UVM Health Network Hospitals… a coup d’état or a coup de grace?

Courtesy UVM Medical Center Hospital

During the week of June 9th, Dr. Sunny Eappen consolidated all leadership power among the UVM Health Network’s (UVMHN) owned hospitals under his direct control, essentially leaving the individual hospital presidents with no employees or authority to lead. And since inception, the governing boards of these hospitals have been powerless since their acquisition, also receiving their marching orders from Dr. Eappen at UVMHN who serves on all their boards.

This latest travesty that will only further downgrade the nonprofit mission of the six Vermont and New York hospitals. The power-grab was apparently initiated to push back on the emerging narrative that the egregious cost structure, systemic overcharges, waste, deteriorating quality, over-expense in administration and management, and the combined impact on the premium cost and financial stability of Blue Cross Blue Shield-VT (BCBS-VT) is all based on inaccurate data, although that data is derived directly from the Centers for Medicare and Medicaid Services (CMS) and the National Academy for State Health Policy (NASHP).

Dr. Eappen, (with the approval of his Governing Board?) hired the international consulting firm Forvis/Mazars to render an opinion on the accuracy and relevance of broadly accepted national data used by the Green Mountain Care Board (GMCB), VHC911.org, (of which I am a board member) and others to indicate the degree of waste inherent in the UVMHN system. The cost of this consulting engagement was purportedly estimated at $5,000. Might this be one of several recent consulting engagements where the customer says “substantiate my view that…?” This is on top of the $15M consulting set-aside for the group Mike Smith is leading.

Other world-class consulting firms have been immersed in their own set of similar scandals, rendering their conclusions subject to doubt. McKinsey did major damage to its reputation working for Purdue Pharmaceuticals helping them market oxycontin, while Boston Consulting Goup (BCG) recent was engaged by the Israeli and U.S. administration to create a Gaza Humanitarian Foundation (GHF) to replace the U.N.’s effective humanitarian assistance work. Since the GHF started operations in late May, just shy of 600 Gazans have been killed by the Israel Defense Forces (IDF) and over 2,000 wounded near aid distribution sites, according to the Gaza Ministry of Health. The president of BCG has since apologized and two partners were fired.

This most recent consolidation of power under Dr. Eappen and his personal leadership team marks a new twist in the declining reputation of UVM’s Health Network and its hospital UVM Medical Center (UVMMC).

In spite of UVMHN’s $10M lobbying, PR, and advocacy budget being used to convince Vermonters, legislators, and business leaders that the network is on mission, Vermonters know from personal experience that cost and access are unacceptable. Something is seriously wrong and Vermonters are not dumb.

The team recently put together to meet and solve the dispute is led by Mike Smith, Stephen Gorman, Dr. Nancy Kane, Allie Stickney, the immediate past chair of UVMHN, and Tom Golonka, a financial planner, current chair of the Vermont Pension Investment Committee (VPIC) and the current chair of UVMHN.

Mike Smith, a political Mr. Fix-it, was drafted to help solve yet another intransigent Vermont problem. His work is often politic but not always strategic. Stephen Gorman is a former CEO of Aptarro and Global Strategy Officer for GE Healthcare, both major service providers to hospitals. Allie Stickney is a past board member of the UVM Medical Center, past President/CEO of Wake Robin and also of Planned Parenthood Northern New England. Tom Golonka is a financial planning professional and wealth advisor. Dr. Nancy Kane, who has over 40 years of experience as a healthcare consultant on financial and strategic issues and was a professor of Health Policy and Management at the Harvard T.H. Chan School of Public Health will bring knowledge and experience to her role. I and many others are hoping for the best from this group, but the battle lines are drawn and the war of words will require more than another evolving consensus. As I’ve said before, one doesn’t negotiate with regulators. The regulated entity either conforms to regulation or is prosecuted.

Dr. Eappen’s decision to spend further energy, employee morale, and money consolidating power and to fracture traditional nonprofit governance in so doing represents a gross failure of leadership and dereliction of duty.

Vermonters need answers to these questions:

  1. What becomes of the former presidents of the six owned UVMHN hospitals? Are they now minions of Dr. Eappen’s vision?
  2. Where is the UVMHN’s governing board of trustees? Have they approved this consolidation of power under a leader who serves at their behest? Do they understand individual trustee accountability and liability for delivery-on -healthcare mission … quality, affordability, and access? They appear to be AWOL.
  3. Given the crushing cost and quality impact on Vermonters and the recent power grab, is it time for UVMHN board of trustees to initiate an interim performance review of UVMHN’s president Dr. Sunil Eappen with an eye toward holding him accountable for delivery on mission. If not now, when?
  4. Is the unspoken goal to prepare UVM Health Network for a sale to private equity (PE), replacing the “common good” with more profits? Oregon has made such sales of nonprofit healthcare entities to private equity illegal. Vermont’s Legislative Legal Counsel is developing statutory language to do the same in Vermont. If not, will PE in healthcare be at least overseen by the Green Mountain Care Board (GMCB)?
  5. Why do the financial figures published by VHC911.org (of which I am a board member) that come directly from the Centers for Medicare and Medicaid Services (CMS) and the National Academy for State Healthcare Policy (NASHP) differ from those promulgated by the UVMHN leadership and submitted to the GMCB? Is UVMHN submitting accurate financial and performance data to its regulator as required?
  6. What exactly is the UVM Health Network? It’s not a hospital; is it merely a profitable aggregator of healthcare businesses that adds to healthcare costs for Vermonters and the few companies left who insure them?
  7. In order for a hospital to receive a “certificate of need” (CON) to operate in Vermont, they must be nonprofit and subject to nonprofit governance. Is it time for the GMCB to review the CONs of Vermont’s hospitals to ensure they conform to the law?
  8. Some short form question: why?
  9. Does Vermont have:
  10.  the fastest rising healthcare prices in the country?
  11. Highest premiums in the country 
  12. Highest 340b pharmaceutical markups in the country
  13. Community benefit obfuscation as documented by the recent HCA policy paper
  14. No 6 highest proportion of patients with medical debt in country as documented by KFF on medical debt in the USA
  15. Declining quality seen across multiple measures and multiple quality monitoring sources
  16. Problematic access with low productivity 
  17. Lack of regulatory compliance over several years
  18. Cutting services and simultaneously paying out bonuses

The good news is there are forces at work together to reengineer a sustainable nonprofit healthcare infrastructure in Vermont. The Oliver Wyman Report delivered in September of 2024 is a credible roadmap for this work. But unlike 73 countries in the world, the U.S. is an outlier, having decided that universal healthcare for its citizens will not be a government objective but rather a lucrative $4.5T a year business opportunity for Pharma, providers, and hospital systems to mint money. Meanwhile the U.S. ranks last among its ten peer developed countries in healthcare outcomes. By 1930, the total healthcare spend is projected to be $6.8T, 20% of GDP.

Dr. Eappen, it appears, has also sided with profits over the common good.