UVMMC is serving 13% more discharges with 35% less direct care staff
VHC911 – Stat v.8
Commercial Insurance Profits Up, Patient Access Down
The last VHC911 newsletter showed how growth of Vermont’s commercial insurance premiums coincided with a rapid rise in the University of Vermont Medical Center's (UVMMCs) profits from commercial insurers, ballooning to $801,927,336 in 2023.
Today, we examine whether growth in UVMMC commercial profits is associated with better access to healthcare for Vermonters. In the 4-year period starting in 2020, profits from commercial insurance grew for three years and then exploded in 2023. Over the same period, spending on labor for patient care climbed slightly and then fell. Meanwhile, spending on labor for hospital operations (everything other than patient care) grew steadily. By 2023, UVMMC had the 18th highest labor costs for hospital operations out of 103 peer Academic Medical Centers (see Figure 1).
Figure 1. Commercial insurance profit and labor costs at UVMMC
The rise in commercial profit at UVMMC is not enhancing the capacity for patient care.
The trends are clear and concerning. Even as UVMMC sees commercial hospital profits grow significantly and Vermonters pay ever-increasing insurance premiums, we are not getting better access to care. And what does it mean for patient wait times?
Looking at 103 peer Academic Medical Centers across the country, UVMMC had the 11th highest commercial insurance profit per discharge and ranked the 18th highest on cost for non-patient care labor. There is no question that UVMMC is a high-cost AMC that spends comparably more on non-patient care and less on patient care even as commercial profits grow.
But that’s not all.
In the four-year period that ends in 2023 (the latest data available from NASHP) patient discharges have gone up at UVMMC, meaning they are handling more cases. Meanwhile, the number of full-time employees (FTEs) devoted to patient care has decreased since 2021. FTEs devoted to management and administration has been steady but remains one of the highest in the country (Figure 2).
Figure 2. Staffing patterns and patient volume at UVMMC
UVMMC is serving 13% more discharges with 35% less direct care staff.
The results show UVMMC is a top-heavy AMC, with high numbers of people dedicated to management & administration (7th highest) and low numbers of people dedicated directly to patient care (18th lowest). Strikingly, the number of FTEs available for each patient discharge is declining even as the number of patient discharges increase, possibly explaining why Vermonters have such long waiting times to access care at UVMMC.
These results are presented as ‘Per Adjusted Patient Discharge,’ which incorporates both inpatient and outpatient services. Thus, the relatively low number of people dedicated directly to patient care applies to inpatient and outpatient settings at UVMMC.
UVMMC does not have to operate the way it currently does, and there are many examples of better performing AMCs to learn from. The Green Mountain Care Board heard a powerful presentation by Dr. Peter Pronovost discussing the “Medicare Breakeven program” at the University of Cleveland Hospital system which drove system wide transformation including streamlining management and administration while improving care quality (3.5.2025 - Board Meeting).
No matter what measure we examine, there is a clear need for a change in direction, and for leadership at UVMMC to work cooperatively with state regulators. Hospital budgets should be managed based on a reference such as Medicare reimbursement, an approach being used by other states and AMCs across the country. As today’s results show, it is also essential for regulators to employ monitoring to assure Vermonters that hospital budgets are used to increase capacity for patient care while streamlining management & administration.
Upcoming newsletters will continue to look into examples in Vermont and elsewhere where hospitals and health systems have reduced operating costs while maintaining high-quality, high-value care.
Data from this analysis comes from NASHP Hospital Cost Tool Data Set, Release Date December 20, 2024 NASHP Hospital Cost Tool.