 So it is 1022, I'm going to reconvene the meeting of the Green Mountain Care Board. And I'm going to start by just taking a quick role of the board members to make sure everyone is back. Jessica Holmes. Yes. Robin Lunge. Yes. Tom Pelham. Yes. And Maureen Youssefer. Yes. Great. So, Kim, if at this time you could swear in the team from Springfield? Yes. Would you please raise your right hand? OK. Do you swear that the testimony you're about to give shall be the truth, the whole truth, and nothing but the truth so help you God? I do. Yes. And with that, Bob, whenever you're ready to begin your presentation, take it away. All right. Thank you, Kevin. I'm Bob Adcock. I am the new CEO at Springfield Hospital. And so I'm the newest member of the hospital leadership family in Vermont. And I'm very excited about being here and having the privilege of being on the team at Springfield. I want to start off by thanking the board for all the work you do for health care in the state. Accessible, quality, sustainable, and affordable health care, that's a common goal that all of us should have and we should be working towards. So I applaud the work that you're doing around that for our state. So thank you for giving us an opportunity to present our budget today. Before starting, I want to take a few minutes just to make some comments about the hospital and that the intense storm that the hospital has weathered here in Springfield. The last two or three years have been extremely challenging for the hospital with the Chapter 11 reorganization and the effects of the pandemic on the hospital. So we've reorganized. That's been a very costly process. And we've also had lots of challenges around cost and volume and revenue with respect to COVID. But during these times, the hospital has shown a tremendous resiliency and a tremendous resolve to meet the needs of our community here in Springfield. So our slogan is where people come first. And it's really more than a motto. Our slogan for us here, it really does make a difference in our organization. We have a great team of caring professionals, employees, doctors. We enjoy a strong community support here in Springfield. We have a dedicated leadership team and governing board and a group of quality professionals, doctors and employees who do a great job for us every day. I do want to comment on our partnership with Springfield medical care systems. There are FQAC in town and their delivery system. We have a strong partnership with them. And we'll talk about how that's changed since our last presentation. But that's certainly a strong asset for the community and for the hospital. And finally, I'd like to thank Tom Udener. Tom has been a great advisor and mentor for me since I've joined the state and been very helpful. And I also want to thank Governor Scott and Secretary Smith for all of their support that they've given to the hospital through these challenging times. So next, I want to introduce our presentation team. Our interim CFO, Tata Westcott, has been in that position for about six months. And she has worked extremely hard to put together the numbers in the budget for us. And also, I want to also thank our QHR partners who are also on today. Chip Holmes, who is the senior vice president. And Mike Donahue, who is their vice president. Both of these individuals were very significant through the reorganization of the hospital and also continued to consult with us with respect to the operations and our continued turnaround of the hospital. So our thanks to them for their assistance as well. Bob, is it Tata's birthday? Tomorrow, I think. Oh, I see the balloons and everything quite festive. Happy early birthday, Tata. Thank you. Well, Tata's looking forward to a day off. And she certainly has done a great job and deserves it. So Tata, would you take over the slide duties for us, please? OK, so this is our introduction slide, which I think we've already covered. So if we can advance to the next slide, please. Is it advancing? It should be. Do you not see it advancing? I'm still on slide one. Yeah, that's where we're on. What about now? Perfect. OK. Perfect. Thank you. I think it would be. I'm not sure if you've had any other technical challenges with these presentations. But hopefully that'll be our only one. So I'll start off with our hospital overview. Springfield Hospital is a critical access hospital. 25 acute and swing beds with 10 distinct part psychiatric beds, which are located in our Wyndham Center in Bellows Falls about 10 miles from the main campus. We provide outpatient and professional services, surgery, ENT, gynecology, ortho, urology, and psychiatry, as well as our emergency department, which are key services for our community. The number I'm going to be quoting numbers did our 6.30 fiscal year to date, which is through our first three quarters. And if anyone has any questions about July or where we are in August, we'll be happy to pull those numbers also. So through the first three quarters, we're running an average daily census of 9.7 on our acute service and 2.93 in psychiatry. And that does require a footnote because we did close admissions to our Wyndham Center, our psychiatry beds, during COVID because we devoted that unit to COVID positive psychiatric patients for the state. And so we took the unit offline and closed it and made it available only for that group, which is affecting our year to date census. And as we go through our budget and our volume assumptions, you'll see that we're returning the census to almost completely full, which is a reflection of the demand for psychiatric services in the state that we're seeing across the state right now. Emergency room visits, we're running just under 31 visits a day, so 30.66. So we're