 Good afternoon, everyone, and welcome to the Green Mountain Care Board meeting. My name is Kevin Mullen, chair of the board, and I'll call this meeting to order. The first item on the agenda is the executive director's report, Susan Barrett. Sorry about that, I know I muted. Good afternoon, everybody. I do have a few announcements regarding our schedule, as well as some special public comment periods. First, the board is currently accepting public comment on the Clover Health Partners LLC FY22 budget submission. We'd ask that all public comment should be submitted to us by close of business on Friday, March 11th, in order to be considered before the staff analysis presentation, which will occur on March 16th, and more information on that submission can be found on our board's website. In addition, last week, the board discussed the certificate of need dollar thresholds and the board's authority to adjust them and whether the board will need to adjust them for inflation. That presentation can be found also on our website and on our under our public comment submission page, and we are currently accepting public comments regarding that presentation. In addition, we are accepting public comment regarding a potential next model with our partners at CMMMI, put an extra M in there, and we will be sharing any public comments with our partners at AHS and the governor's office as they are leading the negotiations on that model. And then in terms of a scheduling announcement, our press release has been updated, and next Thursday, March 17th, we've added a board meeting. It will start at 8 a.m. and that is to discuss wetland regional medical center's mid-year budget adjustment. And if you have any questions, please reach out to me or to Kara for any of that scheduling. And that is all I have to announce today. I will turn it back to you, Mr. Chair. Thank you, Susan. The next item on the agenda is the minutes of Wednesday, March 2nd. Is there a motion? So moved. Seconded. It's been moved and seconded to approve the minutes of Wednesday, March 2nd without any additions, deletions or corrections. Is there any further discussion? Hearing none, all those in favor of the motion, please signify by saying aye. Aye. Any opposed, please signify by saying nay. Let the record show that the motion passed unanimously. So that takes us right into the heart of today's meeting. And we're going to be taking a look at the fiscal year 21 actuals for our hospitals here in Vermont. And I'm going to turn it over to Patrick Rooney to lead that discussion. Patrick. Thank you, Mr. Chair. Am I coming through loud and clear? You are. Excellent. All right. I'm going to get us squared away. And let me know when you can see the presentation. We can. Super. All right, we will get started. So good afternoon, board members, members of the public, and stakeholders in this process. As the chair alluded to, we are here to discuss the 2021 financial results of the Vermont Hospital System and the individual hospitals therein. 2021 was its own unique year. Again, another fiscal year in on a pandemic footing. So we're going to touch on some of the results of that as we go through this. But a brief overview here on slide two first. Touch on quickly on what the year-end review is and its relationship to the board's enforcement regulation component. We'll navigate into a system-wide analysis of the hospital system and then into each individual hospital's profiles, in which we'll touch on various components related to each hospital. And then we'll do a quick overview of some of the supporting materials that you can find in the appendix of this presentation. And we'll move it back to the board for discussion from there. So the fiscal year-end review, each hospital as part of their 2021 budget order is required to submit their actual results for 2021, including their audited financial statements. And those organizations where it's applicable who have parent organizations are also required to provide their consolidated financial statements that provide a look over the various organizations that exist underneath that parent. And so for those following at home, we have a quick link here on the page highlighted in blue that will take you to those submissions on the Green Mountain Care Board website. Enforcement, the board historically has used the results of this presentation to discuss potential enforcement on hospitals who have exceeded or fallen short of their budgeted net patient revenue levels. And so for the last couple of cycles, citing the environment that exists within the pandemic and some of the struggles to budget in that space and operate in that space, the board has waived that regulatory authority. And so we wanted to follow up on that and recap that really quickly. Again, we have a quick link to the minutes for those following at home where you can see the board's action taken on enforcement. So there will be no enforcement based on the results presented today. And that did not preclude hospitals asking for mid-year adjustments despite that enforcement being waived. They would still have that capacity to do so. So just recapping on some activity from a year ago that potentially could have related to the results that we're providing today. So we're gonna move into the system-wide analysis and we're gonna come right out and show the Vermont Hospital system from an actual to budget perspective and actual to actual perspective. And also the margin activity on a five-year look-back. And it's very important that we provide a lot of context in this space because 2021 is a difficult year to assess looking back from actual to budget. 2020 was a lot easier because the budgets that were created and approved were done so in a pre-pandemic world, making the actual results of 2020 very stark compared to what these organizations had assumed was going to happen. And so a lot of those hospitals shared a lot of common issues with the way the pandemic rolled out, which made the work from last year easier to look at because we could really broad stroke a lot of the financial results that happened. The difficulty with 21 began during the 2021 budget process. And we have to go back in time because context is important to remember that when these budgets were built, hospitals built them without a significant component of their operational capacity. In that during April, May and June of 2020, they were operating without revenues derived from non-emergent elective procedures as those had been suspended. And that was about 25% of their fiscal year, which can cause issues with the data aggregation that they're using to predict their budgets and also the assumptions that they're deriving from that data. And that doesn't even factor in the overall onset of the pandemic and how that was going to play out throughout the rest of that year. So the way hospitals approached budgets was very disparate. And you can tell here in the upper left-hand corner, we had a variance from budget where the system underperformed by $44.2 million. UVA Medical Center alone, which carries the largest portion of revenues for the system underperformed by $107 million. So what that means is that we had several hospitals who with their own reasons and their own logic conservatively budgeted and then blew through those budgets. But no one's to say they were wrong either then and now as to their approach because simply nobody knew what was going to happen and how 2021 was gonna play out or how even their 2020 results were gonna play out in which they were building those budgets. So it really makes it difficult with the actual to budget look and even the actual, actual look to derive much from that other than the environment continues to move. And it continues to be shaped on an annual base, a fiscal year basis. So the situation on the ground in 20 was different from the situation on the ground in 21. And that continues to change going into 22. A year ago, many of us were looking forward to becoming vaccinated and thinking we'd put this pandemic behind us. Lo and behold, we have the rise and severity of the Delta variant. And then towards the end of the hospital's fiscal year in August and September, the Omicron variant begins to take hold. And that has really put a lot of stress on them coming into 2022. So each year is going to bring its own challenges. Each year is gonna bring its own unique, complex components that are gonna make look back analysis against budget very, very difficult. Some of the constants that we can depend on are operating expenses. Operating expenses due to a variety of factors continue to outperform budget. And that was true in 2021 and looking over at operating expenses for actual to actual in 2020, 2020's operating expenses came in almost on budget for the system as hospitals try to secure as much of the supply and safety components that they needed to keep their workers and their patients safe from the original onset of the pandemic. And also major outlays to physically reshape their facilities, including air handling systems and safety protocols to keep both the public and their workers safe. So the operating expenses, the increase that we're seeing here, actual to actual and over budget are very significant components to the challenges that exist. And we've seen in 2021, those challenges and expense areas have continued to evolve in inflation being a growing inflation being a factor. Workforce of course is a major component as salaries and benefits make up between 60 and 65% of total operating expenses for the organizations, the reliance on travelers and also to some extent rebound in volume. As volumes go up on a hospital by hospital basis, so does the need for those supporting supplies and drugs that help facilitate good patient care. So the net net result of all of this is a system that produced about an $88 million operating margin. And this really requires a lot of context and I apologize if I sound ominous here, but it needs to be made clear for folks listening that these margins were not organically derived. And what I mean by that is the core patient care operations of the hospitals are not responsible for the large majority of the margins that were produced in this year. And for those hospitals that produced a margin, they largely cited federal and state relief playing a very significant role in this, if not a total role in this, lab and testing and vaccine revenues playing a major role in this. And the point of me making those two connections is that those are not revenue sources that in the future are going to be there at the scale or at all moving into 2022 or 2023. So that's what I mean by non organically derived margins is that the operations of the hospitals largely are not responsible for the system-wide margin here. Additionally, several hospitals noted that they brought over into their income statements on 21 and officially recognized relief monies that they received in 2020. If you recall a year ago when we were having this conversation, several hospitals were hesitant to book some of those relief dollars for a couple of factors. One, they couldn't justify the use of those COVID relief funds in their operations. And two, federal guidance had continued to evolve. And so what may have been true a few weeks prior may not have been true later on and then that would change again. So to be safe, they kept those dollars on their balance sheets. And in 2021 became more comfortable and more confident as the pandemic dragged on and guidance became clear to begin to actualize those on their income statements. So it's a very stark difference from 2021 on margin. And as you can see looking back, one could walk away from this and assume that the system has benefited from the pandemic but I'm here to caution that that's not true. And because of those non organically derived margins, the system's capacity to duplicate a margin like that in 2022 is unlikely. I hope I'm wrong about that, but that's where things stand based on what we know today looking back at 2021. To highlight some of those factors, and this is a perspective that we began to apply last year to try to illustrate for the board and folks at home, the ebb and flow