 We're going to begin by swearing in the witnesses for Southwest Vermont. Kim, if you could swear them in if all the witnesses could raise their hand. Here are the testimony you're about to give shall be the truth, the whole truth, and nothing but the truth to help you God. I do, I do. And would you please state your name? Okay. I'll start at Thomas D. Thank you. Steven Majetic. And Tray Dobson. Great. Thank you. And Tom, whenever you're ready, you can take it away. Okay. I have one question before Tom starts. So Abigail, I just click share and then hit the PowerPoint. That's correct. Okay. All right. You're trusting Steve with controlling this, Tom. Okay. Fasten your seatbelt. Are you froze me, Kevin? So I'm not sure if you told me to do anything. So go ahead. Okay. Well, thank, thank you all. And again, we will, we'll share this presentation between myself and Steve Majetic, our chief financial officer and Dr. Tray Dobson, our chief medical officer. And again, thank you all. And Steve's going to be at the control panel here at Bansing. So thank you, Steve. Hey, Steve, can you just go back a second to the opening? Yeah, I just want to show this is a photo from May 22nd. And that's the Vermont Air National Guard doing their flyover in Vermont that day, which was pretty cool. And we had our hospital responders and team appreciated that. So next slide. This folks is just a quick visual of the SV, and this is SVHC, which is healthcare health system. That's our parents, which, you know, the majority is SVMC but 80% of our health system is made up of the medical center. And we, you know, we have a presence in a tri-state region. And we serve about 70,000 people. So it's still, you know, it's relatively sparse. It's a broad region and we have certainly physical barriers. We have two major mountains that we deal with. And we're hoping to see some additional population growth with what's been going on down in New York City and the other New England states. Next slide. And this is just a profile, a snapshot of SVMC. Again, we had our 100th anniversary a couple of years ago. As I mentioned, we're serving, we have a presence in three states, Vermont, New York and Massachusetts. We are the largest employer in the Southwestern Vermont region, employing a little over 1,400 people. And one of the things about our medical staff, I'll just give a shout out, is that it's a great medical staff and we're 100% board certified hospital medical staff, which is kind of unusual for a lot of community rural facilities. We have a number of awards. I won't go through them. There's one I'm going to highlight in a little bit, which is a new award we got this year from the Lone Hospital Institute. I'll talk more about that in a moment. Next slide, Steve. So this is just a snapshot of our vision 2020, which is our strategic roadmap. And I think I've mentioned this to you in the past, that it's really based on three strategic initiatives. First one being building a partnerships. Our major partner is Dartmouth Hitchcock. And we've been affiliated with Dartmouth now for seven years. So it's been a long journey with Dartmouth. We are, this past 12 months has been disappointing because with the impact of COVID, as well as Dartmouth going through a full asset merger with Granted Health in New Hampshire, we have not been able to move our corporate linkage closer together. But we're still confident that that will happen. Hopefully that will be consummated in 2021. But the partnership strategy is probably our most critical initiative. We are trying to transform our health system and moving away into much more of an ambulatory care model. And close to 80% of our revenue is ambulatory at this point in time. And of course, we need to be sustainable. We need to be able to provide a high value care at an affordable cost. And that's something that's really something that we all focus on very much here at our health system. Next one, Steve. So I'm going to actually end on this slide here. And at least my piece of it. And this is a one pager. And our board asked us to put our strategic plan together on one page. And this is a graphic that kind of explains really our key initiatives and where we're going. At the top of the page, you see the icon of a safety hand. That's representing the affiliation and partnerships that we're pursuing. As I said earlier, Dartmouth is our major partner. And we fully expect to be part of a member of their system. They will become our new care incorporation. We're looking to do a combination agreement that will really integrate our systems together. But Dartmouth is not the only partner we're pursuing. We fully understand that there are certainly a national class organization, but there's things that they can't provide for us. So we are part of our strategy. We are reaching out to other institutions and community organizations to partner with. And for instance, I'll give you an example. One will be some of the hospitals in the Albany region, primarily St. Peter's. We're talking to them not to do an affiliation or any type of corporate linkage, but we're working with them to help local, help some of their providers come to Vermont and meet some of our needs. And we're an example of this would be for GI services. We're in the midst of developing a contract with them to help for GI services that have been, we've had shortages of GI physicians. And as one example, and we're also looking at partners in the area of long-term care and key specialty services and behavioral health. So we understand we can't do everything ourselves. We need other organizations. So this is a major relationship building strategy that we're creating. And then the columns underneath the partnership really is our key operational and clinical initiatives. Under advancing clinical services, you know, we understand that we're primarily a secondary and primary care hospital. We're not a tertiary care center, but we know we need to enhance those primary and secondary services in order to help help to provide the needs of our community and allow more of our patients to stay local and not have to migrate down to Boston or over to Albany, or in some cases, make a two-hour trip up to Lebanon. So we're trying to enhance those services. We are looking to not become a psychiatric hospital, but we are looking to enhance our behavioral health and substance abuse services. That's a major initiative that we put in our plan and we're working with different providers, especially our local designated agency to be our partner in that. And the area that's one of our major changes is moving towards our long-term care strategy. We are bringing the partner in who has much more experience and capital in the long-term care area to help partner with our nursing home. And that's an application that will be submitted to Vermont in a very near future. From our operations standpoint, we are continuing to integrate and strengthen our ties with the Dartmouth-Hitchcock Management Services Organization. They are running Dartmouth now is running our physician group practice. Dr. Dopson is our medical director there. He's a Dartmouth employee. We have about 125 providers in that group and that's a major growing segment of our operations. We understand that sustainability is going to be critical and we need to have strong operations to do that. And we think we can attain economies of scale by working with organizations such as Dartmouth to share our overhead costs in many areas such as IT. Next column, the gray column is improving our infrastructure. We're not the oldest hospital in Vermont but we had the oldest physical plant. We have not made major enhancements. We do have a major CO1 that has been submitted to the Green Mountain Care Board to modernize our emergency room. But we have a series of CO1s that we'll be submitting over the next few years to modernize our campus. And I would say that is our major Achilles' heel in terms of our operations is an outdated infrastructure. But we're also looking to expand our workforce. We're developing relationships. We're developing training programs. We have a major relationship with Castleton University. Their school of nursing now is down in Bennington. We're partnering with them and we are looking to aggressively grow our nursing workforce as both the need to meet the needs of the health system but also to create opportunities for employment in our region. And now we've come up with a system where if a person goes to Castleton and gets their four-year degree and comes and works with us up to six years we'll pay 100% of their college cost. So we're getting good success with that. And of course, we have a huge infrastructure need for IT. As we move into Dartmouth-Hitchcock system we'll migrate to their Epic platform. Our expectation and desire is that they'll help us underwrite that. And that will be a major change for us over the next few years. Our current platform is metatechnics. It's rather old. And we're moving our next column in the goal. We're moving into primary prevention and community development. That's a major initiative. We know in order for us to enhance the health status of our community we have to move beyond the traditional role of just providing healthcare and working on other social determinants of health. We're actively involved in housing. We're doing many things there in terms of helping to redevelop Bennington. We're working with food insecurity. We were fortunate to be able to work with Bennington College to get a million dollar grant from the Mellon Foundation to work on food insecurity. And that's a big project moving forward. Again, we're working on the educational and job sector. And we're doing major community development, the downtown Putnam project. The first phase is about to be completed. The total project is about 58 million dollars. The first phase is 28 million. And we hope to be done with that first phase by January and then start to do the second phase. And this all evolves towards the far right-hand column towards our population health and value-based care strategy. We know that our future is not fee for service. It's much more based on the value of care that we provide on outcomes-based management. One thing we're proud of is that the Lone Hospital Institute just named this as one of the top hospitals in country for value of care being rendered. And they study the cost of care, outcomes, utilization, and also investment in community health. And our health system, our hospitals scored very, very high, one of the highest in the country. So I think that's just an indicator of how serious we're taking the initiative to move away from the volume-based model and move towards an outcome-based model. And it's something that we think that journey, we're early on in the journey, but it's one which we will continue to aggressively focus on. We understand we need to drive down the cost of care and we think focusing on value will be a way for us to do that. The past year has been something that we've been consumed by COVID-19 pandemic as every hospital has. And I'm gonna ask Trey now to give an overview of our initiatives of what we've been doing there. And I wanna also do a shout out to