Updated at 6:32 p.m.
The University of Vermont Health Network announced Tuesday it will cut 77 positions, including 68 staff roles and nine leadership roles, as part of its plan to reduce expenses for the coming fiscal year.
While some staff will remain in their roles until the end of the fiscal year in late September, other staff positions will end as soon as Tuesday this week, said Annie Mackin, the network’s spokesperson.
The health network — which comprises three hospitals in Vermont and three in northern New York — will also not fill 69 current vacancies following Tuesday’s announcement. The network chose not to fill 120 vacant positions last year, and several hundred more positions were phased out earlier this year.
The announced staffing cuts, which amount to over $5 million in spending reductions, come a week ahead of hospital budget review hearings overseen by the Green Mountain Care Board. The state regulating body is tasked with approving the amount of patient-related income in budgets for the next fiscal year at all 14 of the state’s non-federal hospitals.
The cuts are largely to positions not involved in direct patient care, specifically in the networkwide finance, human resources and information technology teams, said Mary Broadworth, vice president of human resources for the health network. The Vermont hospitals in the health network are Central Vermont Medical Center in Berlin, Porter Medical Center in Middlebury and University of Vermont Medical Center in the Burlington area.
Along with layoffs, the health network aims to reduce spending through deferring capital projects, increasing efficiencies in clinical care and administrative work, reducing the number of traveling and temporary workers in favor of permanent staff, eliminating tentative, performance-based bonuses for administrative leaders, and consolidating real estate.
The plans set forth Tuesday represent approximately $185 million in expense reductions, according to the network. The cost-saving measures will help the University of Vermont Medical Center meet its proposed $2.3 billion budget for the next fiscal year.
University of Vermont Health Network is requesting the Green Mountain Care Board approve a nearly 8% decrease in rates charged to commercial insurers by the Burlington hospital, the largest by far in the network, according to their budget review filings.
In recent years, the network has surpassed the Green Mountain Care Board regulated budget caps for patient revenue by millions of dollars. The regulatory board approved a settlement with the network this spring to address some of the overrages.
Staffing is the organization’s largest expense, with the non-physician workforce compensation accounting for 36 cents of every dollar spent by the network. In their effort to reduce costs, staffing cuts were “unavoidable,” Broadworth said.
The health network aims to support the staff impacted by the cuts, including identifying other opportunities within the organization, and minimize the “impact on patient care as a result of this decision,” Broadworth said.
Sunny Eappen, president and CEO of the University of Vermont Health Network, said the administrative layoffs and other cost-saving measures reflect the broader affordability challenges facing the health care industry in rural areas.
“Our goal has been to be very transparent and stay focused on putting patients and communities and their health first, and keep making choices that make us be effective and efficient to support them in the long term,” Eappen said.