of the severity of pandemic and the dollars being pushed into the system to keep it upright. We can see here that over the quarters, one, two, three and four, the other 13 hospitals that are not the UVM Medical Center continued to produce positive operating margins. And towards the end of the year, they began to grow for those other 13 hospitals. And a lot of that has to do with the recognition of some federal stimulus monies coming through and some of the vaccine clinics that we're taking that these hospitals were standing up and lab testing was a major component of driving MPR at some hospitals as well. We can see that the University of Vermont Medical Center's track record over this really slingshots in the first two quarters. And of course in Q1, ongoing effects from the pandemic at the hospital, the closure, continued closure of Fannie Allen, which was suppressing volumes and revenues in patient care. And then the most significant of all, the cyber incident that occurred there in the fall of 2020. And that really set the hospital back, not just that quarter, but operationally for the year. And then in quarter two, the hospital UVM Medical Center was able to attain significant dollars in relief to assist with its pandemic response. And some of that money, they were overlooked in 2024, which came in close to $40 million of it. So that really turned the financial results of the hospital around. And then from then on out, they had a smaller margin in Q3 and they fell back into the red for Q4. And ultimately their contribution to the overall system was about 36 and a half million dollars. So we've also highlighted here where the system would be without that stimulus money and it's a pretty concerning look that the potential out there would be that the system could produce in excess of a $40 million loss should that stimulus money not have come through predominantly at the University of Montenegro Center. So I say all of that because all of this, of course, is going to play a factor in our 2023 guidance as we move forward. And even though we create these artificial fiscal years, the longer the pandemic plays out, the more these factors are going to roll into the future impact that the system has to absorb. And so really keeping the context around the fact that society to some extent feels like it wants to move on from the pandemic. However, the pandemic is not over and the components of the pandemic that have allowed the system to operate at the capacity that it has, i.e. relief funding does not seem to be in sight moving forward. And so that's going to play a significant part in the discussions we'll have in budgets going into the 2023 process. At the bottom of slide seven here, a recap just different contexts within without UVMC in all hospitals and you can see the contribution from UVM versus the other 13 hospitals over the last several years. 2021 certainly stands out with those other 13 hospitals, as I stated outperforming collectively the margin of the University Medical Center, which has not been true looking back over the several fiscal cycles. Payor Mix is something that we always pay attention to here and what is predominantly still a fee for service environment. And what's important as we stated last year is that from the 10,000 foot perspective, the system level, we don't notice a whole lot of shift in Payor Mix. That shift begins to occur more notably on a hospital by hospital basis as reported to us by the 14 organizations in the state. So providing some pure numbers here, you can see what I was talking about as it relates to budget to actual performance on a hospital by hospital basis, quite a range going on there, which ultimately creates a negative 1.6% variance for the system, but we go as high as outproducing budgets at 13% to underperforming budgets at 7.6%. And the actual to actual variances become even larger on the whole. And again, that has to do largely with that suppression of revenues as a result of the suspension of certain procedures for nearly 25% of the fiscal year in 2020. But certainly an illuminating perspective of our pandemic existence from a financial perspective and one that will likely continue as hospitals struggle to create accurate budgets and then deal with the operational challenges that seem to arrive on a regular basis on a year to year basis as well. This is just another perspective that we want to provide the board. And for those who are on the board at that time, we use this as a way to approach an illustrative component to reasonability at budget time. And so the one change that we have here is that that green line, which we've labeled system actual at budget time was an individual hospital's projection. And what we are trying to do was coming off of 19, the last quote unquote normal year of operations for the hospitals pre-pandemic was trend forward to 3.5% NBRFPP growth rate. And we did that because the board has approved 3.5% growth rate in each one of those years, 2020, 2021 and 2022. So hypothetically speaking, where would everything end up if it had been somewhat normal? And then the I bars represent a plus one or minus one variance from that 3.5%. And so we can see that the hospital system in 2020, 2021, excuse me, budgeted just over 3.5% growth on the whole, a little probably around four or so percent and underperformed that by almost 1.6%. So they actually did not meet that 3.5% trend. And then again, hospital budgets for 2022 are looking to take the system about $100 million over where that trend would be. And we will see what the results of that are going to be in about a year's time. So the situation continues to change. We do not know yet how the hospitals will come out of the first and second fiscal quarters and what it may mean as Omicron subsides and the hospitals begin to drive through more volume throughout the summer months when folks begin to have a little more confidence about getting back into that healthcare space. So another perspective, I believe it's slide 67, we've done these for each and every hospital in the system and you can really see how disparate the budgets and results are from an illustrative perspective as it relates to hospital performance, just like the system wide perspective we have on the screen here. Another perspective about how the system has fared against what the board has approved for NPR growth. And we can see that overall, the system was underperforming the board's approved growth ceiling in 17, 18 and 19. And then we have FY20 in which the system did not grow. In fact, it stepped back 6.3% from 2019. And then again, we have that slingshot effect in 2021 where the system grew 13.1% over its 2020 comparable. So you can see how quote unquote normal and stable that NPR growth was from the year 17 and 19 and then where the pandemic has left the system. Again, just to highlight how difficult it is to budget, to operate and to regulate in this space. This is kind of a boilerplate that we had to put in here. It's not just CARES Act funding anymore. It's any relief funding or ARPA funding, what have you that has been approved and distributed by state and federal authorities. The guidance continues to be in question. I don't think it is as unstable as it was a year ago. I think things have probably become a little more formative by now, but still the result of that is that there's still some uncertainties and things could change technically speaking, but most hospitals and their auditors within their narratives for 2021 felt very comfortable in booking those revenues. I think we only had one hospital who continues to experience some concerns in that space overall, but we do need to point this out as it could have an impact on some future numbers. So we'll take our numbers today and consider them good for now. And if they change, then we will update those changes and future iterations of this presentation. An important component in this pandemic space is the reliance on other operating revenue. And it is important for folks at home to understand that this is where hospitals are booking relief funding. And so there is a significant growth in that space. As you can see, 15.8% 2020 and 13.8% in 2021. And that is other operating revenue as a percentage of total revenue. So it is a much larger part in the last two years than it was leading up to that. Moving to slide 14, we've broken it out for the folks looking at the presentation. And you can see on the left-hand side in the teal bars that there was some natural growth that was driving those other operating revenues. A lot of it had to do with hospitals increasing their contracting on 340B to provide low-cost drugs and also specialty pharmacy growth, which is almost entirely contributed to University of Montt Medical Center was driving those. And so you can see there's still some continued growth in that space on the year-to-year basis that is significant as hospitals use those revenue streams to meet the operational expense demands of their day-to-day existence. On top of that, we bifurcated and broken out the reported COVID-19 stimulus dollars that have been recognized on income statements. There is a difference between recognition on income statements and what they've received. So this is what they have recognized for 2020 and 2021. And we're looking about 330 million dollars of stimulus and other relief funding that has come in and been recognized by the system to help offset some of those pandemic challenges that have existed. And so these other operating revenues have become an important part keeping some of those margins on the positive side, operationally speaking. Looking at operating expenses, again, the budget equation component of this certainly plays a part, but more so is the circumstances of each individual hospital. And I'll highlight Rutland regional here. Rutland came in in 2021 with a pretty conservative budget, both on revenues and of course expense side, and then far exceeded their expectations for that year with volume rebound, et cetera. So their variance is going to be significantly higher. And of course that all has to do with the budgeting approach taken by the hospital. And so the variance is there again, shift wildly, but you can tell that the majority of those exceeded their budget expectations. Some of that does have to do with, like I said, a rebound in volume, inflationary and workforce pressures that are certainly playing a part in the system today. And the actual experience, that's more telling than anything because as I said, the actual experience of hospitals operating expenses were as a system almost on budget. And so the system itself growing at 7.5% is an indicator that hospitals are incurring some pretty high operating expenses. And we're not for that federal relief money, we'd probably be looking at some significant margin deficits in that space. Looking at margin just over the last couple of cycles and versus budget, you can see that 2020 and 2021, there's significant large margins being produced by these hospitals. And again, some of that does have to do with hospitals who were hesitant to recognize some of those relief funds which may have put them into a profitable space in the prior year, but this time around, they decided to recognize those. And you can tell that as hospitals budgeted their margin, the system was about $52 million and they far exceeded the expectations of their budgeted margins on the whole. And so we only had two organizations operating at a margin deficit for the year 2021. And the next slide, providing a five-year look back, we can watch margins enter positive territory over the last couple of fiscal cycles. And a lot of that has to do with the activity that's being experienced on, with federal and state relief funding and the recognition they're in, again, not organically derived in 2021. And so with no additional federal relief on the horizon and the pandemic potentially setting hospitals back, rising costs, et cetera, and the ripple effects they're in, it's gonna be very difficult for the system to reproduce these type of margins in 2022. And again, I hope I'm wrong about that, with everything that's swirling in the environment right now, that appears