Dr. Dobson for a remarkable job he's done in terms of leading us to this very challenging time. All right, thanks, Tom. Can you all just real quick let me know that you can hear me okay? We can. Great. Super. So I'll just start off by saying, we went right into a hospital incident command structure like all organizations in the state. What you're looking at there is just about half of the committees that we formed. But we really quickly realized that our staff was paralyzed by anxiety and fear. And you remember those days, late February, early March. And when we spoke with them, we could see what they were concerned about. They were concerned about were they gonna have to let patients suffer on gurneys in the hallway? Were they gonna have to treat patients without the proper personal protective equipment? Were they gonna spread the disease to the family? That fear and anxiety really was gonna inhibit our ability to respond to this. We saw that right away. So we established five principles and I'm actually gonna go through them real quickly. The principles were the first and this was our guiding principle is that our priority is the safety of our staff because without staff safety we can't take care of patients. And we said that and we say that over and over and everything we do is governed by that statement. And another way to look at it and you may have heard this phrase before but during a pandemic, there is no emergency. And what I mean by that is there is not a staff member who is gonna be asked nor feel compelled to go take care of a patient unless they have on all of the PPE. They're not gonna be doing partial and taking care of patients. So someone is having an emergency whether that's a cardiac arrest whether that's respiratory distress whether that's simply having a fever staff will not go into that room and will not be compelled to do so until they have all of the PPE on. That actually gave a lot of relief to our nursing staff, our hospitalists, our emergency physicians, all of those on the front line and then that allowed us to continue on. The rest of those principles were we were gonna empower the leaders of these committees from the slide before we weren't gonna just have them be directed to. So we appointed people and they could make decisions and move. We knew that was important in this pandemic and an emergency. We also said two things we're gonna have a supportive culture and we're not gonna be hampered by resistance and negativism. And we still say these principles daily in our incident command and it's given the staff the confidence that they need and it's helped us move forward. So next slide if you don't mind, Steve. So that really allowed us to move into these volume surge preparations that every organization moved into but I feel like we were able to move into it with a lot of unity, a lot of support from staff across all disciplines. Now that their anxiety had been lessened now that they knew that their safety was the priority. It allowed us to identify and credential providers who might have been in the outpatient setting before to be ready for the inpatient to cross train our staff to secure additional beds and then to implement drive through COVID testing which we were, you know, fortunately one of the first places to do so which was a testament really to the staff and their belief in what we were doing plus the ability for them to be empowered. Interestingly, it's not that interesting the story but it was for me. We started talking about it on a Friday night and actually implemented the drive through testing by Saturday evening and normally not much gets done on the weekend. So I thought that was incredible. Next slide please. Then we knew that we would have to be innovative because securing PPE was gonna be difficult. Like everyone in early March, we started reading the reports, we started checking with our suppliers and our biggest concern was not enough respirators and everyone I believe knows now that everyone's been educated through the media that there's really two types of respirators. There's disposable respirators which are known as the N95s typically and then there's the reusable respirators. So we quickly identified about 40 reusable respirators before and secured those before all suppliers had exhausted their supplies of the respirator. And that wasn't enough for us, not near enough. We were very nervous. Everyone in the state was very nervous. Everyone around the country was very nervous. So we decided to be innovative. We continued with our conventional suppliers but then we got innovative. We worked throughout the weekends and over nights and we actually reached out to manufacturing groups locally and working with Mack Molding in Arlington. We bought and secured these masks that you can see there. Those are actually snorkel masks. They're used in snorkeling. We bought 300 of them very easily. And then Mack Molding took the snorkel off and repurposed and retrofitted HEPA filters. So those individuals you see right there, everyone got their own mask. Plus we have additional ones and they last a very long time. They're reusable so people just keep them in their locker and we sort of pushed the respirator concern out of the equation very early. And again, that gave our staff the confidence and gave us a little bit of breathing room, no pun intended. All right, next slide. We also knew about six weeks later when it became apparent the surge was either over or not coming in a big peak but rather more of a plateau that our non-COVID patients in the community and around the nation of course were experiencing harm because they were not able to see their doctor and undergo usual health maintenance procedures, whether that's medication adjustments, whether it's procedures such as colonoscopies and screening things, eventually those things catch up. And then the national data started showing us increased rates of death from cardiovascular disease and other diseases. So we decided that we needed to rapidly recover volume to decrease the morbidity and mortality in the community and fulfill our mission with a main focus on safety. And so that's the plan that we involved everyone in incident command and staff to move forward with and develop. Similarly to when we were preparing for surge, there was concern, there was anxiety about how are we gonna do this in a safe way? And what we did is we empowered people all the way down at the ground level of those taking care of patients to make the decisions that safety's first, no matter what. Next slide. Some of the things we decided to do rather than gradually opening one or two departments and seeing how they go, we actually opened all sites at once thinking that's the best way for our staff to be engaged and learn the safety requirements and the efficiency requirements. And it actually worked out really well with the exception of dentistry which was not allowed to reopen. We opened every site, we limited the volume through there. We opened every site. We were very fortunate to be able to follow all of the CDC recommendations and guidelines and the state. Most of that is a testament to our staff. Some of it is just circumstantial in the way the organization is laid out. And then we did the things that you know about that hopefully all medical centers were able to do. The screening, the distancing, the novel ideas on how to expand waiting rooms and use other approaches for patients, masks for everyone and limiting the number of visitors. Next slide, please. And then once May kind of got through we could see our volume starting to pick back up. We could see the morbidity decreasing. We could see the patients, their fear of coming into the system had dropped significantly with our staffs focused on safety and also our staffs lack of anxiety and fear here locally. So then we decided to focus on three things from this operational recovery. We knew we needed to innovate. We knew that we couldn't be delivering healthcare in the same ways and we knew we needed to do it in a way that patients could afford. We knew that we needed to become more efficient. And then something that we didn't predict but we quickly realized is that we had to become a resource to organizations locally and regionally as they started entering the phase of restarting their own businesses and school systems and organizations. And I'll talk a little bit more about that in a moment. Next slide. So for innovation, we of course did telemedicine the second bullet there that was very successful in our entire state. Of course in communication with multiple hospital systems and medical staffs around the state to make sure that worked out for everyone. And that has been a very positive experience. We then also very early recognized how are we gonna keep people out of the waiting room but have them ready to come in and feel comfortable and safe. So we quickly grabbed a page out of the playbook for restaurants and other organizations and we developed a virtual waiting room. We made it very simple and very reliable. Our IS department did an awesome job and developed a homegrown system where overnight really the flow of patients changed where they pulled up into the parking lot. There were multiple signs up that told them how to enter their number, make a quick phone call and they waited in their car and they still do this today. And then they are texted when they're ready to come in be screened and see their provider. And the third bullet there was also quite unique. We did this sort of in collaboration with Dartmouth-Hitchcock but we reached out because we knew that our offices would be sort of overrun by patients worried that they have COVID every time they have a fever and actually rightfully so should be worried and we should be screening them and testing them. But doing that in 25 different locations whether it's a orthopedic office or a primary care office was not the best approach that we need to standardize it and put it in one area where we have the right equipment, resources, the ability to monitor that equipment and resources for excess use. The staff trained to do this. And so we developed something that we called the respiratory evaluation center or the REC. Now we developed it before all these extra diagnosis or extra symptoms of COVID came out. So if I had to do it all over today I probably wouldn't call it the respiratory evaluation center. However, as the fall approaches and respiratory viruses other respiratory viruses come into play maybe the name will be fitting. But this is a separate entity from our emergency department. It's a separate entity, entrance and entity from our practices and our express care. It is staffed by nurses and providers whose sole focus is on helping people that have symptoms that could be COVID related. And that's just been a big win for individual patients then for the community. And then for all the referring offices who can now say let's focus on other types of care and if we get concerned about COVID let's send the patient there so they can get rapidly triaged and assessed. We anticipate that the volumes here will increase even further in the fall and winter as other viruses start affecting people. Next