ACO) OneCareVT (OCV), now wholly under the control of UVMHN, is appealing an order by the Green Mountain Care Board (GMCB) to reduce OCV executive salaries to the mean of similar organizations, down from the roughly half million each they currently pay themselves. OCV is appealing.
The darkest news, however, is the decision by five key hospital board members in the Network: Allie Stickney, UVMHN Board Chair, Tom Golonka, UVMHN Trustee, Tom Little, UVMMC Board Chair, Paulette Tabault, DNP, APRN, FAANP, Central Vermont Chair, and Linda Schiffer, Porter Hospital Chair, to send a letter to key legislative leadership: Senate Pro Tem. Phil Baruth, Speaker Jill Krowinski, and Senate and House Health and Welfare Committee chairs Ginny Lyons and Lori Houghton in advance of any rate request decision by the GMCB ̶ a preemptive strike ̶ calling into question the good faith of the GMCB. It would seem that the intent was to intimidate the GMCB in advance of their rate decision. Otherwise, why would hospital board members protest to the legislature before a decision is even rendered?
To quote from UVMHN’s letter cited above:
“What we observed over the course of this year’s hospital budget review process, and especially on August 23rd when the GMCB reviewed and commented on the Network’s budgets, is a severe erosion of our established governance role.”
I’m sorry. Your governance role is to ensure delivery-on-mission, to ensure ethical integrity, financial integrity (not profit), and the competence of executive leadership. You do not create budgets, you review management’s suggested budget against mission.
What was even more appalling was the signatory board members’ effort to vilify the newest and deeply experienced members of the GMCB, Thom Walsh, Owen Foster, and Dr. David Murman ̶ the latter an emergency room doctor at Central Vermont Hospital.
“In fact, the three newest GMCB members all came to the Board within the last two years with little or no prior healthcare finance or regulatory experience.”
This is actionable nonsense. Chairman Foster was an award-winning healthcare fraud prosecutor with the U.S. Dept of Justice. Among his achievements as an assistant U.S. attorney in Vermont from October 2014 to September 2022: led assistant U.S. attorneys on the six largest recoveries in Vermont history; Purdue Pharma convicted on three felonies and agreed to pay over $8 billion in penalties, the largest pharmaceutical case in U.S. history; the first Department of Justice action against an electronic medical record company, Vermont’s then-largest recovery, a $155 million False Claims Act settlement; and other major prosecutions.
Walsh, holds a PhD in health policy and teaches health systems and policy at Dartmouth’s medical and business schools. With 15 years of consulting experience, he has provided healthcare finance and quality advice to various organizations, including the Joint Commission, which is responsible for regulating hospitals nationwide, the Veterans’ Health Administration, the Maine Medical Center, Wyoming Spine Surgery Associates, The Connecticut Institute for Primary Care Innovation, OneHealth Nebraska (a state-wide primary care accountable care organization), Baystate Health System, Navy Medicine, and the Defense Health Agency, among others.
Dr. Murman is an experienced provider on the front lines of healthcare as an emergency physician at Central Vermont with teaching credits at UVM School of Medicine, Tufts Univ. School of Medicine, and Harvard as a Clinical Fellow.
Irony abounds. UVMHN has an issue with the healthcare skills of the three new GMCB board members with years of healthcare experience, but never raised similar concerns with prior board members, including chairs who ran a Creemee stand and seafood restaurant and another who ran a movie theater. The healthcare experience of Owen Foster, Dave Murman M.D. and Thom Walsh PhD certainly exceed that of many serving on UVMHN’s governing boards who sent the letter.
To add insult to injury, UVMHN has put undue pressure on Dr. Murman, who, as a member of the GMCB, has an ethical obligation to act in the best interest of Vermonters’ health rather than the interests of the UVM Network, which owns his own employer, Central Vermont. Yet, having served on the UVMHN and CVMC health finance committees, Dr. Murman has appropriately recused himself from any budget decisions in regard to his own hospital, and now with undue pressure from the Network, he has also agreed to abstain from any rate decision on the whole Network’s budget. This pressure was unneeded in the case of his own hospital and unethical in the case of the other hospitals.
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UVMHN is seeking hospital budget increases of: 28% for Porter, 24% for UVMMC, and 21% for Central Vermont. Of this, UVMHN plans on spending $405.5 million on non-clinical administrative service salaries alone. These rate requests substantially outpace medical inflation and insurers’ reported cost estimates from other states. Price growth nationally for hospital and related services between June 2022 and June 2023 was 4.2%, with prices for inpatient services rising 3.7% and prices for outpatient services rising 5.7%. Prices for physician services, meanwhile, rose 0.5%. National growth trends are much lower than Vermont hospitals’ rate proposals for FY 2023 or FY 2024.
For UVMMC alone, this translates to an increase of $356M dollars for the 2-year period. This on top of UVMHN’s historical requests which amount to an annual growth rate in the cost of Vermont healthcare from 2000 to 2018 of 9.3% a year or 167% for the period, while net patient revenue from 2018 to 2020 rose 21%. Can you name any other life-sustaining human necessity like housing, public education or food that has seen these kinds of inflationary increases?
If we accept UVMHN’s calculated ratio of administrative to clinical expenses, they would be over-staffed by $28M. But when compared to the mean of the peer hospitals they selected, they’d be overstaffed by $61M.
I would suggest that as board members responsible for delivering on the mission of population health, it is you, the UVMHN Hospital trustees, who have failed Vermonters, hardly the GMCB since it is their statutory job to ensure quality, access, and affordability for all Vermonters.
In a further irony, the UVMHN board members who claim to understand the role of the GMCB so thoroughly, misunderstand their own responsibility. Their job is not to defend their increasingly unaffordable and inaccessible hospital systems but to refocus leadership’s performance on the broad mission of population health.
As one who has served on twenty nonprofit boards or legislative commissions since I was 25, I’m deeply disappointed by the hospital trustees’ failure of ethical responsibility to ensure that their performance aligns with their mission. But, instead, choose to go on the offensive against what is arguably the most qualified regulatory agency yet appointed to protect the healthcare interests of Vermonters.
Mission-failure has human consequences. David Taft recently testified to the GMCB about his UVMMC experience. In 2019, UVMMC missed a cancer diagnosis and then presented him with a large medical bill to rectify what they’d earlier missed. The legal “standard of care” for cancer treatment is early diagnosis and treatment. Taft is now trying to make the required payments after having his credit score downgraded because of the outstanding bill. He also mused about how he would live out his remaining years hoping the treatments he can’t afford will keep the stage 4 cancer from spreading further.
The light at the end of this tunnel is that Vermonters themselves know, as do many providers who are leaving a system inconsistent with their values and commitments to serve patients, that the system is broken and does not meet their needs.
Although it is the responsibility of a hospital governing board to address the challenges of their institution and implement solutions, the good news is that Vermonters have the Green Mountain Care Board to rely on when these boards fall short.
