Vt. state board releases report with Springfield Hospital financials
Report shows Springfield Hospital with poor financial metrics relative to other hospitals in the 2016-17 year
By JEFF EPSTEIN
MONTPELIER, Vt. — The Green Mountain Care Board (GMCB) has sent to Gov. Phil Scott his requested financial review of critical-access hospitals, and the numbers for Springfield Hospital do not look good.
Gov. Scott requested the report in the wake of financial troubles at the facility and its parent company Springfield Medical Care Systems.
“Given recent revelations about the serious financial challenges at Springfield Hospital, I request that the Green Mountain Care Board re-evaluate all of Vermont's critical access hospitals and report back in the near-term about their financial health,” Scott said in his charge to the board in December.
The report consists of several tables of financial metrics, in terms of 2017 actual figures and projected figures for 2018. The eight hospitals reviewed were Springfield Hospital, Copley Hospital, Gifford Medical Center, Grace Cottage Hospital, Mt. Ascutney Hospital and Health Center, North Country Hospital, Northeastern Vermont Regional Hospital, and Porter Medical Center.
Generally, the report shows Springfield Hospital with very poor financial metrics relative to other hospitals in the 2016-17 year, but with improved but still low projected figures for the following year.
GMCB uses 11 metrics in three groups (capital structure, profitability and liquidity) to measure the financial health of hospitals.
Looking at profitability, for example, Springfield Hospital in fiscal year 2017 had an operating margin (operating expenses as a percentage of operating revenue) of negative 7.1 percent, the absolute bottom rank of the eight CAH hospitals, and 14th in the state.
For projected fiscal 2018, this figure was a little better, negative 1.6 percent, ranking it sixth out of the eight CAH facilities and 11th of all state hospitals.
For total margin, Springfield Hospital has the same relative rankings. It’s figures were negative 3.2 precent for fiscal 2017 and negative 0.4 percent projected for fiscal 2018.
The other profitibility metric is return on assets, or the net income generated by equity investments. Again, bigger numbers are better: for example, Mt. Ascutney Hospital and Health Center had 11.6 percent, placing it first in the state as well as among CAHs.
Springfield Hospital had negative 4.3 percent, again placing it last among CAHs and 14th in the state. The following year the figure was negative 0.5 percent, with a rank of sixth among the eight hospitals studied and 14th in the state.
Given the reports of Springfield Hospital not being able to pay its bills, some would say an important metric is the number of days it had cash on hand to operate without any further money coming in. This is one of the metrics GMCB looked at.
For fiscal 2017, Springfield Hospital was ranked sixth of the eight with 101.2 days, 11th in the state. Two hospitals had less cash on hand: Grace Cottage Hospital and Copley Hospital. For projected 2018, Springfield Hospital had the same relative ranks as the previous year but a few more days of cash: 106. (Mt. Ascutney was third from the top in this metric both years, with 176.9 and 190 days of cash respectively.)
How about generating cash flow? Springfield Hospital had a margin of negative 3.1 percent in fiscal 2017 and positive 2.1 percent projected in fiscal 2018, again showing a pattern of improvement from one year to the next.
Overall, Springfield Hospital ranked at or near the bottom of critical-access hospitals in the state on every financial metric examined, with some improvement in some metrics between fiscal years 2017 and 2018.
GMCB reviews all hospital budgets each year. It does not approve expense budgets, but “it formally and explicitly approves Net Patient Revenue (NPR) and growth in overall charges,” it explains as part of the report.
The board asked five critical-access hospitals that had less NPR than expected — Copley Hospital, Gifford Medical Center, Grace Cottage Hospital, North Country Hospital and Springfield Hospital — to come before it for an additional financial review.
“The board considered the meeting necessary because, in the 2017 hearings to review hospitals’ FY 2018 budgets, the board expressed concern that some hospitals appeared to have historically requested unrealistic revenue projections contributing to consistent losses or very low margins over the past few years, had expenses that were outpacing their revenues, or had other concerning financial issues,” the report states.
However, the report also cautions that each hospital has individual circumstances that mean that its relative rankings do not in themselves indicate its overall financial health.
Moreover, GMCB uses additonal financial metrics and is considering others for the future.
“Rural hospital financial stress is a national issue that is reported to be increasing in intensity,” it said, citing a federal study that showed 64 rural hospitals closed from 2013 through 2017.
“The challenging national landscape for rural hospitals underscores the need for the state to
provide enhanced focus on financial health of its critical access hospitals in particular, and all
Vermont hospitals more generally. The board is therefore reassessing its metrics and data collection for hospitals to determine if there are additional metrics that might assist the state in monitoring financial health, as well as ensuring that health care costs are contained.”
Neither Springfield Hospital or Mt. Ascutney Hospital and Health Center had a response to the report when requested by the Eagle Times.