slide. And you may be aware that we unfortunately had a concern for an outbreak in Manchester. This was after the Winooski outbreak. And just to remind you there were about 50 patients that tested positive at an urgent care center not operated by SCMC in the Manchester area. It caused a great concern because the information went out quickly before the state could be involved and businesses shut down, camps were canceled and it became very clear that the area was nearly panicked. And when I say that that is what happened we hope that wouldn't happen again but it was the first outbreak in Southern Vermont or at least supposed outbreak. And so people responded on social media they responded throughout the community in a shutdown manner. And so we stepped in as quick as we could within 24 hours our nursing staff and our providers had had changed their job description for the next few days to moving up and into the Manchester area and assembling a pop-up clinic. On the same day that the Department of Health tested 400 people we did the same at a different location and over five days we tested nearly 1500 individuals in the community. So you may be aware that the result of that was about four or so positive cases of those 60. So no one's really sure what happened but nonetheless the response helps the community restart. I mean some of the businesses restarted almost immediately as soon as the test results started coming back their anxiety decreased we're in constant communication with them and I think we're now very prepared in Southern Vermont when clusters and outbreaks occur of how to systematically close down places that need to be closed down but not close in entire disconnected organizations which only leads to more panic and fear. Then we started working with many of these organizations these schools and let me just tell you what was such a surprise. As I was reading information from the state as soon as it would come out and from the federal government focused on schools or focused on businesses I've been struck with how well-written things have been how the guidance has been concise, direct and not trying to pigeonhole businesses at schools into following something that they wouldn't be capable of following but it left this one hole and that is all of these organizations and schools were kind of like we were in healthcare back in early March they were incredibly scared they still are today as they restart they're incredibly anxious opening board they don't have a standard voice that they can speak to and get their questions answered and so we started doing that and I'll tell you it's pretty easy the questions that they need answered the statements they need to be made to them to get them to balance between this again this paralysis of fear and anxiety on one hand with other staff who are just complacent and in denial getting that balance going I'm losing you just one second I'm sorry Dr. Dobson Dr. Dobson I lost you you said other staff who were just complacent and in denial about getting that balance going and then I lost what you said I'm sorry oh I'm sorry well what I was saying is what we've realized and again this was a little bit of a something for our eyes and I'm telling you I'm sorry just a minute somebody's talking yeah somebody thinks they're on mute but they're not and Trey I don't know you were coming in so perfectly and then all of a sudden your signal isn't as good so I don't know well I apologize can you hear me right this second and I'll try to get through it yes yes yeah all right I'll speak quickly these organizations are everything from museums to schools to for-profit businesses to not for-profit and just being able to be the agency that they can reach out to and help them with questions and help their staff and sometimes help their customers has not typically been a role of a hospital system and we've embraced it I'm very happy that we've been able to embrace this that management is so supportive of it it actually doesn't take that much of an effort and it leads to these businesses I'm going to tell you I've had some of these museums open up two weeks two weeks early oh you froze again you had some of the museums open sorry but that my my Wi-Fi must be dropping here but that's actually my last slide so hopefully the question and answer is I'll be able to come through okay so Trey maybe you could just finish that one thought you I think you said that they were able to open two weeks early but we couldn't really catch it that's right a couple places open to two weeks early and some of the schools what I was saying is the teachers are really finding the ability to have presentations and to answer questions that they have it really helps them understand what they need to be doing okay so I will stop there thank you Trey thank you Tom now I'll take over we're gonna go through the financial performance and FY21 budget request this slide in front of you has the FY2020 projection compared to the budget I qualify the projection that it was prepared after the June financial statements I'm not proud to say but every project projection I've done since March has been it changes it seems like almost every day and as we get ready to close our July financial statements I do anticipate the projection for FY2020 to be a little better than as shown here also we don't apologize for that Steve well it's good news yeah it's good news and also in this projection there's no stabilization monies we just filed for the state grant and we did not include that in the projection so whatever we get there will also assist us in our financial recovery how much did you ask for Steve there's no place in that ask in that grant there's no place for an ask Kevin what you do is you submit it you submit all of your information and AHS is going to calculate it based upon what was the total of losses that you submitted well the revenue loss for the basically for the COVID period ranges anywhere depending on how you want to look at it between 12 and 15 million dollars so all of that input was provided to AHS and then they'll do a calculation based upon their methodology thank you okay so most of the presentation I will compare us FY20 to FY20 budget to the FY21 budget and show the differences that way because 2020 is a let's just call it a strange year and that's being nice as you can see our budget is a little bit better than a break-even budget our revenues will be under last year's budget and our expenses will be slightly higher than last year's budget and we'll go through all of that in the next few slides our historical operating performance as you can see from 2015 to 2019 we've almost every year except for a 19 outperform our submitted budget we saw a decline in 19 and 19 we I'll talk a little later in the presentation some of the items that had us below budget and mainly the one care program as well as a decline in our volumes that we had projected on our net patient service revenue request like I said is a 5.1 million dollar almost 5.2 million dollar decrease the most significant assumption in this budget is that in our pre-12 month pandemic pre-pandemic 12 month volume trends we were trending 4% below previous years and our 2020 budgeted levels and roughly 4% has an impact of about $7 million so when we were building our budget this year we were like okay what baseline should we do and we're doing this in late May and to June and early July and where were our volumes going to be? When the bulk of the assumptions were disgusted with our leadership team we were seeing the month of the beginning of June we were running at about 80% and our idea was to get back to 100% by October 1st of our run rate which was actually below what we had budgeted so that is the foundation for our volume assumptions in our budget to get back to the run rate of the previous 12 months in the pre-pandemic period and so as a result our volumes are lower in this year's budget than they were in previous years and the $5.2 million is made up of volume in service of declines and we are asking for a rate increase and about $1.87 million and that's made up of a charge increase that has an effective rate of about 3.46% or roughly $3 million for all these slides I rounded all of the numbers so it may not exactly hit but it's in the ballpark. Medicare increases we put about a 1% in looking at the proposed regs for Medicare for next year. It's about 1.07% to be exact. We also applied that to the fixed payment model the one care Medicare because we still haven't received guidance from one care due to continued negotiations with CMS and CMMI. We did put in a pay or mix shift. One of the concerns that we have each year and we've seen it, the pay or mix shift on more to Medicare away from commercial that had an effect of about negative $550,000. Office telehealth reduction. We are actively, as Trey talked about briefly, as we have patients that can use telehealth we're using telehealth and reimbursements while we are getting paid from insurance companies and from Medicare and Medicaid there is less reimbursement. So as we substitute visits to telehealth there's less cost. Now some of those visits are great over telehealth. Other visits aren't. So there's a balance that we have to do and the medical groups team went through and the budget while we have visits some are telehealth and some are in office and the telehealth will have a negative impact on our revenues about $430,000 due to the lower payments. And then we also increased our bad debt and charity care by $600,000 in total. So as a result of what we get paid for in this budget there's only a really a rate increase of $1 million, $870,000. The biggest chunk is the rate increase of 3.46. Gross charges will be a 5% increase. We're only going to increase approximately 69% of our charges. There'll be no cross-deboard increase on the physician office practice charges. When we look at that and the reason we're doing that most of it is on a fee schedule. Most of the physician office charges and our charges are still above what we get paid. And we've been closing that gap but we still got a ways to go. So that's why there's no increases on the physician office practice charges. Drugs and med search supplies there'll be no cross-deboard increase on those charges because that's on a cost plus methodology which is not changing. And the $3 million increase in charges is about 1.79% of the total and net patient service revenue. So depending on how you want to look at it we can the real effective rate is 3.46 but it's not a big number on the total net patient service revenue. I think I talked about the Medicare increase and the other items but bed debt and charity care at the bottom you'll see that our budget was 8.6 million. We're increasing it to 9.2. When you put the charge increase into the bed debt formula about half of that $600,000 is due to the charge increase in the $3 million and about $300,000 is a modest increase considering the risks that we may have in this part of the state actually part of the whole state and in the country due to the economic turn down due to the pandemic but it's a risk for us. We recognize that risk and we will monitor it closely. On the volume side, we're