unlikely to be a reproduction of 2021's operating margin results. Operating margin percentage, this is another perspective that we supply to put it in the context of the individual hospital. Sometimes the dollar perspective doesn't mean much to folks. So for example, Matt Scottney produces $6 million margin, but that is a excess of 9% surplus on margin here for them. And you can see where central Vermont and Radlemore came in in negative territory, for the most part, pretty healthy margins, the median of 4.5% at the bottom there compared to prior year medians, some of which were in negative territory is certainly a telling context to provide here. And then the total for the system being about 2.8%. And you can see that those positive margins, had its pretty good impact on their five year average in turning some of the look back around here at several of these organizations. So the pandemic is doing some strange things in the space of margins for these hospitals. But again, the context around how those margins came to be is the most important story to be told here. Moving into total margin space. As you can see, all hospitals produce positive margins. Almost universally hospitals cited return from investment portfolios as the reason for this type of activity. Excuse me, the stock market in the past year did very, very well. Springfield is the result of some reconciliation due to the emergence from bankruptcy. Springfield does not have much of an investment portfolio. And so that activity that you see there is accounting related as they came out of their bankruptcy situation in the early part of calendar year 21. And UVM is both investments and termination of pension obligation, which has benefited them in that total margin space. So it's quite astounding that the system has a total margin of nearly $300 million for fiscal year 21, much of which has to do with the performance of the stock market. We don't pay too much attention here on staff to total margin because as the market goes, so go these results. And as we know in the last couple of months here, the market's performance has been sporadic at best. So there's a potential that when we get to this space next year, the picture looks very, very different from a total margin perspective at some of these hospitals. Again, providing a similar look to the operating margin look back on five years. Again, 2021, the only year with no negative total margin activity, the best performance year at a dollars basis of anything here, but as far as positive total margins, the best year since 2017. And so again, just highlighting the market's performance and contribution to these total margins of hospitals and both realized and unrealized gains for the five year look back that we've provided here. Total margin percentage again, providing some context on a hospital by hospital basis as it relates to their operations. So we can see here that Springfield may have produced an $18 million total margin, but that's a 25% total margin for them, UVM was $119 million and that's a 7.1%. So it all has to do with the scale of operations at each one of these hospitals, but you can see the median of 10.3% throwing out Springfield and throwing out Southwestern Vermont Medical Center, the highest and the lowest. The median for the system was 10.3%, which far outstrips its prior year. Comparables is a significant show of total margin activity at the 14 organizations here at the State of Vermont. So again, providing a little more context, illustrative context if we can to the very drastically different situation that was experienced in 2021 over a prior year comparable. So again, looking at 2020 actual to actual over its 2020 counterpart, you can see the significant NPR growth over its prior year comparable. And then we wanted to put 2020 in here over 2019 to show you almost a mirror image of the opposite circumstances that we were looking at at this time last year. Even though the board has set a 3.5% growth rate, it's very obvious how the system has reacted depending on the situation that has evolved in the pandemic space. And so even the system collectively, they are on the far right in green is almost a mirror image of the opposite of what was occurring in the prior year space. And so it's a very difficult environment for these hospitals to be operating in for this board to be regulating in when that is the actual to actual experience that's being realized by each one of these organizations. Last year, we began to look high level at some balance sheet numbers. And that was important because of the infusion of relief money that was coming into the system that came in in substantial amounts. It came in very quickly. And we wanted to make sure that when we were looking at these balance sheets we understood what that meant for these organizations. And so when you look at 2020 over 2019, there's about a $400 million growth in current assets which are assets that you own or are owed to you within a year. And the majority of that in that current space had to do with the infusion of cash. Cash balances that hospitals moved from about 200 or so million up to 560, which was what drove that significant increase there. At the same time, accounts receivable were a little suppressed because of the cessation of those procedures and the loss of revenue. And therefore loss of collection activity that hospitals would normally experience. So those cash balances are what drove current assets up. To be perfectly candid, I was expecting somewhat of a halfway clawback on these balances this year. But as you can see, that didn't happen. Current assets are still over $1 billion. And we'll talk a little bit more about common themes as we migrate into the individual hospital space. But cash balances remain over $500 million. And they have come down about 50 or $60 million from their prior year counterpart, but they still remain elevated. More business activity in the form of patient volume and revenues generated in that space have driven up net accounts receivable. There's also been a reduction on several hospitals and uncollectable accounts, which increases that net component of accounts receivable. So current assets are still hanging out over the $1 billion mark, which as we migrate to the next tab for total assets is still what's keeping total asset values elevated at about 3.5 billion. In addition to some activity on long-term assets as well, but predominantly it's be driven by that current asset space. So balance sheets are still very flush with cash as things stood as of 930-2021. Liabilities, as everybody knows on those balance sheets in this part of that cash influx, they were advances from various payers, public and private, and hospitals had begun the reclamation process for those during their 2021 fiscal year. So those offsetting liabilities are beginning to be paid back or reclaimed through the revenue cycle. And so liabilities are slowly coming down. A big change here that was experienced that's producing a good portion of this is Springfield's activity there. You can see their current liabilities came down from about 35 million to 12, and that is bankruptcy related adjustments that occurred on their balance sheet. And then there's a series of activity in there. And some of this can be timing, but some of it, most of it too, is the lowering of those liabilities that are related to COVID advances that were provided to the hospitals. Total liabilities are coming down as well. Major factor in this is that capital projects were largely still frozen for the most part. There were some that were put back on. And so hospitals have not been incurring further debt, which would drive up long-term liabilities in the form of long-term debt. So they're paying those down. That is helping drive down the total balances of liabilities here. And you can see that's come down significantly from prior year, but it's still elevated over its 2019 comparable, but they are beginning to tick down. And only the environment and how that changes will determine whether or not hospitals proceed with capital projects moving forward, and also the kind of runaway costs that are being experienced in that space will also determine their appetite for moving forward with some of those projects. So now we're gonna begin to move into hospital profiles. And we provided this perspective here because these are some touch points that folks at home want to see and board members want to see as well. So we've provided each designation for each hospital, and we've provided their 2021 actual results and the portion that they contribute to the entire system. And so of course you can see here that the University of Vermont Medical Center carries the predominance of revenue for the 14 organizations followed by Rutland and then Grace Cottage contributing the least at 0.8%. And also continue to highlight how fixed perspective payment as it relates to healthcare reform fits in and how it relates to each individual hospital and the system as a whole. So it's roughly 14% for the system and then very, very different based on hospital experience and participation. And with Grace Cottage not participating, of course that is going to be 0% and $0. And then we've provided their individual budget to actual variants based on those actual numbers. So kind of a blast of information there but all important points to consider as we move through each one of these organizations here. So common financial highlights, this is going to carry through to most of these hospitals. So I'm not gonna go into a lot of depth about each hospital because we tried to extract some of the common components that these hospitals experienced. Days cash on hand is still as excess cash in the system as a result of these 2019s and hospitals are being good stewards of those cash dollars which is keeping them elevated. Net accounts receivable after uncollectable accounts is factored in from gross are about $57 million higher and a lot of that has to do with the change in that uncollectable accounts balance but also return of volumes on a hospital by hospital basis. And as you heard me discuss capital projects have been selective. Some were restarted after being frozen in 2020, some still remain on hold or delayed due to the continuing shift in the pandemic landscape as it relates to each individual hospital. NPR FPP, there was some utilization and volume rebound. Many hospitals cited outpatient services over 2020 as the reason for a net patient volume, or sorry, volume rebound and the onset of mass vaccinations in a society more comfortable moving about in the healthcare space has also contributed to a rebound of those volumes. Bad debt experience was mixed on an individual hospital basis. Hospitals where maybe volumes weren't the reason for NPR rebounds had a positive bad debt experience because they did not incur bad debts at the level that they had originally budgeted due to lower than anticipated volumes. And those hospitals who had higher volumes had a negative variance because they outstripped their bad debt budget and free care budget. There was also a FASB revenue recognition adoption by several hospitals. And those changes had an impact on the way hospitals account for that. So they could have been a positive or negative variance based on there. But if I recall correctly, the hospitals that recognize that bad debt experience and revenue recognition had a positive adjustment to bad debt, meaning they had over budgeted based on their prior assessment of their bad debt and free care. Payor revenue was also dependent on a hospital's experience as we discussed at the outset, really depends on the organization and how things played out for that hospital over the last year. And then as we've talked about to COVID-19, testing and lab revenues really helped bolster some of these NPR FPP figures. Another thing I might note in here too that several hospitals pointed out around this space is that the relaxation of corridors related to ACO and savings that resulted from ACO activity are also a driver of some of these NPR and FPP figures. So apologies for leaving that off. Other operating revenues as we discussed additional rounds of federal and state