looking at about 10,000 visits this year. Surgery volume 658. And again, that was affected quite a bit by COVID the first two quarters of the year, so our surgery is now picking back up. We are proud of the role we've played with respect to our COVID community response plans. We did set up a COVID vaccination clinic and year to date we have given 16,124 doses of the vaccine. We continue to be a major economic driver in Springfield in the surrounding area with 413 employees. So good paying jobs with good benefits and very important not only to the health care of our community but to the fabric of our economy here as well. Next slide, please. I'll comment that since our last presentation a year ago, we have completed our chapter 13 reorganization and as a result of that, the hospital and our previous parent Springfield Medical Care Systems have split into two separate organizations. We do continue to enjoy a strong partnership and we work together under a shared service agreement which saves costs and allows us to strengthen services to both organizations and it also allows us to continue the long history of our culture and our partnership together. So the both organizations emerged from chapter 11 in December, we were successful in our split and we're also pleased that on July 7th, our chapter 11 process was closed out and that is very important to us because physical year to date through July, we have had about $835,000 of incremental cost that we've shouldered with respect to the reorganization trustees and legal fees around that process. So that $835,000 has been a huge factor in our financial picture this year as Cata will cover when we get to the financial statements. Next slide, please. So our budget for fiscal 21, we anticipated a good recovery from the pre-COVID levels. The recovery in Springfield is now starting to catch up but during the summer of this year, we have lagged behind the recovery that many of our colleague hospitals have seen. Although we are starting to see that come back now but there is still quite a bit of uncertainty around our volume with respect to COVID particularly with the projections that we're looking at for the Delta variant over the next, particularly in September. So compared to FY19, we've experienced a 20% drop in volume across the board primarily driven by the COVID pandemic but also a good bit of that was to drop in numbers by taking the psychiatric center offline and those again, we will see when we make our volume assumptions that we are putting those back to normal levels and I'm gonna stop and let Cata pick up on this slide and she's gonna talk about our improvements in operating income because we have experienced improvements in our operating income and sustained cost production strategies from previous periods even though our net patient revenue has declined due to the volume drop. So I'm gonna let Cata pick up right there. Thanks, Bob. Good morning, everyone. So these last two bullets on this slide, as Bob mentioned, are referencing that we experienced in an improvement in our operating margin over the last couple of years despite the fact that our net patient revenue has declined over those last couple of years and I'm gonna advance to the next slide so we can talk about that more in detail. It's not easy doing the slides and the presentation at the same time, so bear with me. Okay, so what this slide is illustrating is that even though we have struggled over the last couple of years with declining revenue, COVID chapter 11, not receiving any PPP money, which Bob will talk about in a couple of slides, we've really made some real progress through what we've been calling and referencing as the perfect storm and we've done that through managing our expenses. So in this slide, you can see kind of a side-by-side comparison on the left-hand side is Fiscal Year 20, the right-hand side is Fiscal Year 21 projected and the last bar in each of these years show our operating margin in comparison to Fiscal Year 19 and in Fiscal Year 19, we had an $8.2 million operating loss. So looking at 2020 on the left-hand side, that last bar that shows 64%, what that is illustrating is that our loss in Fiscal Year 20 was 64% of the loss in Fiscal Year 19 and then looking at the right-hand side, the 21 projected loss, you'll see it's 48%, that's that last bar and that is representing that our operating loss for projecting to be 48% of our Fiscal Year 19 loss. So overall, that is saying that our operating margin has improved by about 52% since Fiscal Year 19, even with declining revenues, meaning that our decrease in expenses has been greater than our decrease in revenue. And over that period of time from Fiscal Year 19 to what we're projecting for the end of this fiscal year, there's been over a $5 million reduction in expenses. Bob, I'm gonna turn the next slide back over to you. Okay, so we, hold on, my pages have got away from me. So our, you know, Kater's point is important to where we are in the lifetime of the hospital because we have made significant cost reductions. It's just that we've had, also had drops in revenue due to COVID drops and we've had expense increases from the reorganization cost. And so we benefit today from a number of cost initiatives that were successfully completed in the last couple of years. Slide six shows those. So, you know, we have the closure of our child center, labor reductions in staffing changes in numerous departments, changes in our employee benefits, restructuring in our emergency department and our inpatient hospitalist department. And those are both changes in physician staffing groups as well as anesthesia. And we've also had quite a bit of restructuring in our management staff. And one of those things was