Key Highlights :
UVM Health Network will eliminate 77 non-clinical staff and freeze dozens of positions under a broad cost-reduction strategy.
The effort aims for more than $180 million in savings through reductions in personnel, postponed projects, executive compensation cuts, and clinical efficiency.
Capital improvements and bonuses will be postponed, and attempts are being made to reduce unnecessary procedures in an effort to stabilize Vermont's growing cost of healthcare.
Key Background :
UVM Health Network, the largest health network in Vermont, made major cost-saving efforts in order to deal with increasing financial demands. This involves cutting 77 non-clinical employees in finance, human resources, IT, and patient registration roles. The measures are estimated to total more than $180 million in total cost savings aimed up to the year 2026. The organization is also freezing hundreds of open positions, additionally minimizing costs
The health network is a dominant force in Vermont healthcare. Its crown jewel, the UVM Medical Center in Burlington, is Vermont's largest employer and hospital and a substantial component of Vermont's total healthcare expenditure. Hospitals represent almost half of the state's total healthcare expenditure. With increased operating expenses and additional regulatory pressures, management at the UVM Health Network felt an urgent need to move forward.
Most of the lay-offs will be in immediate effect, while others will be phased throughout the month of September. The freeze on filling vacant non-essential positions is expected to save a further $5 million. Transitionally supported employees will be eligible for other positions within the network.
Previously this year, the health network board greenlighted deleting executive bonuses outright, an estimated budget-cut that saved close to $10 million. Added to that, there were regulations that forced the network to cut commercial insurance rates at its medical facilities—8% at UVM Medical Center and 3% at Central Vermont Medical Center.
To even more constrict budgets, UVM Health Network will cut capital spending next year by about $70 million. Shovel-ready projects being put on the backburner are emergency room upgrades at Porter Medical Center and parking garage expansion at UVM Medical Center.
In addition to debt restructuring, the network is implementing clinical efficiency measures to help contain healthcare inflation. They include curbing unnecessary diagnostic tests, decreasing lengths of stay in hospitals, and streamlining clinical supplies and drugs. Leadership said that the choices, tough as they are, must be made in order to keep the system sustainable in the long run and continue access to care within the region.