funding and the recognition of 2020 funds therein into 2021 and expansion of 340B retail pharmacy programs at several hospitals. We did have a hospital continue to stress in their narrative to us that they have significant concerns about how big pharmaceutical companies pressure being applied to these 340B contracts could shape the future of their 340B retail pharmacy programs and the revenues they derive from that. So being transparent with respect to that individual hospital, that's a narrative that they've been expressing for a couple of years now in that space. Operating expenses, salaries and expense actually varied due to each hospital's experience. Some hospitals had salaries and expenses that surpassed their budget for reasons cited and we'll go into this further. Recognition salary increases, retention salary increases, shift differential increases, et cetera. But also some hospitals underperformed their salary expectations because they didn't have volume or they had staffing shortages as it relates to the overall workforce challenges. And so that also trickles into fringe benefits too. That also varied. Some hospitals too had higher health claims, some citing families on staff who may have delayed healthcare and were coming in and filing those claims or other significant illnesses that occurred during that space. But the salary fluctuations also not played a part in pension obligations and whatnot based on the hospital's experience. Traveler usage was a major component and workforce, workforce, workforce should be a major consideration as we discuss each hospital's experience. There wasn't a single hospital who was able to escape high traveler cost. I think Mount of Scotney was probably the most stable staffing situation that I read through in these narratives that were provided but an increased reliance in number of travelers required to continue to provide a safe level of care and meet the demands, the resurgence and demand at some of these hospitals and also higher cost on that increased number. So really a double blast there of cost to growth related to workforce challenges. Inflationary and supply chain pressures continued to move costs higher. That was those are pressures that began to be felt in 2021 and have significantly carried through and been exacerbated moving into 2022. One thing I noted in several of the narratives was a connection to first quarter experience tying it back to 2021 and really prepping the space for costs potentially moving even higher as 2021 carries on based on that first quarter experience. Depreciation overall much lower as capital projects were continued for the most part to be on hold which means that organizations did not take on the expense related to those projects as they depreciate the cost over time and then medical and pharmaceutical supply costs mostly increased due to neat increased volume as we discussed leads to increased dependence on those supplies and also the price of those supplies continues to go up. And again, that can be tied back to to the inflationary supply chain issues that were being experienced as the fiscal year closed and have been exacerbated in 2022 as the experience has been thus far. Again, common financial highlights as we discussed with the system, investment returns were higher due to market value returns, operating margins were mostly positive and a large part due to federal and state relief. Total margins again, tying it back to the investment returns significant in many experiences helped keep the system very well positioned in that total operating margin space. But again, they are susceptible to market forces as we all are and that can ebb and flow depending on what is occurring. So for folks at home, as I stated, I'm not going to go into a ton of detail on each individual hospital because I want to keep your attention but if you're interested in reading about either your area hospital or reading about each hospital throughout the system we've provided an ease of use link there at the bottom of slide 30 for you to do so. Moving into individual profiles, this is a look that should be familiar. This is the exact same look we provided when we kicked this discussion off around the system. And again, the budgeting activity in 2021 plays a significant part in some of these variances as does the activity that was experienced in 2020. So you'll see the variance discussion here, Brattleboro Memorial underperformed their budget by about 4.5% and operating expenses actually came in almost a percent under budget. A lot of that had to do with lagging volume. And then of course they outproduced their 2020 comparable in a significant manner as operations were more regular than they were through 2020. And for folks who were paying attention at the budget hearing when Brattleboro came in they very candidly acknowledged that the start of 2021 was very rough for them. And it wasn't until about March when things began to turn around from a volume perspective. And so they were in a significant operating margin deficit leading up to about March of 2021. And then over the course of the warmer months, spring and summer, by the time they came in to provide the remount care board with their budget presentation were much more optimistic about how the year had unfolded since about March and April and leading up to that presentation. So they were optimistic that they would be able to claw back a lot of that loss on margin. And the peers that they did do that although they weren't able to bring the hospital into profitability, but they did give it a pretty solid run to pull back from what was looking like a significant operating loss at the start of that fiscal year. So Brattleboro here is exhibiting some fluctuations in the commercial pay or mix space, a dip in 2020, no surprise given the issues around revenues as it related to cessation of those non-emergent elected procedures. And really on utilization, not a big rebound for the hospital here overall when we look back at the total year. However, the physician office visit return is a positive here given the activity that was exhibited in 2020. And we provided a two year compound annual growth to try to capture an illustration of how impactful rebounds in this space were. And so you can see that OR procedures had a significant rebound which brought things a little bit back closer to level for those couple of years. But when we look at physician office visits yes, they were back, but the loss in that space for visits in 2020 was very significant as Brattleboro did outline to the board. The good news to take away from this is that days cash on hand remain respectable as does the age of their physical plan. And so even though they suffered a loss and some of those volumes hadn't returned there's still hope that moving into the better part of this year and beyond that Brattleboro can begin to recapture some of that backlog of demand that likely exists in their community. Central Vermont Medical Center. Again, another hospital that missed its MPR budget by about 3.5% operating expenses essentially came in on point, the largest component to Central Vermont was COVID impact that led to those suppressed revenues and also those expenses coming in at budget where Central Vermont saved some money was in some of the delays to capital projects such as the epic phase two rollout. But this hospital did have significant contract labor pressures that helped drive that margin into negative territory. Much of the demand for that contract labor was at the Woodridge facility that's built into the Central Vermont budget. And so the hospital continues to underperform. They did have a positive trajectory coming out of 2018 in which the hospital was moving towards a positive outcome, but ultimately 2021 proved to be a bit of a setback in that space. But it's not as significant of an operating loss as has been experienced in 19 and 20. And so there is that space with a hospital within the health network to try to recapture some of that momentum that they had coming out of 2018. And again, again, another hospital here that outstripped their MPR performance over 2020, no surprise, they're a major variant, 17%, but also operating expenses continue to rise at a clip of 6.8% year over year. Pair mix here for this particular hospital. Medicare did, as reported, did show an increase. Commercial remained relatively stable with some erosion and Medicaid fell back slightly in 2021 over 2020. OR procedures, significant rebound there over their 2020 counterpart. ER visits still coming in and lagging behind. And that's a theme that several hospitals have experienced that ER visits have not come back to pre-pandemic levels, but the physician's office visits to a slight rebound there in 2021 over 2020. So it's impositive that the community is getting out and getting in front of their physicians for important healthcare discussions that need to occur for all of us. Day's cash on hand is not quite as high as we would like to see for this hospital. Age of plant is still respectable, but the central Vermont does have the wind at its back in that phase two of Epic has now been launched and there should be some efficiencies gained from that. So hopefully that improves the financial position of the hospital and they have the support of the network as a whole to get the hospital back on track. So hoping that the organization can take advantage of some of those changes going into 2022 and beyond. Copley Hospital, Copley was an organization that exceeded its budget from 2021, 11.3%. Operating expenses, however, really exceeded budget at a clip of 15.2%. And again, no surprise, it's actual 2020 comparable. Copley really cited reimbursement and contractual allowances being a favorability to them. They did not experience much of a volume rebound. It was mainly in that reimbursement space and largely a shift from inpatient to outpatient as it relates to some of the volumes that they had. So Copley did have quite a rebound as you can see in NPR performance and also with margin as well. This organization, as you can see, has a history of operating losses and they did cite that federal and state relief was predominantly the reason that they have the $4.7 million margin that they experienced in 2021. And they were more comfortable this year in booking some of those revenues than they were at the same time in 2020. This is an organization that continues to have a very strong commercial payer mix. So that combined with some of the positive nature of those contractual allowances around reimbursement are what drove those revenues. You can see here that they did have some rebound and utilization, but overall they noted that their volume had not quite come back. Physician office visits, OR procedures is not a surprise for Copley who has an excellent orthopedics program. ER visits again, another hospital, they have just not come back to pre-pandemic levels and so they continue to lag significantly. This is a hospital that as you can tell at the bottom of slide 36, the day's cash with hand has been significantly cushioned by relief dollars and that the hospital was operating at very low days cash on hand until those relief dollars began to come in. So although those days cash have been reduced from 2020, it is still about double what it was pre-pandemic and apologies for the oversight here, but I think we do need to look into the age of plant dropping so significantly from 20 to 21. Copley has expressed on multiple occasions that the physical plant of the hospital is aging and they haven't had the operating margins to make necessary improvements in that space. And so I'm doubtful that the data there is accurate. So we're gonna have to look into that and maybe have a conversation with Copley, but we'll check our own numbers first before we go having any conversations. Gifford Medical Center. Gifford again, as is mostly the case throughout the system outperforming their budget on both NPR and operating expenses in a significant way and their actual to actual comparable with 2020. The story here continues to be a hospital that has recovered from a low ebb in 2018. They had a lot of positive activity year to year 18 