for me to come and join the team full-time as a full-time CEO here. Someone keeps calling me, so forgive me for that. So we've seen, we've continued to enjoy these expense reductions, although we have not been able to offset the losses in revenue. And we're continuing to do that. We're continuing to look at our operating processes, our management of cost, productivity and expenses and to ensure that we are running the hospital as efficiently as we can. And those processes will continue as we move forward into the new year. Next slide, please. And this is really kind of the theme of our presentation today. And that is the history of the last two or three years at Springfield has been the perfect storm. Our chapter 11 reorganization, in addition to has cost a lot of money and affected the hospital pretty profoundly as well as drops in revenue and volume from COVID-19. So if we go through this slide, we'll see that we've had quite a bit of COVID related decreases in our cash receipts. But those are primarily driven from drops in volume or cost due to bankruptcy in our chapter 11 have been about $4.8 million over the period, the last three year period. And then the final thing is where as we applied for PPP funding a year ago in our round one funding was approved by the SBA. However, it was withheld from us due to our chapter 11 status. Now we're appealing, we continue to appeal that ruling because we believe that we should be entitled to that funding, but we did not receive any PPP funding during that period of time. So that was also in by not receiving the round one funding, it also disqualified us from applying for the round two PPP funding. So those were also big cash flows setbacks to the hospital in the last year. So next slide, please. The effect this has had on our cash has been pretty challenging for us. So as of July 24th, we were at, no, July 31st, excuse me, as of July 31st, we had 24 days of cash on hand. September 30th, we're projecting to be at 27. And that is being driven by a cost report settlement that we've received in August. So we believe we're the lowest days of cash on hand of any hospital in Vermont. And that is causing a lot of financial challenges for us every day. Next slide, please. So coming along to our vision, again, the critical importance of Springfield and our hospital, of our Springfield hospital to our community can't be understated. Not only do we see more than 30 ER patients a day and take care of our inpatients, we provide a lot of other essential services to our community. So from a vision standpoint, our vision in FY22 is to stabilize our operations. We want to stabilize our days in cash on hand and our operating margin, which will allow us to sustain our operations and continue the turnaround that the hospital is experiencing now. So I think that that is really our vision is to be able to stabilize our operations and continue that turnaround. We envision a sustainable future either as an independent hospital or as a system partner. And we remain open to pursuing partnerships whenever they can improve efficiencies for the hospital and improve care and cost in our marketplace. I know prior to my arriving here, there were conversations taking place regarding partnerships for Springfield. Those, the chapter 11 process in the COVID pandemic put those talks on the back burner. But we are still open to continuing those. So, but we do envision ourselves as a sustainable hospital and critical to the health of the community. Next slide, please, Kate. So based on our vision, we are requesting a net patient revenue increase of 7.8%. And that's a, that is a charge increase of 8.3%. That increases necessary to allow us to continue our recovery and to ensure operations remain sustainable in fiscal 22. And to continue to provide access to our essential community hospital services. Without this, the 7.8% increase in net patient revenue will put us at a projected operating margin of positive 3.4%. And we believe that will allow us to be very sustainable in 22 and allow us to continue our recovery efforts to put the hospital on firm footing. Without the approval of the request, I think we're going to continue to face significant financial challenges in the coming year. And it will definitely slow our recovery process significantly. Next slide, Ada. Thank you. So on slide 11 is our budget assumptions for the year. We are projecting 794 acute emissions with 3,828 patient days. We are, that number is a little bit below where we are estimated actual in 21. And that is based on our conservative vision of the future, not knowing how COVID impact will continue to influence the hospital in our volume. In addition, we are in a marketplace where we're seeing significant decreases in utilization and efficiency due to the wellness efforts and population health efforts that are being made in our community. So we're allowing for that in our projections going forward. We aren't budgeting a significant increase in swinging missions. And that's based on the lack of subacute beds in the state. There are many subacute patients that are being held around the state now and we are being contacted by some of our colleague hospitals to take those patients and we're working with them towards that goal. So we're significant increase there. And also again, a significant increase in psychiatric volume. Again, the Wyndham Center was closed most of last year and in most of fiscal 21, it was closed and being held for COVID resources. And we are now returning to average daily census in the unit now is usually eight to 10. And the difference between eight to 10 and 10 is usually the logistics of getting the next patient transferred into the facility in the existing one transferred out because