by Don Keelan
On July 1, 2023, the Southwestern Vermont Health Care Corporation and Southwestern Vermont Medical Center, along with its 11 affiliated companies, will come under the direct control (ownership) of Dartmouth- Hitchcock Health, a New Hampshire nonprofit corporation.
SVHC sent the request for approval of the asset transfer to the Vermont Attorney General’s office on Feb.17, 2023. Twenty days later, on March 9th, the A.G. approved the transfer “of all or substantially all assets,” possibly one of the largest takeovers of a Vermont nonprofit. Ever.
This could be the best news the Bennington area could ever receive. Or it could be the most devastating news. Only time will tell.
D-HH has been one of the leading acute care, research, and teaching hospitals in the United States for decades. For almost a dozen years, it has been affiliated with SVMC, with its providers employed by D-HH. For some time, the two institutions have cooperated in the application of telemedicine and sharing, when available, cancer care with the D-H Norris Cotton Cancer Center collaborating with SVCC. When resources are available, patients needing more sophisticated medical care are sent to D-HH.
The parties executed the 28-page Affiliation and Integration Agreement on December 6, 2022, to take effect when regulatory approvals and due diligence were completed.
On page 18 of the Agreement, it is noted that in Bennington, “the incidence of cancer is statistically higher than any other region in Vermont and considerably higher than the U.S. average.” The document notes that in orthopedics, “ the population of the Service Area, one of the oldest in the nation, has a higher per capita demand for orthopedic services.”
Cardiology was also called out, noting that “patients in need of cardiovascular care currently leave the area to receive care.”
The Agreement calls for good-faith intervention by D-HH by addressing the above and what is described as additional “foundational services” such as pulmonology, general surgery, gastroenterology, MRI and CT Imaging, and others.
Section 3.8 of the Agreement is concerning: “D-HH does not hereby make any financial commitment or guarantee with respect to these initiatives.” D-HH does commit (as long as funds are available) to provide $22,500,000 to cover 75% of SVMC medical records and coding to the Dartmouth EPIC model. SVMC will pick up the balance of 25% or $ 7.5 million plus.
D-HH’s provision of mental health services is consistently absent from the Agreement, a critical need in Bennington and its service area.
The transaction to transfer control of SVHC to D-HH could be a win-win for the Bennington area; Southwestern Vermont could surely use the D-HH resources.
However, we must pay attention to the downside, and I hope it was carefully evaluated. What is about to take place is that a local, 105-year-old nonprofit institution, the largest employer in Bennington County with over $200 million in assets ($200,219,775 per the 9/30/20 Form 990s), will give up control to an out-of-state nonprofit after nearly a dozen years of on-again, off-again negotiations.
Section 3.6.5 of the Agreement states, “all unrestricted gifts made to SVHC and the SVHC Affiliates, whether prior to or after closing, will be used for the benefit of the (D-HH Systems-wide activities) Service Area.”
The signed Agreement gives the D-HH board of trustees operational and capital budgeting control by becoming the Bennington Corporation’s sole member. There is very little ‘wiggle room’ to undo the deal if, for some reason(s), it does not work out. One exception is highlighted: if a for-profit enterprise takes over D-HH.
The SVHC and SVMC board signed off on the deal this winter, and hopefully, they were given all the information needed to make their decision. Such information should have addressed the complexity of having the hospital and its service organizations adopt the EPIC medical records/coding conversion. This IT system is noted to be highly complex and fraught with an endless stream of updates. The staff has to adapt to changes, and that comes with an awful price.
As noted above, there is no guarantee that D-HH will offer additional providers. D-HH has yet to send many of its providers to Bennington in the past. It, too, needs help recruiting. It was reported this past January that it had 800 job openings. Even more disturbing was the follow-up announcement on January 20, 2023: “ the need to close a budget gap of $ 120 million by the end of September.”
Nonprofit boards of trustees are not infallible and serve as volunteers. Nevertheless, some tragic mistakes in judgment have occurred in our region in the past several years.
The most notable was the closing of Southern Vermont College, allowing the college president to be away for a year, over-expansion, and appointing a less than honorable person to be interim president. The now-defunct Burlington College and North Adams, MA hospital are other recent examples of unskillful judgments by boards of trustees.
I find parts of the Agreement perplexing and not in SVHC’s best interest. Even more bewildering is the almost complete silence of the take-over by local media, the business community, health care providers, government, and elected officials—local and state, and of course, the patients.
After July 1, 2023, D-HH will be in charge. To paraphrase a Marine Corps motto,
“Let us hope that the ghost of no SVHC Trustee will ever come back and say if only I had done my job.”
The author is a U.S. Marine (retired), CPA, and columnist living in Arlington, VT.
Take it from my experience, the care will decline in quality just like it has everywhere else they’ve taken over. Typical monopoly. They have more power than regulators.