to 19 in improving that loss on margin and then producing a positive margin in 2020 and then really ramping up that margin activity in 2021. They again cite federal and state relief being a major contributor to that margin, but this is the hospital that has a very different financial situation today than they did in 2018. So there are some positives coming out of that line. We know that heading into 2020, that organization had worked very hard to cut costs, maximize efficiencies and really right size the organization's approach to healthcare. So we have no doubt that that is continuing and is some in some way playing a part and the rebound of the financial situation there at the hospital, despite all the complications that the pandemic has created for organizations such as that. Gifford did cite however, that there has been an erosion in their pair mix and we can see that here. It's probably the most stark example of pair mix erosion with a significant and rapid shift year to year from commercial coming down and Medicare pair mix rising. There's really been an offset there between those two payers. They did experience some significant rebound in operating room procedures as we can see. However, physicians office visits, interestingly enough, could turn downward in 21 as opposed to its prior pandemic year counterpart. So overall physician office visits so the last couple of years are off from their pre-pandemic comparable. And this is a hospital that from a physical plan perspective is one of the oldest in the state. Yet this hospital has maintained some significant cash balances leading up to the pandemic. And of course that has been cushioned by the relief dollars and the profitability that the organization has experienced over the last couple of years. So I would anticipate that at some point in the near future, Gifford is going to use some of those dollars once they have a better understanding of the environment in the pandemic or hopefully coming out of it. But they're gonna look to make some investments in that organization which will deplete cash and also the age of their plant as well. But we've had no conversations with them on that mark. But that is generally what happens with organizations that have stockpiled large amounts of cash that eventually they're going to make an investment. I apologize for the dog barking if you can hear that. We must have a delivery. Grace Cottage, another hospital outperforming their budget but operating expenses really outstripping budget at 7% and of course outperforming their 2020 comparable. The operating margin here tells quite a story. This is an organization. Can you still hear me? Yep. Cannot hear you now though. I think we've temporarily lost Patrick. Can everyone hear me? Yes. I'll text Patrick, Kevin and... I think he needs to go off and come back on. Okay. And I believe the team is here too. Lori is here. So let me get on the phone and get back up. Perfect. So while we're waiting, we'll ask the newest board member if he has any entertainment for everyone. No. This is the hazing part Tom where they make you do karaoke for everybody. That would be a rough day for you all. I think we have Patrick coming back. No, he's leaving. Lori, did you have anything to keep us going while we're waiting for Patrick? He said he lost power for 30 seconds and he's coming back on. Sorry, go ahead Lori. I have no entertainment. Unless you want to hear my dog barking, but I don't think so. And my dog is at the groomers today. Yeah, he should be shortly back on me. He said he's coming back on and Lori will have you as backup for sure. Yeah, I asked him if he wanted me to present. He said, not unless I lose internet. Looks like he did. We'll see what happens. I'll tell you what, why don't we take a five minute bio break and we'll come back. Kara, if you could put a sign up that we'll be coming back at 2-11. Thank you. Well, hallelujah. It looks like we have Patrick back. I'm back. I don't know for how long, but I'm back. I'll call the beating back to order and proceed Patrick. Thank you. I hope that omnibus bill that they passed today has dollars allocated for real internet. That's the last I'll say. So Grace Cottage and sticking with a lot of the themes that we've seen thus far surpassed their net patient revenue and operating expense budget for 21 and no surprise the same scenario over their actual 2020 experience. The difference here is that this is an organization that historically has posted operational losses but oftentimes has very strong community support to make up for some of those operating deficits and that situation has not changed. But that combined with some of the federal relief money that they've received to offset some of the pandemic costs has really provided some profitability for this organization. And this is an organization that also has experienced some erosion in their commercial, or sorry their Medicare Pyramids, but has seen a strengthening on the commercial side with Medicaid remaining relatively flat. But again, this is an organization that is showing here that a couple of utilization statistics have not quite rebounded from 2020. So there could be some pent up demand in that community that eventually manifests itself in a revenue surge and also potentially an operating expense surge at the hospital. Or there's also potential that some of those patients perhaps might be going in other locations if there are problems in accessing some care in their community. But we don't have any insight into that. The good news is that physician office visits, those primary care visits at Grace Cottage are maintaining relative balance over the last couple of years. So that is a positive out of this is that primary care appears to be relatively strong in that community. It's some of those acute statistics that aren't quite catching up to pre-pandemic levels. Again, an organization here that is the beneficiary of federal relief funding with the days cash on hand, we can see a significant jump there from 19 to 20. Also an organization that has expressed the need to make some renovations around its age of plant. And so there might be some future plans there as well to make some effort towards that end. But they also cited in their narrative that they continue to make some capital improvements throughout the year to make their facility safer as it relates to pandemic circumstances. And that is ongoing at that facility as they outlaid in their narrative. Mattis Gutany really outstripped their budgeted expectations. This is an organization who produced a significant margin percentage at 9.1% as we discussed, not a lot of which has to do with some beneficial activity around the ACO and around federal relief dollars. You can see that the actual to actual performance is one of the larger variances amongst the hospitals within the system at 25%, far outstripping the growth of operating sentences. But again, context is important. Operating expenses never really subsided for many of these hospitals in 2020. So that variance is going to be smaller than revenue rebound that was experienced. This is a hospital that did express concern about recognizing about 50%, I believe the figure was of their relief funds due to a few factors. One was they had a relatively quick recovery on a service line activity. Two is FPP and ACO transactions that have their auditors concerned about recognizing some of that activity. And the federal COVID relief guidance is also still a concern for them. So they are still holding about 50% of their relief dollars on their books and they have not recognized them in this space. But they did acknowledge that some of the changes that were made around the ACO were major drivers of financial activity here at the hospital. Also though, again, erosion of payor mechs over the last couple of cycles being offset in the Medicare and Medicaid space. But you can see when they spoke about quick service line rebound, that holds very true. This hospital continues to see significant increases over pre-pandemic figures and there's not the depth of utilization statistical change that some of the other hospitals were dealing with. And so that is a positive in this respect. And also amount of Scotty did cite in their narrative that they took in patients from far outside of their service area. And so they had quite a rebound in that regard in providing care to patients. And they cited their relatively stable staffing situation in their ability to care for extra patients outside of their service area. So again, the days cash on hand significantly bolstered by federal relief and profitability and days of age of plant continues to remain relatively low compared to much of the system. North country experienced significant variances in both actual to budget and actual to actual. North country did have increased volume largely in their surgical sectors. Laboratory was also up laboratory revenues. ER however was below budget and bad debt and free care was over budget as well with the return of some of those volumes. So North country has coming out of 17 and 18 really recaptured some positive momentum in that operating margin space that predates the pandemic but has improved throughout the last couple of years. And so working in that space, they've had some flex fluctuation in commercial payer mix and Medicare payer mix. But overall things remain relative to the 2019 comparable utilization but still some hold back there but not as severe and then additionally some rebound there in the acute patient space as well. Again, another hospital was some significant days cash on hand. However, they did have to make some repairs. The facility is nearly 50 years old and age of plant is getting up there. So there's likely to be some investment in that space with the days cash on hand and the rising age of plant as we move forward into the next couple of years. Northeastern probably one of the closest variants to budget that was experienced in the hospital system at 1% but operating expenses certainly outstripping budget for a variety of reasons. A lot of the common themes that we expressed are the reasons for that and the logic behind it. Again, outstripping their 2020 actual operating margin. This is probably one of the most consistent hospitals from an operating margin perspective as you can see in 2021 being no different but being slightly elevated at the same time. So a very steady, sturdy organization from a financial perspective and that includes navigating the complexities of the pandemic environment. Relatively speaking, payer mix commercial-wise has improved for the hospital. Medicare has seen a bit of a reduction, losing ground primarily to Medicaid concentrations. Utilization changes. You can see here that physician office visits continue to be right up there. One of the items that the organization cited was that they did lose a surgeon from their staff and they have not been able to fill that position as of the time the narrative was written. Their recruiting has been unsuccessful. However, days cash in that regard towards some of the challenges they may face continue to be in respectable territory and as does Asia plant for this hospital. Northwestern Medical Center exceeded their budget in 2021. A large reason for that was they had a lot of lab testing revenues that drove this. They did exceed 2020 in a significant way, just over 20%. Operating margin, I believe, I'm paraphrasing but I believe they allocated about 70% of that. Margin is due to federal and state-relief funding with a mix of other items that contribute to the rest of it. But a hospital that is undergoing some significant financial changes as we see here. However, they were very cautious in describing their operating margin experience, which reflects the tone that we took at the outset here about whether or not having a positive margin in the future was some of the one-off activity that's contributed to that going away as things stand today. So they recognize that they still have a lot of work to do at the hospital as they navigate their way through the pandemic and the challenges that exist. They did have an uptick and their commercial pair mix this year was a erosion on