every hospital in the state now has psychiatric patients boarding in their emergency rooms. And we have our own psych facility and we have psychiatric patients boarding in our emergency room pending placement. So even though we have the beds, we are also experiencing that challenge that many of our colleagues are experiencing. ER visits, right now we're running 30.6 a day year to date and we're budgeting 31.5 in the upcoming year for a total of 11,500. And we're budgeting an increase in surgical cases as well. Hopefully that number won't be affected by more people deferring elective cases due to the Delta variant. Next slide, please. So I think I'm gonna wisely ask Kata to address the income statements. Before I start, is the presentation, how does that look on your side of things? Looks good here, Kata. Is it look okay? Okay, because I can't tell if I'm in presentation mode or not, but as long as you guys are okay with it. Yeah, we're not really seeing the presentation mode, but we still see it. Let me just see if I can fix that. Maybe that's what this is. Kata, this is Patrick. If you go to view at the top. Yep. And you go over to reading view. Okay. Click on that. Could improve the look of the slide or not? Or not. I know, I know. I think where you were before, if you had said from current slide, it would do it in presentation mode instead of, but now you're not on that screen anymore. Let me just try this. Yeah, try from current slide. Yeah, it's just, it's not budging. So we'll just have to live with this, I guess. And we all have the printouts. So I think that anybody following from home without the printouts is just gonna have to enlarge the specific portions of their own screen. Sure, Mo, and this is Sam from the HCI. Could I just offer a suggestion? Go for it, Sam. So if you see in the bottom right corner where there's the percentage bar, there's a little like projector icon to the left of it by the minus sign. Try clicking on that. I wonder if I have to, oh wait, let me see. Okay, it didn't do anything. Apologies, that always works for me, but sorry to interrupt. I was very confident that that would work and I was wrong, apologies. Thanks for the advice, but yeah. Okay, so we'll just go with what we have here. So looking at the income statement, if we wanna focus on three quarters of the way down on the slide on the operating income and loss line, you can see that we have fiscal year 20 actual, fiscal year 21 projected, the 21 budget, and then the 22 budget. Fiscal year 20, you can see we had a $5.3 million operating loss. This year we're projecting to have a $3.9 million loss, which is compared to just under a $700,000 profit that we had budgeted for this year. And then as Bob had mentioned for fiscal year 22, we are budgeting for a 3.4% operating margin, which equates to be a $1.9 million operating margin. Another thing I wanted to point out on the income statement that might be jumping out at everyone is the second hand column, which is the fiscal year 21 projected, basically just a little bit up from the bottom, that non-operating revenue line of 18 million. Again, in the fiscal year 21 projected column, that represents the gain from our chapter 11 exit and the release of debt, which we had about $18 million. I'm gonna go on to the next slide here. So this slide is on our revenue assumptions in comparison to the 21 net patient revenue budget. As you can see, we said we are requesting a net patient revenue increase of 7.8%. That's almost equivalent to a $4 million budget-to-budget net patient revenue increase from last year. Looking at the left-hand side of this slide, what components are making up that $4 million increase? We have utilization, the rate effect and bad debt and charity care. Utilization we're showing going down, the rate effect obviously going up, increasing our net patient revenue and our bad debt and charity care going down, which is increasing our net patient revenue and the bad debt and charity care we're budgeting based on what we're experiencing now, which is a decrease from prior years. And then looking at the right-hand side of this slide, these percentages represent the payer, NPR changes, budget-to-budget from last year. And this is a mixture of our rate effect and utilization combined. Basically, this data comes right from the workbook that was submitted with the Green Mountain Care Board budget submission and this comes from appendix one, table one, which I'm sure that you've had a chance to review, okay. So looking at the balance sheet, obviously our goal is to continue to improve our financial performance since exiting chapter 11. And I just wanna first focus on the fund balance, which is the second line from the bottom. You can see we had a negative fund balance in fiscal year 20 of 12.5 million. Fiscal year 21 projected. We have a $1.7 million fund balance, which is the result of exiting out of chapter 11 and releasing all of the debt, or not all of the debt, but $18 million worth of debt. So, and then in year 22, you can see that we're trying to strengthen our fund balance by having that 3.4% operating margin, which is gonna increase our fund balance from 1.7 to a projected $2.9 million fund balance. Going back up another line, third line from the bottom, the total liabilities. You can see that in 2020, we had $40 million worth of liabilities that's decreased by about half to 22 million due to the release of debt in the chapter 11. And then we're projecting that to decrease even more next year. Going, kind of going backwards here, but then looking at the top hand top line, which is our cash, we started 2020 or we ended 2020 with about $6 million in cash. We're projecting to end this year in $2.8 million. A good portion of that