budgeting 150 less inpatient cases and inpatient volume has not come back to our budgeted levels even as of this past week. We are trailing on inpatient volume to our target. We were trailing last year. Our emergency room has been one of the services also trailing since the pandemic but was also down and I'll go to the next slide that shows I did two comparisons in these slides. The inpatient volumes when I looked at actual five months, February 20 to February 19, we were behind. As you can see all the major categories we were behind a year to year, five months actual. And then when we look at our budget we were behind. So this year, we thought long and hard and again, our biggest assumption is volume will be was built off of the 12 month run rate prior to the pandemic. Included in our budget is we are going to participate in Medicare Medicaid and the Blue Cross Exchange. We also participate in some of the smaller programs I didn't bother highlighting them, they're not material. Medicare is about 24 million. Medicaid, almost 7.5 million and the Blue Cross Exchange which is now an upside only model for 37 million. As of today, the corridors and the risk corridors still are not resolved. And so if those risk corridors are too large we reserve the right to change our mind but we are committed to this but we gotta make sure that those risk corridors are acceptable to leadership and the board. So just recapping revenues down, rating freeze of 3.46, volume to be at the pre-pandemic and one half of 1% increase in bad debt and charity care. So that's the net patient service revenue portion of the presentation. And as you can see, I highlighted on this schedule just that our 19 audited was 164 million. The budget of 2020 was 172 and we're coming in about 167 based upon those volumes, pay or mix assumptions, bad debt assumptions and rate increases. Going back to our operating performance to show you the slide before but I'd like to just spend a little time on where we were before the pandemic. In February of 2020, we were five months into our fiscal year and we saw ourselves with an operating margin that was about 1.17 and the leadership team was working on an action plan to bring that back to budget because our volumes and our revenues were trailing. And we then prepared a plan that was going to add about $2 million to our operations mainly in expense reductions. We looked at a couple of services and we were going to get up to about 2.3%. If we probably would have been below our budget this year if everything panned out and we were targeting let's call it 2.5% and then we were going to continue to work to improve services. As Tom mentioned, we've been talking to St. Peter's to try to bring some of their physicians over to do services in our facility. So all of those things are being talked about but we had an action plan getting, actually we started to implement that would get us up to that 2.3% operating margin which was significantly below our budget at a 3.4 and below our previous five year run rate but the pandemic then hit and a lot of those plans had to be put on the shelf and are incorporated into the FY21 plan. However, we coming out of this plan and out of the pandemic and we put a projection together that's only coming in at about a 0.9 probably we'll do better than that with the stabilization July being a little better payer mix being a little better than we but we still have some issues. We need to go over with our auditors on the accounting of some of the stimulus money and will we have to pay any of it back? So we're going through that exercise right now and we'll incorporate them in our future projections. So as you can see, we were trailing behind what we were budgeting. We're gonna come in less than what we anticipated. And so, I just wanted to go over some of our indicators. Profitability, we've been consistent. The biggest item that I can really look at when I look at 19 below the 2018 results was there was an impact, our volumes were down but the impact of one care Vermont participation in FY19 and 20 pre-pandemic had a negative contributing was a negative contributing factor in our financial performance. However, as Tom mentioned, we're committed to this program population health or whatever we want to call it. We need to, we need as a community, as a state to curb the cost of healthcare. So we're still committed, but it had a negative effect on us. And I went back and I looked at several other presentations we did to the Greenmount Care Board on our budget. And one thing that we did early on before we got into one care, the SEMC transitional care program, we documented that we reduced utilization prior to going into one care by over 300 admissions annually in countless emergency room visits. And we did it before we were in this population health model and I think that that is having some of the negative effect that we're feeling in the first two years of participating because there wasn't that access in our base plus our aging population. So that's sort of, I justify in my mind some of the negative performance we've had. Doesn't make it right, doesn't make it good, but our one care 19 results shows that we're gonna be $1.5 million, we're gonna have to pay back and we're gonna owe Medicaid 200,000. And the other thing that we do pay in, we pay in about a million five of dues and we can talk about that number but directionally in our expense base is a million five and there are some revenues that offset that. But there is a cost, but there's a big learning curve and again, I think we squeezed some juice out of the opportunity prior to joining the program. So this slide, very busy slide, but I tried to show that if we were on a total fee for service model for 2019, we would have probably had a 4% operating margin. Our audit results were 3.26 and the 4.9 is if I extracted and took and made all of our one care, took out the expense, took out the risk that I'm gonna have to pay back. We probably would have done better than our budget but we're in this for the long haul. So I'm just gonna move on off of that slide. Another item that our operating indicators is that we always talk about cash on hand and you can see, I don't know if you can see on the slide, our cash on hand is always low but our parent holds our investments and our cash on hand will be in the 170s at the end of 2020 and 2021, 172, we're being very, our finance committee endorsed the fact that we're not gonna put a lot of money into or a lot of upside on investment earnings while we have an investment policy that we follow. We only put in about a 2% gain on our investments. Our investment advisor advised 5% but this is all non-operating and hopefully we hit the 5%, 6% but for conservative, we were a little late this year on our assumption, especially due to the volatility of the market right now. You'll see that our debt service coverage ratio will be a little higher this year and in our budget, it will be lower and that's due to the operating performance at the capitalization ratio will be at 25% but most health systems are in the 35 plus percent and as Tom mentioned, we're getting old and that's what my granddaughter tells me too so they say Bampi, you're getting old so but our physical plan is getting old. Next slide I have is the operating expenses just highlighting it. Our expenses are gonna go up about 1.4%, about $100 million of our $170 million is related to people. We have salaries and wages of our staff, our benefits and our providers from the Dartmouth-Hishcock PSA arrangement, all of our providers, 99% of our providers are provided through Dartmouth so people cost are about $100 million. In the labor, due to the pandemic we have not given a base salary increase however in this budget for 2021 we will give a base increase earlier in the calendar year than we typically do of 3%. We did add about 13.5 FTEs to the budget related to the blueprint. Our PHO is stopping its existence and they administer the blueprint grant so we're gonna transfer those 13.5 FTEs over from the PHO to the hospital. We also have new functions as Trey talked about. That's about 11.3 FTEs and probably will go up since we did the budget. We are scheduling all our patients right now and our scheduling department, the volumes are just too high and so we'd probably be adding some FTEs there. And then we did, you know, in our management action plan we had about 40 FTE either functions have been eliminated due to redeployment, changing its staffing models and we're using some national benchmarking tools and as well as attrition and some retirements. In our employee benefits, health benefits are projected to go up 10%. Our advisor and our actuary was pushing us and to get it up closer to 15%, we put 10% in the budget. There may be some risk there but we think we can manage that and we will manage that. The Dartmouth PSA will be up 2.3%. Just a footnote, in the narrative, we put 5%. That was a typo, that was an error it's 2.3% and basically went up because we were able to get a neurologist and an endocrinologist that have been difficult recruits. And I think Trey would say that all recruiting has been difficult for providers and hopefully we get some relief there in the future. Supply cost, we put a 5% inflation factor, cost of drugs will go up about 8%. We are using the 340B purchasing, provider tax, there's no, you know, is by definition and interest will go up a little bit due to a use of our line of credit. I'm gonna try to get through the next slides in a couple of minutes. The balance sheet we present here, the highlight that I would go is the middle of the page we'll be using our line of credit to basically pay off the Medicare advances that we got to keep the cash balance where it needs to be. And, you know, other than that, you know, there's not a lot of action or movement on the balance sheet to discuss. Stamina cash flows, as you can see, we do have the increased line of credit at the bottom and the repayment of the advances. When we did the budget, we expected the advances from Medicare started to be repaid in August because we received our first advance on August, on April 3rd and they said in 120 days, however, Medicare has not started to take the money back. I do believe editorial comment that they are negotiating with the hospitals and Congress not to take all that money back the way they were proposing. So this may change and the use of our credit line, you know, if the repayment of the advances gets extended, we may not have to go into the credit line, thus reducing some interest expense. Service line adjustments. So we really didn't have any this year. One thing that added the anesthesia group which came aboard January 1 of 2020 was now in for the full year. And those two difficult recruit, the endocrinologists and neurologists are filled. So then they were services that we've been trying to recruit for years. And I'll go through the risks and opportunities. They're in the narrative, but the largest risk is what is volume going to do? We see, we compare a weekly stat report. We call it our flash report and it's all over the place. One week we're at 105% of where we think where we're gonna be. The next week we're at 76%. The next week we're at 82, then 94%. So volumes are still a wild card and no consideration for a second shutdown surge or any kind of slowdown was included in the budget. What's the long-term effects of COVID-19? If anybody has the answer, please let me know, but there may be greater unemployment, higher Medicaid volumes, higher bad debt. Quality of employment. Will employers be able to provide health insurance? Social determinants of health. We've made a lot of progress here with the blueprint and our transitional care. And as Tom talked about, we got a grant for food, but during this, kids, they haven't been going to school. Will they be going to school? So we'll have to see how that all shakes out and what's gonna happen to commercial volumes. 