the Medicare space. But again, they really cited the COVID impact and the challenges as being the predominance force that they reckoned with this year. And they had to divert resources to handle that appropriately. So a lot of mixed activity in the utilization space, they are one of the hospitals that did see an uptick in ER visits where most hospitals did not. And still they have some lagging physician visit activity there as well. But another hospital again who has always maintained some very respectable days cash on hand and the addition of federal funding has made that note different. And they also continue to have a relatively low age of plant compared to their peers in the state. And so Northwestern has got some new leadership up there and they are handling the challenges as they come. But COVID certainly provided its fair share as far as the operations are concerned of this hospital in 2021. Porter Medical Center exceeded their budget in 2021. Operating expenses however came in under. Big reason for that was delays to Epic phase two and also some staffing shortages that they had and how that reflected on fringe benefits. We can see here the actual actual performance they significantly outstripped NPR over 20 and also operating expense growth which is right in line with everything we've discussed so far. Again, another hospital that over the last several years has continued to produce very respectable margins. And that is no different in 2021 with the recognition of federal relief spending on that bottom line. This is one of the best critical access stories from a financial perspective in the state. And there's no sign that that's going to come to an end anytime soon. They also being a part of the UVM Health Network do have someone that they're back in that respect. But as you can see, they didn't join the network until sometime in 2017. And so they were already producing financially very positive results at that time. They've made some significant headway in that space coming under the network. Payor Mix, they've had kind of a consistent erosion in the commercial space giving way to Medicare concentrations that are growing. That is really no surprise. Addison County is one of the oldest counties in the state. And so that is a trend that will likely continue in the foreseeable future. Utilization changes, they crossed the board from these stats, did have some rebound across each one of these. Although modest for the most part, it is promising to see again, physician office visits having a pretty good recovery from a 28% fall in from 19 to 20. And again, the same story, day's cash on hand, definitely bolstered by activity and respectable age of plant bordering on getting a little aged in that space. So there might be some renovations occurring in the future to this facility again. And additionally, as was discussed at budget time, UVM is assessing all capital projects as it relates to the network based on performance activity at its hospice. Rutherland Regional, pretty significant variance at 11.5% including 14% on operating expenses. As I stated, I called them out and I meant that in a good way at the beginning but their budget was one of the more conservative budgets that we saw coming in in 2021. And the truth is that they had significant rebounds in various areas for volume, which drove those revenues up and also the demands on various supplies and pharmaceuticals to meet that expanding need drove expenses up as well. And you can see when we look at actual performance in 2020 as it relates to that 2021 budget, they did not overreach their potential performance in 2020 which resulted in that conservative budget that they had. And so the variance actual to actual of 15.4% is a very significant rebound for them. So they did recover a large chunk of revenues there in that space and that continues into 2022 in needing to meet unforeseen demand in that community. Operating expenses tell the same tale they have at several other hospitals continuing to rise. And of course, with the fact that expenses did not subside in 2020 and 8.2% growth over that helps compound some of the operating pressures that hospitals are under. Again, another hospital that completely dedicates the majority of their margin to federal and state relief funding in 2021. This is a hospital that has gotten by here for several years on some pretty narrow margin activity instead relying on some of its internal resources to try to keep costs down and maintain what margins that they can. So they do have a bit of a bump here in 2021. But again, doubling back to the discussion about how those margins are derived, the reliance on federal relief may not be there in the future. And so some of the cost pressures that are being experienced in 2022 may return them to those narrow margins as the year for 2022 presses on. Relatively consistent payer mix at Rutland Regional. They did show some utilization rebound here in almost all categories over there prior your comparable which does fall into line with some of the volume rebound that they've been experiencing. Solid days cash on hand for the most part here providing a little bit of a cushion to meet some of the challenges. And then in Asia plant that again, as with some other hospitals is respectable in its position but bordering on getting a little long in the tooth so to speak. Southwestern, Southwestern is another hospital that took a conservative approach to their budget as they were not sure how volumes would rebound but as it turns out, volumes did rebound and that drove up net patient revenue and the operating expenses that come with such volume rebounds. So we have a 5.5 and 3.8% variance here over budget and then some significant variances again which is consistent with the narrative so far over 2020 actual and the year that was again another hospital that continues to produce some respectable operating margins and continues to come in with stories of efficiencies gained and efforts being utilized to maximize the resources that they're disposal at Southwestern Vermont Medical Center. So their margins continue to be very solid. We can see here that the strength of those margins certainly predates the pandemic. And then in 2021 incorporating a significant amount of federal and state relief into that operating margin has helped bolster those further. Again, a very stable pair of mix in this space as reported to us and some significant rebound and utilization around acute patient days and OR procedures which is very much in line with the narrative that they've provided. They were one of the hospitals that did see some rebound in emergency room visits. Moving to the bottom of the page here, we always note that the days cash on hand that this hospital reports does not factor in that held by the parent company. So oftentimes it seems low and it is compared to its peers but those days cash on hand are held largely with the parent company and they are provided with the figures you see here on the screen. This is one of the older hospitals in the state from an aged plant perspective. They are undergoing actively a renovation of their, I believe it's their ED and their hospital entrance. So we would anticipate as those begin to come online that that age of plant will come down. So not to worry about the days cash on hand there, the parent company holds that and they will be a financing mix there that occurs to help pay for that project. Springfield hospital, Springfield's the narrowest of variances for all intents and purposes. They came in at budget on NPR. A major component of that was some final settlement information that they received with the ACO for 19 and 20, about $4.4 million and that pushed them up for their NPR FPP to the figures you see on the screen here. Operating expenses continued to be over budget for this hospital but they did, as you can tell, significantly outperform their actual experience. I think that's probably the largest variance that we have in the hospital system. So Springfield had some significant operational attributes in the last year. Their adult day program was put on hold until July which is essentially almost their entire fiscal year, three quarters of it. And then their arrangement of the state for their psych facility to hold COVID only patients there really suppressed their revenue generating capacity for about six months. In addition to that, they had lower volumes as well. So they got off to a rough start from a revenue perspective but did see a significant rebound as the months went on. And also when the psych facility opened up they were able to bring in a variety of patients and really fill those beds which was not happening with the arrangement of the state. So once those agreements came to an end they were able to kind of restart, regenerate and they began to see higher volumes coming in. And ultimately they reported to us although it's not final final that they produced a surplus margin of about $640,000 which is an important rebound compared to some of the other margin activity that this hospital has experienced in recent years. Payor mix, slight erosion in the commercial space also an erosion in the Medicare space with that mix shifting to a more Medicaid dependent payer mix. We don't have a ton of utilization data available so we don't have that to share. They're still finalizing that but this is the hospital as we move down who again, but to a lesser extent has benefited from some of the federal relief that has come in. Other days cash on hand are still very low in those low 40s for 2021 and upper 40s for 2020. And it's also a hospital that has an increasingly old physical plant and without cash or investment returns to help pay for that, they'll probably continue to age and make repairs as they need to to keep the hospital safe and running. So Springfield is under new leadership as well and they're looking forward to carrying the organization into the years ahead. And finally we reached the University of Mont Medical Center. This organization missed its budget by 7.6%. There's no secret as to some of the primary reasons why pandemic activity being won at the state's largest hospital, the closure of Fannie Allen and the shift of procedures to the main campus where capacity just could not be kept up as it would have been at the Fannie Allen campus and also the cyber incident that occurred that had some serious ripple effects that the subsequent months had to absorb. And the hospital was never able to quite claw all that back from a revenue perspective. And so with that operating expenses were not significantly over budget, although the hospital does cite workforce shortages being a massive component, both the number and cost of travelers being nearly double I think the number that they had employed at the end of the year was 342 travelers and with premiums on those staff going up the cost continues to rise exponentially, which did offset some of the salary and benefits items that they had for their regularly employed staff. Again, no huge surprise that they did even with all of those complications they still surpassed 2020. They were one of the hospitals that really felt a pinch from the cessation of those non-emergent elective procedures, largely based on the fact that this organization takes care of higher acuity patients the level of care of patients that they care for. And so when patients don't have anywhere to go, they go there and also for more complex procedures they will go to the University Medical Center. So they really, even though they outperformed their 2020 was a significant hit to revenues. And as we stated, the operating expenses in 2020 for most of these hospitals did not shift with those revenues. And so significant variance is occurring here year over year to operating expenses for the University Medical Center. Now, the history of margins here we can see reductions in margins dating back to 2016 and 2020 being significant. They did have, as we started this discussion very significant federal and state relief dollars that came in to help relieve some of that. A portion of that they were overlooked for in 2020. But still, if we're to look at this on a two year basis here the