increase from last year is a combination of our chapter 11 costs as well as our cash decline due to the lower volumes that we've experienced this year. And then next year in 22, we're projecting that pretty much to say the same, which you'll see that our 7.8% NPR increase is not gonna change our cash levels from what they are now. We'll talk about that in a minute. Okay. So this slide is on our cash flow trending over the last few years. This is not your typical cash flow statement, but rather uses the EBITDA approach of, which I'm sure most of you are familiar with, but takes the operating margin in each of those years and adds back depreciation, amortization, and interest in order to get to EBITDA. And then from there removes our principal debt payments, any pension funding that's required and any capital purchases. So then looking at the bottom line, which shows the overall cash flow impact, you can see that in from fiscal year 19 to 21, we had negative cash flows each year, improving over the other, but we're projecting our cash flow would have a $1.8 million negative impact to cash this year. Looking at the last three columns of this slide, focuses on the 22 budget and what the cash flow would look like if there was no NPR increase, if there was a 3.5% NPR increase, which is that second to last column. And then what cash would look like with the 7.8% net patient revenue increase, which is what our request is. And so looking at the middle line where it says the operating margin of the $1.9 million that we talked about, which is the 3.4% operating margin, that brings us down to a positive EBITDA or EBITDA, whatever you wanna say, of 3.2 million, which is that kind of like first blue line that you see with dollar amounts. So we have a positive EBITDA, but then when we're removing our principal debt payments, pension payments, and then much needed capital purchases that basically stabilizes our cash and helps us from declining, helps our cash from declining, which is what we've been experiencing recently. I think that's it on this slide. So this is a slide. The heading is called charge requests, but it's on the net patient revenue. Increases or decreases over the last few years. It shows what our history has been of what was approved. Basically year 19, we actually had two charge increases approved, one at the beginning of the year, one in the middle of the year. That resulted in an NPR overall increase of 1.9%. Basically year 20, we actually had a budget to budget, net patient revenue decrease of 19%. Last year we received a 3.5% NPR increase. We had requested, I think it was a 5.3 or 5.4 last year. And then of course, this year we're requesting the 7.8% net patient revenue increase, which again, the rate increase is gonna help us to stabilize our cash and to stop the decline in the cash that we've been experiencing. The 7.8% increase, as Bob mentioned, is also gonna allow us to fund our high priority capital needs, which Bob will talk about later on in the presentation, but we haven't been able to fund any capital over the last couple of years. And then it's also gonna help us to provide some cash funding into our frozen defined benefit plan, which has been frozen since 2006. This is a slide continuing to talk about NPR rate requests. This slide basically puts into perspective that if we had a 3.5% NPR increase each year from fiscal year 19, what our fiscal year 22 requests would be if we had a 3.5% increase each year, and it would be $67 million when our actual request this year is $54.5 million. So that's a $12.5 million difference in where we would be if we did have a 3.5% increase in each of those last three or four years. Continuing to talk about our NPR rate increases and what that does to our cash. This is kind of a repeat of the previous slide that we just talked about with the cash flow trending. This slide emphasizes that the 7.8% is really critical to sustain our operations because as it illustrates in the last column and what I talked about in the previous slide is that it's just allowing us to stabilize our cash and stop the decline. I do hear some background noise. If I could just ask anyone who is not speaking to mute their screen, it would be great. Thank you. Thanks, Kevin. And the first two columns, the first column shows what our cash would look like with no increase and then the second column with a 3.5% increase which are showing to be negative cash flows with a 3.5% increase. If you look at the EBITDA line of one, basically one million, it says 1066, it's positive but it's not even enough to cover our principal debt payments and wouldn't allow us to fund much needed capital as well as fund our pension plan. So going on to the next slide on other operating revenue and non-operating revenue. We're talking about the major components of what makes up those areas in other operating revenue. The biggest item is our adult day program which we're budgeting to be fully operational next year. Our adult day program was closed post COVID and was closed for most of this year and just opened up back again at the beginning of July. So we're budgeting that to be fully operational. We're also budgeting over 800,000 for our shared services agreement with Springfield Medical Care Systems which Bob talked about. We continue to share overhead with the FQHC. And then lastly, for other operating revenue we are hoping that we'll get some COVID grant funding whether it be state or some other kind of funding to offset some of our COVID related costs that obviously we're still experiencing. We're budgeting to have over $500,000 in actual COVID costs which is a combination of supplies and testing. So we're hoping that there'll be some grant funding out there to offset some of that