340B program, it's about a $5 million positive to us annually. It's on a constant attack, so it's a risk. Population, getting older, we talked about earlier. This is a slide from last year. We beat, going back, Bennington Banner had an article that the over 65 population is going up and up and it was actually more than the strategic plan that we prepared last year. Payment rates, I'm anxiously waiting for the one care Vermont. I'm part of the finance committee on one care Vermont and there's a possibility that we could get up to 4.3%, some published out of the feds, but still to be determined. But if we can get more than that 1%, that will help. That'll help all hospitals. The provider-based billing continues. That's a $4 million impact to our hospital. There's a proposal to continually reduce it. So that is not in our budget, that is a risk. This proportion of share payments is, as you can see, here's our history, not going up, bad debt we talked about, but here's all the actual numbers. So you'll see some extra pressures on the PNL and our team to collect. We do have some upside items. We did hire a orthopedic surgeon that will starting either now or in a couple of days. And we did not put any additional volumes in there, but we're hoping that he can give us some beat with the previous provider who left during that 12 month period. So we think we got some upside there. So we may have some additional volume. And Tom talked about working with over in St. Peter's, the GI group. So we have an agreement. The GI group will be coming over. We've had a challenge in GI. We've had a lot of locums. We've recruited some people, they've left, they come back, but I'm not proud of it, but we haven't hit our GI procedure targets in the past four years. So we were conservative. So we have some upside on the contribution margin there from GI that can happen. Other risks are, we did not budget for contracted labor in nursing. We have a new VP of nursing that believes that that's a solid assumption, but I just wanted a full disclosure that we do have some risks there. And she acknowledges that there's risk, but she's willing to manage that. And as I talked about earlier, there's some risk with our employee benefits. Inflation, we put in inflation for each expense category, but who knows? What's gonna happen? You hear the word recession, you hear the word inflation, you hear a lot of different words. So there's some risk there, but there's also an opportunity. We're working with Dartmouth on some additional 340B group purchasing options, but 340B is a risk as well. So we may have some opportunity there. The one care Vermont dues that we put in the budget, we're based upon 2020 dues and they are proposing, but it's not approved yet by either the finance committee or the board of trustees of one care to reduce our dues down. So this may be an opportunity for us there. Regulatory rate increases with tension of providers, volumes, payer mix, political climate, all our other risks I can go on, but I'll move on to capital and I'll wrap up with our plan spend is about 5.7 million. We put a hold on our capital budget this year and we are about to open it back up, but we will take our 2020 capital budget, which we put a hold on during the pandemic and we will spend that money between now and January, which bleeds into the FY21 fiscal year and then we will probably do about $3.7 million of replacement capital. We don't have any specific projects now. We'll be doing an evaluation, but the cash flows will be about 5.7 on capital. As you know, we have the emergency room and main entrance project. When you get ready to go into a $25 million project for a hospital our size, you got to squeeze your capital as you, your capital spend in the years before. So we have that CON in, we're working with Don and Jerry and team on questions and hope to have that all resolved shortly. And then we will be looking at our cancer center, which the proposed cost about nine months ago could be as much as $10 million, but we got to get through the ED and main entrance project. So those would be the major items coming down the road. So I will take a breath and stop and unshare my, I hope I do this right. Okay. So thank you and hope it didn't go too fast, but we have questions. You definitely would fast, I think we got it all. So we're going to start questioning with our Bennington native on the board. Remember Pelham, Tom? Well, thank you. I was flipping pages fast here and too fast probably, but that's okay. I mean, I look at the step back and look at the big picture. And it's, you've had five years of decent operating margins and your rate increases, charge increases haven't been that great, 2.8% to 3.4%. And but I have every faith that you will weather this with all the risks that you've laid out. I just have some small questions, basically. You know, there was one point where you're looking at a deduct of $500,000 in Medicaid having to do with the aging population of Bennington County moving from commercial to Medicare. And I'm just wondering if there's any reverse of that from people who move from Medicaid to Medicare. Is there a positive, some maybe minor positive offsetting revenue side to that dynamic? So, yes, there is, Tom. If they go from Medicaid to Medicare, there's a small increase in our reimbursement. The focus in our budget presentation and what we really focus on is the shift from commercial when a person is under 65 working, having the blue cross card or a signal card to Medicare, that's the big gap. And that's really what that $550,000 is. You know, it going from Medicaid to Medicare or vice versa, it doesn't move that much, but there's a big gap when you go from commercial to Medicare. No, that makes sense to me. Yeah. Just looking at the, I went back and looked at your 2020 budget and actually word search for the word travelers and locum. And I found it, I found locum wants happening to do with physicians. So, but you mentioned travelers in your presentation a little bit today. And I'm just wondering, you know, where you stand with travelers, maybe what the last few months have been where you stood with travelers at Southern Ramab, what happened during the COVID intensity? And then as you're coming out and heading toward 2021, you know, what do you see in that regard? Also kind of thinking about Southern Ramab College that you were on a path to, you know, develop some employee recruitment in that, you know, at that institution, which is now off the table, given its closure. So just thinking about travelers and labor force here. So, and you noticed there's in one of our risks we put in that there is no travelers on the nursing side budgeted in our budget. So we have a risk there, okay? Our new chief nursing officer is quite confident she can achieve what she needs to not having travelers. And while Southern Ramab College closed, we are working closely with Castleton. And I think Tom mentioned that early in the presentation. The word loathom. Just two points, Tom. One is that our C&O has been able to eliminate all travelers since she's been here. And she's been here now six months. So we think the assumption is a pretty good assumption. She'll be able to continue to do that. And the Castleton relationship is continuing to grow. So we're optimistic that it's gonna be a successful program for the recruitment of nurses and hopefully we'll keep those traveler numbers off the books. So where were you on travelers numbers before you didn't have any? We were very low. We were less than half a million dollars a year. Okay. Just curious as to kind of what you see given that you're Southern Vermont in terms of maybe talent and the kind of real estate market or healthcare market, are there people that you're seeing are looking to get out of New Jersey and New York and places like that and head to Vermont? I think, Tom, I think like a lot of places in Vermont, we're seeing an uptake right now. It's the first uptake I've seen in my 12 years. And certain areas like the North Shire region, Manchester, Dorset, it's a very hot market there. But even in Bennington, we're seeing movements there. So we're guardly optimistic that that may stay on for a while. But I can't say it's gonna be definite over a long period of time. But right now, we're feeling a slight uptake and we're actually seeing the first increase in the real estate market in 10 years. We did not, Tom, we did not make any assumptions on that in our budget because it's just too early. Maybe next year, maybe next year, that's something we will consider. Well, I still own some land in Arlington if you know anyone that's interested. So I'm looking at your uptake in the Medicaid, in your Medicaid line item of $106,000. And I'm just wondering how close is that increase to covering a projected increase in services to Medicaid folks in 2020, 2021? So you're projecting $106,000 income on your Medicaid NPR. But obviously that's not gonna cover the full increase in costs. Do you have any sense of how much is being left in the table or being shifted somewhere else? Yeah, Medicaid's been, I'm looking at Jim Roy, my controller, because the $106,000 number doesn't resonate. Jim reports that our Medicaid volume has been pretty flat for the past couple of years. So in our 12 month run rate analysis, we saw it flat, so we left it flat. We put no rate increase in. So it's pretty much the same. But a risk to us is if the economy doesn't come back, if more people get on the Medicaid rolls and that number goes up, we're gonna be challenged. Right, and finally, let's just hypothetically assume that somehow the state increases its rates in Medicaid and your Medicaid number comes in with additional million or so in revenue. What would you do with that in terms of investing it in an expense line or letting it fall to the bottom line to help your operating margin? Well, we would have to look at where that million dollars coming from, but right now, today, with a break even bottom line, I would say we should responsibly put it on the bottom line. And especially with our capital project upcoming. Okay, well, thank you. That's all I have. And take care of that room I was born in that you showed me when I was down there last time. Before I turn it over to Maureen, who is the new chief nursing officer there? Her name is Pamela Duchain. And Pam came to us from Massachusetts and has been there for, she started in January, right before the COVID