A healthy outlook again for Central Vermont Medical Center
Hospital has retired $6 million deficit
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Judy Tarr, CEO of Central Vermont Medical Center, stands outside the south entrance to the hospital in Berlin, which has returned to financial health after a rough period. |
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By SUSAN ALLEN TIMES ARGUS STAFF - Published: November 16, 2009
BERLIN – Just over two years ago, Judy Tarr took over the reins of the Central Vermont Medical Center, inheriting with the CEO's title a facility suffering a $6 million deficit and the need for unpopular layoffs and program cuts to stabilize expenses at the Berlin hospital.
Today CVMC is operating in the black. No additional layoffs are planned. Morale has improved. And Tarr feels good about the hospital's overall image with the public.
"We have made a tremendous recovery financially," she said recently. "The news is good."
The financial progress is charted on a blue line, showing CVMC operating at a zero margin on Oct. 2, 2002 (a $2 million-plus surplus is considered ideal). For two years finances improved, peaking late summer 2004 with a roughly $5 million surplus. But by late summer 2005, the number had fallen sharply to less than $1 million, and after a steady period, began to plunge to the $6 million deficit in fall 2007 handed to incoming CEO Tarr.
The problems leading to the deficit were complex, including an increase in Medicaid caseload, which doesn't fully reimburse health care providers for the cost of care. In addition, three physicians left the hospital around that time, taking $3 million in revenues with them.
The shortfall was a surprise to Tarr. The new CEO immediately froze a scheduled 4 percent pay increase for employees, announced that some vacant positions would not be filled, gradually laid off employees, and cut amenities like valet parking and landscaping.
By October 2008, the deficit had been eliminated; by July 2009, the hospital was showing a $4 million surplus.
"We broke even in the first year, and we're back where we need to be financially, making a reasonable bottom line," Tarr said of the progress.
She said she meets with any and all employees every three months to talk candidly about what is going on at the hospital, and takes any questions staff might have for her. She said they are forthright in their concerns, wondering about raises and benefits, goals for the hospital for the coming year, physician recruitment and more.
"It is a very honest and candid meeting," she said – a discussion that she said over time has helped boost morale at the facility.
Tarr said the hospital also launched patient surveys to determine what was working for Vermonters who come to CVMC for care, and implemented changes based on credible suggestions. One example, she said, was the ability for patients to register online, rather than having to go through the front-desk registration process.
A national "audit" of performance marked the improvement, specifically noting that the hospital's intensive care unit was ranked in the 99th percentile, Tarr said.
"I think part of our turnaround had to do with an overall improvement of patient satisfaction," she said.
Recently, the hospital launched its latest initiative, working with Casella Waste Management toward a 50 percent increase in waste recycling by the end of 2010. And while Tarr does not take credit because it started before her tenure, the hospital also recently opened the National Life Cancer Treatment Center to provide radiation treatment to patients who previously had to drive to Fletcher Allen Health Care in Burlington or Dartmouth Hitchcock Medical Center in New Hampshire for those treatments.
Still, CVMC is not without challenges, Tarr cautioned.
At the moment, the H1N1 virus – or swine flu – is hitting the Emergency Department, with the number of patients complaining of flu-like symptoms climbing from 57 on Oct. 1 to 118 on Nov. 1. The hospital has opened an off-site flu clinic in Building D with limited hours at this point to allow physician assistants to triage those patients and ease the burden on the ER, Tarr said. (This is not a vaccination clinic, hospital officials stress.)
"This is something we're going to watch," she said of the flu outbreak.
Another concern – possibly an opportunity – is federal health care reform being crafted on Capitol Hill. Tarr said it's impossible to know at this point whether that reform will help CVMC (by increasing the number of people with coverage and ensuring coverage for those with pre-existing medical conditions, for example) or hurt (by shifting more people onto publicly funded coverage that doesn't fully reimburse hospitals and doctors for the cost of care, for instance).
In addition, Tarr said, she continues to wrestle with a physician shortage in the region, particularly primary care physicians and pediatricians.
Overall, though, Tarr said she is pleased with the progress she's seen in her two years at the helm.
"The key is a change in the culture, and I see improvement … and continuous improvement," she said. "That's my mantra.
"We can always improve, even if we're perfect."
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