UVM Health Network Financial Picture From President & CEO John Bumstead
This coming Thursday will mark one year since the first patient diagnosed with COVID-19 was admitted to the UVM Health Network for care. Since that time, personal and professional lives have seen dramatic changes, and yet, the work of our Network has advanced with an unwavering focus on two goals: preserving and providing high-quality care for our patients, and doing everything we can to end this pandemic. Together, the caring and dedicated providers and staff across our Network have battled a new and deadly virus, adapted to an ever-changing new normal, and now are also rapidly distributing vaccines that will hopefully stop the spread of COVID-19 – all while continuing to be there for our patients when they need us. This cumulative effort, however, has negatively impacted our financial performance.
To put our current financial picture in context, first I want to share how we ended our last fiscal year. Toward the end of 2020, due to existing challenges and those compounded by the pandemic, we projected a $224 million loss for the Network as a whole. Thanks to a combination of funding through the CARES Act and more than $52 million in expense reduction efforts, we were able to reduce our FY20 loss to $16.3 million.
This fiscal year, however, many of our pandemic related challenges continue. As of our budget reporting period that ended on January 31, we missed our Network budget target by more than $28 million for the fiscal year, which began on October 1. Over the same period, we had a negative operating margin of 2.7 percent, or about a $21.3 million loss. These figures include the $39.1 million of federal and state CARES Act funding we received. Additional federal funding is expected, and our hope is that it can further stem some of these losses.
Plainly speaking, these numbers are serious and below our expectations, but they directly reflect a common trend in health care right now: patient visits are down due to the pandemic. National data show that ED visits are down 25 percent and discharges are down 18 percent. Throughout our Network, patient visits in some areas are down as much as 25 percent. Layer on top of that the significant, one-time financial losses coming from the cyberattack and suspension of outpatient surgical procedures at the Fanny Allen campus at UVM Medical Center.
Despite this news, I want you to know that our Network has the strength to weather this storm. Last year, amid our financial challenges, we took necessary steps to prepare for difficult times, including reducing our expenses. This year, each affiliate has a plan to respond to financial challenges, actively working to put local plans into place. We are also looking forward to patients feeling more comfortable seeking care as the COVID-19 vaccine becomes more widely distributed and infection rates decline. This is important because delaying care may have negative long term impacts on the health of our region.
This news is difficult, but important for me to deliver as part of my commitment to being transparent with our employees, our patients and our communities. I trust and hope that better days are ahead for us. In this extraordinary time, I have heard countless stories and seen my colleagues from across the Network rise to meet the challenges we face. Because of them, we’re winning the war against a pandemic and making sure all our patients get the care they need.
Posted: March 8th, 2021 under Business News, Heathcare News, Peru/Regional History, Regional NY-VT News.