organization itself has produced about a $32 million margin in two years. So they've produced in two years what they produced in 2019 alone. And it's about a third of what they produced in 2017. So there's still some work to do there. The start of this year and the workforce pressures and inflationary pressures that a hospital this size is experiencing are certainly gonna play a part in how their 2022 plays out. And so that will probably be true for the entire system as well as the environment continues to shift on a regular basis as it relates to some of those cost pressures. Payer mix remains relatively stable at this hospital. The commercial payer mix is relatively strong. But you can see here utilization they did experience some rebound in some of those places. Physicians office visits still came in under but not as extensive as they were in 2020. This organization has very respectable days cash on hand and age of plant. Although they froze most of their capital projects in 2020 they are restarting some of those selectively. Most of them being what they determined to be critical need so that they can weigh the outcome of the layout of cash or financing versus the need for some of that physical plan investment to replace or repair those assets. So that brings us to the end of the system analysis and the individual hospital profile. So I'll just do a quick run through here in the appendix of supporting information. A lot of this is just numbers and tables not something you really want me walking through but some of these point in time metrics that we collect just to show some of the year over year changes in days cash on hand, days receivable, days payable, debt service coverage and age of plant. NPR and FPP five year results for those at home who wanna crunch some numbers here. Five year annual growth rate for the system including the two pandemic years 2.9% year over year. And again, using some of those individual hospital percentages with growth year over year based on NPR FPP results. The same thing for operating expenses and operating margins that is a duplicate slide. So is that one I apologize. And here is the individual look at some of these hospitals to provide that illustrative context of how sporadic some of the expectations results are versus that trend. Each one of those trends lines 3.5% each one of those I bars that we put in is plus or minus 1% off of that. And it's all, they may look different in their size and scale but it's all dependent on the figures to the left and the vertical axes. And you can see as discussed that there is very significant shifts here going on over time which again highlights the difficulty in hospitals budgeting and operating this and the Greenmount Care Board trying to regulate in this environment. And then for those at home who may don't understand some of the terminology that we use, we always keep a glossary on hand to help out with that. So Mr. Chair, that concludes our presentation here on 2021 and the result activity of the hospital system and the hospitals as a whole. So I'll turn it back over to you. Thank you very much, Patrick. And I'm gonna open it up for board comment or questions and I'll go in alphabetical order starting with board member Holmes. Okay, great. Well, thank you so much Patrick and team because I know there's a lot of work that goes into putting all these slides together and it's a tremendous amount of information really helpful. And I'm struck by all the variability across the system and as you highlighted Patrick, it clearly stems from the slingshot effect that you referenced. And it makes me, it does make me think about how we approach budgets going forward but I guess that's a conversation for next week. I'm wondering if you can just talk about a little bit about the days cash on hand in the sense that it's a striking changes over time but I recognize that it's a lot of temporary infusion of federal and state dollars that are driving that and I'm wondering how we should be thinking about that how much you'd mentioned some of these payer advances that are being clawed back and how do we think when will we know sort of where the resting spot of some of this days cash on hand might be how do we interpret this? Certainly. As we discussed, there is definitely a cushion effect going on here but the precautionary note about where it might settle is kind of a moving target because if hospitals continue to experience the surge in costs or as we hear in various articles kind of runaway costs and the pressures of workforce and the need for these hospitals to attempt to react to those pressures and shift differentials to maintain folks on in addition to their normal shift or retention bonuses, overall wage increases, whatever without any further stimulus money coming in the hospitals kind of get left out in the cold and so there's this cushion of money that's there to help with that but as that is whittled away it's going to return to pre-pandemic levels and so that's really where I get a little bit concerned is that yes, the balances are healthy as of 9.30 but what does that mean as we go through fiscal year 22 because since this activity was finalized the hospitals have dealt with a very serious COVID variant that is Omicron and we all know about the stories of ICU beds and the concerns that existed throughout much of the winter months and so a lot of the hospitals when they came in last year with their budgets didn't think matters like inflation or workforce were going to take the turn that they did or the premiums that they're paying on travelers were going to rise like they did and so there's two things that can happen they can utilize some of these cash balances to cover that and that can help get them to their next budget cycle where they can then factor that in and try to recapture some of that through their budget request in 2023 for all of that unanticipated activity that occurred over the course of this fiscal year so where that settles is a bit of a moving target and that's part of the problematic nature of this pandemic environment is things seem to be easing as it relates to the contagion but there's a lot of consequences that are going to come out of this that hospitals are going to have to grapple with even as the weather gets warmer we move that side and things subside a little bit so where it settles is a very yeah I was just wondering if for example there are payer advances that are living in there that are going to be removed or how to be paid back I just wonder if I recognize that everything is volatile and there's a lot of market forces right now I guess I'm just trying to figure out if there's also dollars in there that are going to be clawed back in terms of repayments or things like that too and do we have a sense of the timing of things any of that? Yeah I'm trying to recall and maybe Mike Del Treco who I think is on the line may have a little bit more information around that but there is a deadline by which these payer advances will undergo some sort of reclamation whether they're paid back or the claims that are coming in are offset by these advances so I'm not sure what the timing on that is I know from the last budget cycle that it had begun and so I'm guessing that over the course of this fiscal year that should come to a conclusion at some point here soon. Okay great, no thank you. I guess if you could just slide 15 for a sec just another slide that struck me is the operating expenses slide and I guess it's more of a comment than anything else but just a comment and you walked through it with specific examples from each hospital but there's such a difference in the actual to actual variance between a hospital such as NMC with their 2.3% increase in operating expenses to a hospital like Copley with a 20% increase in operating expenses and it is just interesting in trying to figure out and unpack the why's I think will be important as we go forward what's gonna carry forward and what's really a one-time impact but these variations this variance is more than we've ever seen and it goes to your point entirely about it's such an odd year 2020 was an odd year 2021 is an odd year and we're gonna have to there's gonna be another unique odd year that we're in right now before it all smooths out and so as regulatory body we have to be aware of all this variability and all this uncertainty as we go forward so this just struck me as an example of the wide range performance across the hospitals and trying to understand why will be really important as we move forward so I don't really have any other there's a lot to digest here and I really appreciated everything and I think I need to spend more time digesting but I appreciate all the work here. Thank you, Jess. We'll move to board member lunch, Robin. Hi, I wanna echo Jess's thank yous because I do think this was a tremendous amount of information and work. I actually don't have any questions like Jess just indicated I need a little more time to digest the material I did find it very helpful and I do think we're gonna continue to have a tough year next year so I'll leave it at that for today. Thank you, Robin. Next we'll move to board member Pelham, Tom. And I'm gonna echo Robin and Jess and say this is a tremendous amount of work on 14 moving parts and kind of I think going through the pandemic people might got a sense that everything was the same across the 14 but clearly there are a lot of personalities here in terms of each hospital that we're gonna have to get to know. I just basically asked her kind of was a lead into one of my questions. So we have all the audits for 2021 for all 14 hospitals. All but Springfield. All but Springfield. And have you and are the financials that you're presenting today reconciled to those audits or can be reconciled readily? All but Springfield I believe. Yeah. All but Springfield. Let's see. So do you have any kind of sense now and this kind of gets at the question Jess was asking any sense of the kind of magnitude of what might be received out there but unrecognized? So yes and no. Judging by the narratives I have not read through the auditor's notes of the audits that the hospitals sent but judging by the narratives the majority of federal funding that has been received has been recognized by these hospitals with maybe a couple of outliers and even some hospitals who didn't have any additional revenue to recognize in 21 but those who did receive it or had hold over revenue from 20 with the duration of the pandemic and a growing comfort around some of the federal guidance have taken all of that in. So when you're looking at the NPR number and there's one, you don't have to go back to it but there's one table that kind of broke it out into FFT and then the other net revenue is all of that to your knowledge is all of that FPP for example with Medicaid I mean Medicare, has that been reconciled and the books closed on 2021 or is there still any outstanding issues with Medicare for example in terms of their FPP? That is not a question I can answer. I'm still a little shaky on the timing about how FPP reconciliation occurs as it relates to the hospital fiscal year. So for 2021, my guess would be no because I believe that occurs on a calendar year. So with the hospital's fiscal year concluding in September that would still leave three months of 2021 activity that would have to occur. So I am not sure how that relates to how these audits are concluded as it relates to some of that FPP, those FPP dollars. And then finally, I think just in terms of the slingshot whether or not you have any observation about because Medicaid is basically fixed perspective payments and Medicare is fixed perspective payments but it gets reconciled. Most of the volatility or a lot of the volatility here in the slingshot is in the commercial corner, I would think. That I'm not sure about. That kind of that slingshot that we're seeing I don't believe falls along payer lines primarily because some of the reimbursement or payer mix shifts, yes, there's some space there for the reason for that slingshot and activity but the patient volume experience that these hospital had was very different on a hospital by hospital experience