hit. And she's terrific. Very, very fortunate. Good to hear. So with that, I'm gonna turn it over to member Yusuf or Maureen. Ah, thanks. First, thank you for the very detailed presentation. You know, typically you guys hit your top and bottom line numbers compared to your budget. So Steve, I'm sure this is driving you crazy that there's a lot of variability going into the forecast. I just have a couple of questions. So in your commentary, you talked about some FT's 11.3 FTEs for new COVID function. And I know you've redeployed some people and things like that. But did you think about when you looked at your commercial rate increase, putting any of those people related to the COVID into a COVID only increase, hoping that they will go away over time in another year or so? You know what, and Tray may kill me for this, but I think this is the new norm. So I think we're going to have to, yeah, Tray just hit his head, but that's the way we built it. And Maureen, Frank, I think we're going to be living with this for a while. And we're actually probably going to be adding to that FTE count based upon some recent things that we're looking to do. So related to COVID. So no, I did not. And maybe they'll go away. Maybe everything will get back to normal. Wouldn't you say really that those are, I mean, again, in my mind, and not really new FTEs in the system were redeploying existing people personally? So in my presentation, we eliminated 40 positions of which 11 of those, 11 of those got redeployed. So it was a net 29. We got rid of them. And can you just go over, because I thought I saw some conflicting information in one of the backup schedules about what you received for COVID that you need to pay back and what you received that you don't need to pay back. There was a chart in there that was filled out for our submission that said there was nothing that you received that you wouldn't have to pay back. And then there was another comment in your commentary. I think you got about nine million. So just trying to get a handle on, what did you receive so far before the new grant? So we received in Medicare advances, $9,470,000. That has to be paid back to Medicare. Yeah. We also received an advance from Blue Cross of approximately $1.9 million that has to be paid back to Blue Cross. We also received in stimulus money from HHS total of $9.7 million that today does not need to be repaid because we meet all the requirements to keep that money according to HHS. We also received $784,000 worth of, I call it Medicaid COVID-19 retainer money. And approximately 10% of that may, the operative word is may, need to be repaid. So I know Lori asked us, she said it was some conflicting data. And when we looked at the table, Jim has handed me the table, it said, budget fiscal year 2021, funding sources, we left that blank and then we showed the repayment and the $78,000, which is 10% of the $784,000 may need to be repaid. And we're making the assumption, it will be repaid, but it may not be repaid. Okay. And I think maybe this chart was, the chart I was looking at, it says budget fiscal year 21, but then I talked about the funding sources in fiscal year 20 and how much was to be paid, wasn't to be paid back. And I think that was related to 20. Everyone else kind of interpreted that as 20. And so that's why I was gonna confuse on that. Yeah, we have to Lori ask us the question. We didn't go back and change it because we said it said budget year 2021. Okay, that's okay. And then you talked about, I think for the grant you were potentially put in for another 12 to 15 million of loss revenue wouldn't most likely the roughly 10 million that you received from HHS be adjusted for that. So yeah, okay. So you might get another couple million, two, three million dollars or so, if all worked out. Right. So the stabilization grant that we submitted with the state does not ask you for an amount. They ask you for data. We gave them all the data. Plus they asked us, what have you gotten from Medicare? What have you gotten from HHS? What have you gotten? And then they have a methodology that they're gonna use. Okay, no, that's okay. I just wanted to make it, it's not gonna be 12 to 15 million. It's gonna be net of whatever. So, and then you typically talk a little bit about your regional area and how you get an inflow outflow of people from Massachusetts, New York, things like that. And obviously with COVID, that's probably been impacted greatly from that. And just, are you seeing big changes there or? So the reason we didn't, and you're right, every year I talk about it a little bit, we've plateaued, okay. So we're not seeing an increase. Over the past couple of years, we saw an increase. And we've pretty much plateaued on our revenue from New York. We've plateaued on our revenue from Massachusetts. So that's why it was not a point of interest. We do believe we're hopeful that we will be able to improve that with some initiatives that we're looking in the next fiscal year probably be able to do, but they won't be implemented and won't get up and running until late in the fiscal year. So we didn't put them in the budget. Okay. And then typically you've always targeted about a 3.5% operating margin and talked about the fact of your age of plant and that you needed to make sure you had enough cash once you started investing, which obviously the emergency room and things like that will be the start of that. And then this year you're not looking for that and is really your ability to do that partly because of where your cash flow, days cash on hand is netting out. It looks to be for the end of the year and where you think it's gonna be about 170 days, which would still be pretty healthy. Right. So the ED project will be funded significantly through fundraising as well as our cash reserves. And we are also will be incurring some debt related to that. So... I was referring more to the fact that you usually always go for 3.5% every year. And part of that justification has been because of the age of plant and things like that. And obviously for 20, you're not looking for that large of an operating margin, which I think you're reflecting a reasonable request, but are you doing that partially because of where your cash flow is projected to be ending out for 21? So the current budget we're asking for, I don't know if I'm answering your question, but is based upon our volume assumptions, which we're hoping that we're going to do better. And what our expense basis and taking some expenses out based upon our performance improvement plan that we were putting in place. So would I like a 3.5% operating margin? Absolutely. It would make things a lot easier, but when we put all the pieces together, it just didn't work out this year. And we can't... I don't wanna put a 3.5% operating margin and not hit it because of our volume because volume is a significant driver in this budget. Okay, and as you saw, if you go and you... Our volumes were trending down, okay? And I like to say some of that volume trending down was due to all the successes we had in one care, but that wasn't the case in one care because we were negative. But you were turning down 4% you said, right? Yeah, so we built off of that foundation, looked at our expenses really closely, reduced where we could, but we had to build up in order to address the pandemic. So ideally, you know, and in our discussions, I would love, you know, 3% is kind of like where I wanna be, but it just didn't work this year. You know, Maureen just said to what Steve says, our boards that has approved this budget, they wanna enamored with it to be honest and they're also pushing management and we're pushing ourselves to do better than this. But given all the assumptions on the volume side, you're known, we said, we gotta get through the rest of this calendar to see how this is playing out. So, but we will work hard to beat this budget. Okay, all right, good, thank you. That's all I have. Thank you, Maureen. Next is Member Holmes, Jessica. Great, okay, thank you so much. And I do wanna extend a huge thank you to all of you. I think obviously it's clear from Dr. Dobbson's presentation the Herculean effort that you all undertook to make sure that the hospital was prepared for this pandemic and protect your frontline workers in the community. So I really genuine in my thanks for that. Thank you. So, you know, this budget, as you just said, Steve is just based on volume. So I'm kind of, really I'm trying to dig in to understand this from each hospital's perspective. So your volumes were down about 4% before the COVID hit. And I haven't really understood why the root cause of that is particularly with the aging of your population. I would think your volumes, frankly, would be up just because as people obviously get older, they, you know, utilize the services more. So is it population decline? Is it, I mean, what, if you have any guesses, I could see some of the specialties that you presented that were down and I'm trying to do some detective work. But what have you all discovered about the volume declines? Guys, Steve, even before Steve answers, as part of is the calendarization of this, Jessica, we normally have, we always miss our budget projections the first quarter of the year. I mean, I've been there 11 and 12 years every year we missed it. And, you know, part of it is the time of year, it's the holidays. So it's not unusual for us to be off our projections, you know, definitely the first quarter and into the second quarter. So I think that's part of the issue is that. But, you know, we've also been kind of scratching our head as to, you know, what else could have been impacted there? And Trey may have some better thoughts right now in just in terms of some of the specialties, but don't lose sight of it for us, is that the timing of the calendar has always impacts us. Yeah, and to add to what Tom says, yes, we usually come out of the box really slow, but last summer, which the period May through August is usually strong for us was volume-wise we were way behind. So if you combine, you know, what Tom said coming out of the box first quarter, then you add that four months where we're really strong. Okay, and is that going to reoccur or not reoccur? Okay, well, when we prepared the budget, it wasn't reoccurring because we're coming out of the pandemic. So I wasn't about, you know, one year is not a trend, but one year can be a trend. We also have seen a population decline. We've also seen a flattening as Maureen asked the question, a flattening of the uptick that we had seen each year in New York volume and in Massachusetts volume. So that has flattened out. Okay, insurance barriers in those two markets are still challenging. Okay, and so, and then as I said, our end-out program, we haven't hit our numbers in four years. So I squeezed those down this year. Yeah, we have a new program starting with GI group from Albany, but you know what, I'm not, you know, I'm not gonna be wrong five years in a row. You're not gonna be wrong, I know that. Yeah, and so I think it's a combination of everything. And as Tom said, our board has challenged us, but they also challenge, the finance committee challenged me on our volume