Information for In Committee news reports are sourced from GoldenDomeVt.com and the General Assembly website. 

by VDC staff

What can be done to make healthcare more affordable, and should the government take the lead role?

The Vermont House Committee on Healthcare heard testimony on Friday that suggests that the hospitals themselves are taking big steps towards that future through transformation, hospital collaboration, and cutting operational costs to save nearly $400,000,000 over the next few years. 

According to the lead witness, Michael Del Trecco, president of the Vermont Association of Hospitals and Health Systems, all Vermont hospitals fully understand the financial pressures that Vermonters and the state government are facing. “That reality has required some difficult but necessary changes”, said Del Trecco, and has led to the creation of the VAHHS Affordability Action Plan, which he says, “reflects again a shared commitment for all hospitals…” 

There are three pillars to the action plan. (1) Submit 2026 hospital budgets to the Green Mountain Care Board. (2) A pledge to eliminate operating expenses by $100M over two years. (3) Commitment to transformation. 

Through the first pillar, Vermont hospitals already eliminated $230,000,000 of operating expenses in one year by working with the Green Mountain Care Board to find areas to cut, which came with some sacrifices. “They were focused on administrative reductions, operational changes, and asking all staff, including physicians, to work more efficiently. The decisions required difficult trade offs, but all decisions were made with one goal: How do we minimize impact to patient care?”, said Del Trecco. 

Through the second pillar, Vermont hospitals are looking to build on the success of the first pillar by finding how they can do more. With their commitment to further savings opportunities, they have contracted with a national healthcare firm, Kaufman Hall. The firm worked with each hospital to identify those opportunities hospital by hospital. Due to these efforts, VAHHS was able to find an additional $100,000,000 in savings to be implemented over the next two years. Combined with their initial savings, Vermont hospitals will have eliminated $330,000,000 in operating expenses that can be rolled over to cut patient costs, without sacrificing patient care. 

Through the third and final pillar, Vermont hospitals will partner closely with the Agency of Human Services to develop, “…data-driven regionalization and transformation plans that preserve access to care, particularly in rural areas where hospitals are not only delivering care, but are pillars of their communities and the vitality of their communities.” In total, the Association estimates additional savings of $40,000,000.

DEl Trecco goes on to explain that these efforts over the next few years will exceed the savings milestones of the Oliver Wyman Report—two years ahead of schedule. The Oliver Wyman Report was issued in 2022 by direction of the Vermont Legislature in part to identify cost drivers in Vermont’s healthcare system and provide recommendations to bring down costs. The Wyman Report was highly controversial when it was issued and recommended sweeping changes, including hospital program closures, and garnered public outcry in highly-attended meetings across the state. 

VAHHS President Del Trecco ended his testimony with a promise and urging caution for the committee. “And as the voice of all hospitals in Vermont, you have my word that my organization will continue to make affordability a priority along with the work you are all doing. So I respectfully ask that as we examine new proposals or new policies that we do it carefully as not to create any unintended consequences that might derail this forward progress.”