and very different on a service line experience that I wouldn't wanna wager that it falls on payer guidelines or payer boundaries. So I'm not sure about your question if that's true or not. Well, we can explore that, but great job. Great job for you and your team and I think you set the table pretty well for us to dive in. Thanks. Thank you, Tom. Now we'll move to board member Walsh. Tom. Thank you, Chair. And thank you, Patrick and team, great work. I just wanted to kind of check my understanding so far with you and give you an opportunity to say what I've understood and maybe what I haven't. It looks like each facility has a pre-pandemic pattern and then the pandemic hits and everyone suffers, utilization drops. That's buffered by the stimulus and relief payments to the extent that 12 of the 14 facilities were able to maintain a positive margin. And looking forward, there's inflationary pressures and there's workforce pressures that create some uncertainty. But is it somewhat reasonable to expect that organizations would return to their pre-pandemic performance? They have like a signature leading up to the pandemic. Can we do, how much confidence do you have that they may return to their pre-pandemic performance? Really hard to say. It's hard to say because we don't have any insight into some of the hard lessons that are being learned as a result of this. There's probably some very different thinking going on in these organizations about what their organization is gonna look like as we potentially enter the backside of these very difficult years. And so it's hard to say in that respect. We're gonna be seeing some leadership turnover at some of these organizations. Most notably comes to mind is at Brattleboro and UVM. And so that's gonna provide opportunities for hospitals to change their trajectory a little bit. So that was some of the lessons that have come about from this. Hopefully begin to chart a new course. But as for what that experience that was in the world previous to the pandemic, it's really hard to say. I sincerely hope that some of those patterns that were exhibited there don't return with these hospitals. So I've gotta take a pass on that. I think there's a lot within that statement that it's kind of outside of our understanding right now. Fair enough. And would it, I wonder if it would be helpful to look at more years going back to understand the year-over-year variability for a bigger piece of time pre-pandemic to understand if there's any stability in the noise of that system for each facility. Understanding that there was a shock, there was a cushion, there's uncertainty about the future. But to better understand the longer-term prior performance might be helpful, at least in my mind. And I'm wondering what you think of that. Well, that's something that we certainly have the capacity to produce. We've been keeping records going back almost two decades, I think, within our files that we can build off of. But if we're to look at maybe the fact, 10 years leading up to the pandemic and assess some of the fluctuations that occurred on a year-to-year basis versus what we're experiencing now, that it's certainly something that we can dig into, especially if it's helpful to you to get your bearings in as you come into an environment that's anything but stable at this time. It has a great amount of variability to it. Well, I'll try to learn from you all. I don't wanna create extra work for anybody, but understanding the performance of the hospitals with their margin and cash on hand age of facility. I really like the images that you, the figures that you produced for that. Understanding that history more than just back to 2017 or 2018, but going back a little bit further to see what that variability was like leading into it, leading into the pandemic. We see the shock. There's a cushion. We have uncertainty, but what does the past suggest about what the future might look like? I'm interested in that or at least discussing it with everyone next week. So thank you very much. Thank you, Tom. I just wanna say a couple of things. First of all, I want the record to reflect that at three o'clock, board member lunch must leave. We are in the middle of a legislative session and she is graciously working on the board's behalf on writing some language for a bill that is moving very quickly as crossover approaches in the legislature. The second thing I wanted to say is, besides a big thank you to Patrick and his team, I wanna publicly acknowledge and thank as I have previously, but want to continue to do the outstanding work that's been done by our congressional delegation, bringing dollars to Vermont hospitals in order to keep them whole throughout the pandemic. And if it had not been for the hard work of our congressional delegation, bringing those dollars to our healthcare institutions, this picture would look much, much worse. So thank you to our congressional delegation. And like others, there's huge variation. And we are gonna have our work cut out for us this summer as we go through the budgets for each of these hospitals individually. And I do think that the board did make a wise decision last year not to have any enforcement for this year because it would be hard to justify enforcement action given the extreme period of uncertainty that these hospitals have been through for over two years. So with that, I am going to open it up for public comment. And at this time, does any member of the public wish to offer a comment on the presentation today? And I'll start out with Mike Del Treco. Mike, are you there? I am. Can everybody hear me and see me? We can now, yes. Okay, so sorry about that. First, I just want to take a minute to express my thanks to Patrick and the budget team for their efforts, specifically outlining some of the challenges and real vulnerabilities related to fiscal year 21, 22 and into the future. I want to emphasize a few points that have been discussed, but I think are really important to really emphasize. I'm concerned that those that aren't familiar with federal funding might jump to the conclusion that is all well with the hospital delivery system. And in this inner circle, I'll call it, we know that's not necessarily true, but so I want to take a moment to go through a few things. One, as mentioned, operating margins with the recognition of about this year, $129 million of PRF funds where $87 million are positive 2.8%. If those funds were not used, we'd have a negative $41 million margin or negative 1.3%, a swing of 4 percentage points, not insignificant. With PRF funds, two hospitals still had negative margins and without those PRF funds, seven hospitals would have been in that negative position, more characteristic of the past. So maybe a minor suggestion is that slides 16 through 18 should include a with and without PRF funding just to really illustrate that point. As an industry, we are very challenged with this fast approaching and makes pre-pandemic performance probably a thing of the past. As we look to the future, we have a very challenging labor market that already includes increases for current workforce, traveler, new traveler type expenses, and the combined with the need that we have coming down the pike around future demand. This includes aging workforce, new salary requirements, and the real issue that we often forget is the mental health challenges that our current workforce will face exiting this pandemic, a big concern of mine. Two, concerns related to decreasing utilization and revenues related to COVID activity. Yes, the pandemic is terrible, but it has had a positive increase on hospital, revenues, so that will be declining. We have inflationary growth in the energy sector like we've never seen before. This issue alone will have significant impact on everything a hospital buys or does moving into the future. And then finally, as we've all talked about, the elimination of PRF funds into the future will put us in a new situation as we move forward. And I did wanna talk briefly about the cash positions of organizations, and I used two words, uncertainty and volatility. And I wanna emphasize that the change in the cash position does not mean Vermont hospitals have too much cash. These dollars are critically important for Vermont's hospital pandemic recovery, revitalization of infrastructure, and repayment of other things like Medicare advanced loans, or I hope it doesn't happen in Vermont, but audits that force hospitals to potentially repay PRF dollars. Equally important, we need to recognize that just alone in the first quarter of calendar year 2022, the stock market has lost almost 20%. So these cash numbers from 2021 have changed already. So again, thanks to the budget team for all their work. Patrick, really appreciate working with you. And Lori, whenever your date is that you're moving on, I will certainly miss you as well. Nobody will miss her more than this board. Thank you for those words, Mike, and very well said and points well taken. Next time we'll call on Ham Davis. Thank you, Kevin. And just a couple of timing questions. I'm curious what the time framework is before you get to a full final piece of guidance for all the hospitals. Can you say roughly when that will be? So I can't give you any certainty on an end date, but I can tell you that each of the rest of the meetings for the month of March are inclusive of hospital budget guidance discussions, and those will start next Wednesday. Okay, thank you, Kevin. So in other words, I'm just inferring from that that it pretty much is very likely that you'll have a final position on guidance by May 1. Roughly, maybe that's unfair. Well, I think by May 1, certainly, I would hope quicker than that. Okay, that's fine, that is my question. My second question is, it looks like there are gonna be some mid-year correction requests by hospitals, at least probably, I think somebody said that Rutland was gonna have one, and I believe UVM is gonna have one. Is there a timeframe for that? In other words, is there any, I don't know, Patrick might know this, is there any point at which, either if you're a hospital, you either have to ask for a mid-year correction on your rates, or you can't do it in that fiscal year? There is, and I don't know if Patrick or Mike Barber has the language, the rule language in front of them. I believe it's by May 1, but I would defer to Mike to support that statement. And just to confirm, Ham, the only hospital that has officially asked for a rate hike mid-year so far has been Rutland. We have heard from two others that may be coming in. I would say one is definitely coming in. And that Rutland hearing is scheduled for 8 a.m. on March 17th. Great, thanks for that, Kevin. I think that there's been a story in the press that has been around the whole United Health Care thing that UVM is coming into. I don't know that, but I mean, that's been in the news. But in any event, I think if I'm just gonna assume it's roughly May 1, then if that's not exactly right, you can get it to me later. It would be improper for us to mention somebody who might be coming in. Well, I know, that's fine, but what we can look forward to is that let's say by May 1 that the pattern for the FY23 will be basically set. You'll have the guidance done. If you haven't done earlier, that's great. You'll have the guidance done and you will have seen, you will have seen whatever change request that you're gonna get. Hopefully, yes. Thank you. Thank you, Ham. Is there other public comment? Is there other public comment? If not, I wish to thank Patrick and the team for an excellent presentation of a lot of data and a lot to chew over. So with that, is there any old business to come before the board? I'm hearing someone speak, but I'm not hearing them very loudly. Maybe that was just background noise. Is there any new business to come before the board? Hearing none, is there a motion to adjourn? Go move. Is there a second? Second. It's been moved and moved a couple of times and seconded a couple of times to adjourn. All those in favor of the motion, please signify by saying aye. Aye. Aye. Any opposed, signify by saying nay. Thank you, everyone. Have a great rest of the day.