assumptions because that has been our Achilles' heel over the past couple of years. We've met the payer mix assumptions, we've met the out-of-state assumptions, we've met our, we've managed our expenses really well over the years, but our volume has always been the, I'll say the softest of our assumptions. So this year, we took the 12 month, remember in that 12 months, we had a week summer. And, you know, is that coming back? And, you know, this summer, I don't think it's fair to use, but it's been up and down. Yeah, and so there's no adjustment there for the impact of social distancing, disinfectant, patient fear, just a COVID effect on volumes for next year. Well, there's in our scheduling, okay? We have rolled back a little bit in radiology and other departments a little bit because we can't have everybody showing up and just crank, crank, crank. So there's a little bit, not that much. It's more of a, it was more of our 12 month trend. Okay. Jessica, can you guys hear me? Am I coming through? Yeah. I had to switch off into my desktop. So now you see more of my office than me, but let me just answer two things. I'll go backwards. The fear that patients have for coming in, I have to just give a lot of credit to our staff. We've been out in the community. We've been talking with people and we really went out hard and fast and we've shown them the safety. So our volumes walking back through the system, you know, are very strong in that regard comparison. Of course, we're using the telemedicine. We're using all the things that we need to do to keep people safe. That was a big fear of all of ours and including mine. And it seems like we've probably overcome that. We still have some risk and that is community outbreaks and clusters will again cause people. But the second thing, let me just give another perspective on our volume. So over the past 12 to 24 months, our primary care practices have been capped. In other words, we've had people leave, retire and the actual volume in the primary care offices has flattened or decreased and new patients can't get in. And so when we have new people move into the community, they can't get into a local primary. So they go to primary elsewhere. And when they go to those primaries elsewhere, they get referred for their inguinal hernia elsewhere. They get referred for their mammogram elsewhere. So actually, we only had two of our six primary care offices accepting new patients this year, which is actually a wrong direction that we need to be. And I think that actually really dovetails with referrals into our specialties. You know, appropriate referrals. I'm not talking about unnecessary referrals. I'm talking about appropriate referrals. You know, anecdotally in the community, patients are moving in, they can't get a primary. So they go to Pittsfield or Albany for their primary. That's where they get referred into for specialties. Fortunately, we've recruited into this year that are both open and seeing patients and we plan to have some more in the fall. More hires. You're hiring even more in the fall, primary care? Primary care, that's right. Okay, that's terrific news. We all agree that primary care is essential. So the second question, I'm trying to get a handle on how hospitals view medical inflation. And thankfully your presentation and your narrative gave me a lot of information about how you're viewing sort of the healthcare inflationary costs going forward. So let me just make sure that I understand this. So the compensation, the expectation is a 3% increase generally in wages and salaries. There was no increase this year. You're rolling it over into next year. So 3% in that bucket. Supplies, the price effect there is about a 5% assumption, right? And then pharmaceuticals was 8%. Correct. Can you just, so compensation was about 60%, right? Of your overall expenses. What is the percentage of supplies and then also a farm? Just so I can kind of get a, I'm looking for like a weighted average. So pharmacy, pharmacy, pharmacy is about $14 million, Jim. So 8% on 14 million is what about $750,000. So 14 million represents what, 7% of our budget. Okay. And then salaries, like you said, 60%, people cost is about 60% and the supply cost are roughly 10 or $11 million. And that represents what, 6% or 7% of our budget. So if you do a weighted average, you're probably three, probably, I would say it would be circling around, and I'm doing this off of my head, Jessica said, oh, I see you've got, you're looking down, you've got to calculate it. Maybe about overall 5% cost increase. But in there also, keep in mind, we have some cost savings initiatives that we're doing. No, I know. And I'm just, I'm trying to get a sense of, there's no general agreement on medical inflation, it seems. And so I'm just trying to get a sense of, there's large buckets, there's compensation, there's supplies, and then there's pharmacy, right? And then there's some other stuff. So I'm just trying to get a sense of overall, how do those, what is the growth assumptions in each of those buckets and how big are those buckets? That's what you asked. If I could just comment on, we try, we work every angle. If you read the periodicals, I should be telling you that medical inflation should be anywhere between six to eight to nine, maybe 10%. And that's not in our budget, because we're going to find ways of reducing, the use of things, change things. But I know many of my colleagues in Vermont, we have discussions at the VOS, CFO meetings that when you ask for 3.46% increase in your rates, that doesn't cover inflation. And that is a true statement. So we need to be innovative. We need to figure out ways of delivering care more effectively, efficiently. And that's where population health comes in. And it's all together, we got to figure a way to bend that cost curve down and provide the high quality care. And as Tom mentioned, we got recognized as a real good value. And the definition of value is different amongst all of us, but you're looking at all the metrics. So maybe this is a paid to advertise announcement. We try really hard. No, I do. And I actually looked at that Institute report and you guys were like an A plus. I mean, I actually looked it up, right? Wasn't, didn't they give you an A or an A plus? I'm just, I know that's pretty hard. I don't give A pluses. So there you go. So actually I just, if I recall and maybe I'm wrong about this, but is it true, is this my recollection true that last year you had paid a pinnacle $500,000 to basically to find some cost savings in your system? These are my scribble notes from last year. Does this ringing any bells? Yeah, yeah, we, I'm not sure how that's heard out. Cause I know, I think the $500,000 was a combination of strategic plan and cost savings. Okay. And part of some of the initiatives that we were putting in the February plan before the pandemic hit, which were built in, came from the pinnacle project. So. Staffing changes and things like that. Is that staffing changes? Yes. Some of the staffing changes were, as well as we're using an outside tool for the staffing changes, some process redesign, some, they've looked at our COT model for our providers and given us some information on how we could become more, I'll just say efficient. And, so they gave us some good ideas. Some of them we've implemented, some of them were still in the process of implementing, but they're all built into the budget. Any estimate of how much cost savings were generated from that? From them, I'm going to say, let's call it a million dollars. And then there's another million from another project and you know. And Jessica, we haven't yet implemented, we're not looking to do the comp changes until January of next year. So that's not a small piece. Okay. Just, you know, I remember it from the last budget and I was looking forward to hearing the results of it. So that's, you know, I wanted to follow up on that. And my last question is, if you had to carve out the COVID related expenses that are built into the 2021 budget, whether that's, you know, FTEs or screeners or PPE that has to be purchased, have you carved that out at all in any of your grant applications and do you have a dollar value on that? So in the budget, we have, you know, let's call it 12 FTEs. So that's about $750,000 with benefits. And we probably have another $300, $400,000 worth of additional supply costs for PPE. Okay. Incremental increase. That's just, that's not for PPE period, but that's the incremental cost increase. Right. And if we had COVID, you wouldn't have to spend it. Yeah. Got it. Okay, are there any other expenses that you can think of testing expenses or any other things that would be in that bucket? Yeah. You know, the interesting thing was yesterday I was talking to our lab director and, you know, we talking, you know, I was my monthly meeting with her going over a budget. And I'm like, how come, how come you're not over budget because we did not budget for all this COVID testing. Okay. And all the, you know, because we send it out to UVM, we send tests out, we do some tests here, but, and she told me that some of the high-priced testing that we typically do weren't getting done at the same volume as they were pre-pandemic. So she says it's basically washed in her budget. So she wasn't incurring those costs, but now she's incurring this cost. So now she's on budget. And I asked her, I said, what happens when things get back to normal and we're continuing to do COVID testing? She goes, you probably got to fire me because I'm going to be over budget. And I said, no, I'm not going to fire you, but we will have to keep an eye on that. And one of the tests that we haven't done a lot of is tick testing. For some reason, during this pandemic period, we haven't had a lot of demand for the high-cost tick testing. We're still doing some, but not as much as we in the past. That's shocking because the hiking trails are overrun by people. So I don't, you know, we just don't have the same expense load as we had a year ago when she built her budget. But we have the COVID testing costs, all the reagents and all that things. So it's washing out. So it's kind of like being disguised a little bit. Okay. Thank you so much. I appreciate it. Those are my questions. Thank you, Jess. Next is member Lange Robin. Hi, sorry. It took me a moment to get off mute. I only have a couple of questions that other folks haven't asked. That's the benefit of going towards the end, I guess. I was curious when you were talking about your one care results, if you had any sense of what was driving the difference from the benchmark. Basically, volume outside of one care. Okay. Patients going either to Albany, we have looking at the data that we're allowed to look at. We had a lot of patients going to Albany for high-end procedures, things that we don't do. So it's outside of a network and we also had several cases go down to New York City and when you look at where they went, you know they were serious cases, as well as just greater volume. Thank you. And then I was curious how the changes in the Medicare sequestration impact you, if at all. So Medicare sequestration was reversed through the end of this calendar year. So that would be about, that would be probably about $750,000 off of my head. Great. I think that's it. All my other questions were answered either in your presentation or by someone else is asking them. So thank you. Thank you, Robin. Thank you, Robin. At this time, I'm gonna turn over the questioning to the Health Care Authority, Mike Fisher. Health Care Authority. Advocate, but you're also an authoritarian figure, you know. I don't know what I think about that. Thank you. Just a few quick questions. First one, I think it's probably for Dr. Dobson. This morning we heard from a different hospital about reductions in emergency department during COVID for conditions like stroke and heart condition and, you know, let alone chronic conditions. I don't know whether you experienced that, but I didn't ask the question earlier. I'm gonna be curious of your perspective. This is obviously a national, we heard this story nationally as well, but here we are for five months later. One would think we would have seen that play out on a human level, on a medical level. And I just wondered if you had a perspective on that category of deferred care. Sure, so Mike, the problem we're hampered with in trying to analyze this is volume. Volumes in our centers in Vermont are so low that changes could be due to chance or changes could be due to reality. So we have to look towards larger systems. And I believe that's what you were referring to when you look at the data out of New York, New Jersey and then other places in the country with cardiac arrest deaths nearly 1.5 times as many. Which is actually a remarkable amount in the short amount of time. So any anecdotal stuff of observations here are just anecdotal. We are fortunate that our ED volume which dropped down to about 50% has come back up significantly. And I say fortunate for the community, having the people getting the care they need, not unnecessary care. Yeah, okay. Maybe, Steve, I was interested to hear about a reduction in your one care dues. And I guess I gather that you don't know exactly where that will land yet but I'd be curious to hear what you think about the affordability of those dues at this time given all the pressures on your hospital. All the affordability, it's a cost. Yeah, we do get some revenues back but any place where I sometimes look at those dues or what I was gonna say is any place where we can cut costs helps. And I look at those dues sometimes with my lens is saying I'm paying to be in a risk program which I have downside risk and I have upside opportunity but we tend to focus always on a downside risk which I do because I'm a CFO, I'm a pessimist in that I'm paying to be part of a program that all I can do is really lose money on. And that's a bad way to look at it because ultimately population health and if we can really master this and it will take time is a good thing for Bennington, Vermont and the country. So an investment but an investment of $1.5 million from my hospital, I think it's too much. Okay, I also in the same area, I was interested to read in your narrative the your philosophy and your strategy around accounting for risk. I think it's a different philosophy than many other Vermont hospitals not accounting for upside or downside risk. And I'd just be curious to hear your thoughts on it and how you've landed with that perspective. So basically my perspective is pick the midpoint when you do your budget, okay? And that's where I land. And then if the results come in worse, okay, you recognize it, if the results come in better you recognize it. But during the year, when I don't have all the data, I like to be conservative. So when the final result comes in, either I'm there or I do better. But for a budget, and you're right, I do differ from some of my colleagues in Vermont. I think you got to pick the midpoint for a budget because if I picked the low end, I'm going to be asking for a higher rate request, okay? If I picked the high end, I'm going to probably ask, well, I won't ask for a lower rate request, but, you know, and the high end is probably not realistic. So picking the midpoint is, I think it's the safe way. Okay, and I think it's right in the middle. And, you know, that's, you know, we're at a crystal ball and I don't have enough history to be able to say what's right and what's wrong at this point. We're still, we're in our infancy of working through this. From a consumer advocate's perspective, I appreciate picking the midpoint rather than picking the low point, right? Lastly, can you just tell me a little bit of what's going on with Blueprint? Do I see it as a positive and a negative and what drives this 1.4? Yeah, so our PHO, our Physician Hospital Organization is, has run its life cycle and the Blueprint has been administered through the PHO. The contract with Blueprint is being transferred over to the hospital. Okay, so what will happen is now the hospital will get the revenue, but the hospital will also incur the expense for a net zero. That's right. There's a plus revenue and other operating revenue, not net patient service revenue. And then we have salary expense, we have benefits and we have other expenses and it should be, in the budget, it's a net zero but it adds to our cost base. So we're going to be the administrating agent of the Blueprint monies. Very good. Thank you much. Thank you, Mike. At this point, I'm going to open it up for public comment on the SVMC budget. Is there any member of the public who wishes to offer a comment? I have a comment. Go ahead, Dale. I actually have two. One is in relation to schools. I have not heard yet. I'm sorry, Dale. I'm sorry. In relation to what? I missed the word. Schools. Schools, thank you. I've been following that as an issue too. Schools reopening. And I'm concerned I'm not really seeing a connection between hospitals being prepared for what could happen when schools reopen. I know the guidance comes from the health department but I'm a bit puzzled as far as I don't see any articles telling me how hospitals are prepared for what could happen within communities as schools reopen. I was just wondering if their hospital has any thoughts on that. And the second one quickly would be in your emergency department, are you seeing people show up needing the emergency department because they can't get to see their primary care physician? Are you seeing, there may not be an increase in utilization but are you seeing a different kind of utilization taking place? Those are my two questions. Thank you. Fred, you want to take those? Sure. So Dale, on the first one with the school system, we absolutely recognize that there will be increased need when schools start and that's because people are closer together and the virus is spread. We know that's a case. In fact, we talk about that as when it will occur, not if it will occur. We also know most of that demand will be through testing and not hospitalization as well as office visits. And that's why we set up that thing I referred to called the Respiratory Evaluation Center. That's also for kids. We actually have the pediatricians also staffing that unit there. So we do anticipate, in fact, we do our own internal modeling that predicts an increase in the area with schools starting up. And in regards to your second question, remind me again what that was, just the subject and I'll answer it. Your emergency room department, not that it was necessarily an increasing utilization but change in how the utilization was occurring because there's people coming in because they can't get to see their primary care position on time at all. Yeah, so we've gotten pretty lucky in that regard and also done a lot of work. It's a great question, Dale. It's hard to tease out. During the height of the fear and anxiety with the preparation of surge, even though our volume dropped by 50%, our acuity was quite high. But since that time, I'm talking about in our emergency department, since that time, the implementation of the telemedicine and again, this separate respiratory evaluation center, it really has allowed people to get in to see their primary. A lot of telephone conversations to help people through the situation, the use of the telemedicine and then they get steered towards the respiratory evaluation center. You actually bring up a really good point and that is as a part of the emergency declaration, we're actually able to help people not go to the emergency department but instead go to a lesser acute area if that's what is needed. And so we've been able to do that and sort of keep them in the most appropriate place. Thank you. Is there other public comment? Hearing none, I know that we have one announcement to make before we get to that, I just want to thank the team from Bennington, Tom, Trey and Steve, very thorough presentation, much appreciated. We'll let you get back to actually running the hospital. And Susan, if you could make the required announcement. Sure, thank you, Mr. Chair. So last week, the board issued its decisions on the qualified health plans for 2021. The board completed its review of Blue Cross Blue Shield of Vermont and MVP Healthcare's requested rate increases for small group and individual plans, as I said, on Vermont Health Connect for 2021. Based on the submitted filings, there are approximately 39,000 Blue Cross Blue Shield members and 37,000 MVP members enrolled in the plans affected by these filings. Blue Cross Blue Shield initially requested a 6.4% average annual rate increase over 2020 premiums. After hearing recommendations from the board's actuaries and following the submissions of hospitals FY 2020 budgets, Blue Cross Blue Shield increased its requested rate to 6.7%. MVP initially requested a 7.3 average annual rate increase over 2020 premiums. After hearing recommendations from the board's actuaries and following the submission of hospitals FY 2021 budgets, MVP decreased its requested rate to 6.4%. As I said, on Friday of last week, August 14th, the board issued its decisions for these filings. The board reduced Blue Cross Blue Shield's rate increase from 6.7% to 4.2% and MVP's rate increase from 6.4% to 2.7%. The board's decisions for these filings may be viewed on the board's rate review web pages. And I probably should have started off this announcement by saying per statute, we must announce decisions made for rates after that decision is made at our next public hearing or public meeting, which for this particular rate decision was this hearing. So thank you, Mr. Chair. Thank you, Susan. Kim, everything seemed to work smoothly. Are you back with us on Thursday? I'm not. I forget if it's Sunny or Joanne who will be here Thursday. Okay, I'm amazed that you were able to make out some of the testimony when it was got a little bit garbled, but you're doing a great job. So thank you very much. Thank you. A motion to adjourn? So moved. So moved. Second. It's been moved and seconded to adjourn. All those in favor signify by saying aye. Aye. Aye. Any opposed? Thank you, everyone. Have a great rest of your day. In the middle of this hearing, we got a tremendous downpour here and now the sun is back out. Well, thank you all. We appreciate your attention. Thank you. Bye, guys. Bye.