cost. Fiscal year 21 revenue not budgeted in fiscal year 22. We had, while our inpatient psych unit was operating as a COVID unit for the first six months of this year we got state grant funding to cover the cost of operating that unit. We're not budgeting that for next year. We also received some state grant money this year to support our adult day service while that was closed. That was to cover the fixed costs of the facility. We're not budgeting that next year. And then we also got some state grant money to support our pulling the vaccine clinics. So none of that we're budgeting next year. And then non-operating revenue, obviously we're not budgeting to have another gain from chapter 11. That was obviously a one-time thing. So that's not being budgeted for next year. And then we are budgeting to have a $750,000 pension plan expense for next year, which is consistent with this year. I should say not this year, but last year. So moving on to operating expenses. Just focusing on the bottom line, looking at the far right-hand column, which is the 22 budget. We're budgeting to have a $55 million operating budget. That's a $3.3 million increase from the 21 budget, which is 6.5%, but compared to where we're projecting to be this year, that's only a $1.5 million increase or which is equals a 2.7% increase. And then looking at the first column, you can see our expenses in 2019 were 58 million. So our expenses have dropped over the last few years. We've removed costs out of our system by over $3 million over that period. This slide is kind of just a summary of what I just talked about. The operating expense budget comparisons. I just say again, we're budgeting $55 million operating budget compared to the fiscal year 21. That's an increase of 3.3 million. And then the main reasons for our increases, primarily staffing is the big one. And then going up to the bottom line, COVID-19 costs, we had not budgeted for those in fiscal year 21, but those are pretty significant that we actually realized. So we are budgeting for those this year. And as I mentioned, those are about a half a million dollars. And then compared to the fiscal year 19, the pre-COVID period, our expenses have dropped over $3 million. Continuing to talk about operating expenses, our labor costs represent about 62% of our operating budget. We are budgeting for a 2% COLA increase this year. Over the last couple of years, last year, we did a 2% COLA in December. The year before that, we weren't able to do so while in chapter 11. And then in fiscal year 19, we had to stop during the year because of our chapter 11 status and not being able to afford it. We did have, like the other hospitals, have had significant traveler costs in fiscal year 21. July year to date, we are over budget and traveler costs by $1.2 million. So while we didn't budget much for that in fiscal year 21, we are budgeting for that in fiscal year 22, although at a lower cost or at a lower expense than what we've experienced this year. We're also budgeting to reinstate our 401k match to employees, which we haven't been able to do since the beginning of 2020. We're hoping that's gonna help with the workforce challenges and helping to attract employees to our system. And then looking at the operating and total margin, obviously this ties back to the income statement that we looked at previously. Notice reiterating our operating margin that we're budgeting for is the $1.9 million, which is a 3.4% operating margin. That's after experiencing significant losses the last few years. And then our total margin is a little bit less, $1.2 million and that's because of the estimated impact of our frozen defined benefit plan. And Bob, I'm gonna turn it back to you. Thank you, Kata, for that. That was a very, very thorough job. Thank you. Just kind of setting the stage on fiscal year 22, looking at our risk and opportunities for the hospital. Again, we still have lots of unknown issues around what will the future and continued impacts of COVID be on the hospital in terms of operating costs, impacts on reducing revenue and increased cost around staffing and travelers and premium pay and those type of things. So, but again, I would have to say our biggest risk of the year is our first one. It's our continued declining cash reserves. And so that's certainly an area that we would like to address here with this budget submission. Workforce volatility continues to be an issue. I do believe we're making some progress now. As Kata mentioned, we had over a million dollars of additional cost in travelers last year and we are managing those down now. And so now I believe right now, today, I think that we have three travelers in the whole building working for us right now. And some of those travelers have been replaced by our successful recruitment of international staff. We have five international staff working for us right now. And four more that we've contracted for that we were expecting to join us. They have not been able to come due to, due to COVID, but as soon as we can get them released, we will continue to drive down our travelers. And we're doing that by bringing in international staff to supplement our own staff. Utilization continues to be a challenge in a world that is still mostly fee for service, improvements, inefficiencies and population health are reducing utilization. Uncertainty over federal and state healthcare reform initiatives, competition in the delivery system. And again, recently in the last quarter, I think our hospital as well as other hospitals have seen an increase in inflation due, from the general economy overall. So I think those are our risk upcoming for the year. On the other hand, I think it's balanced by the number of opportunities. Swing bed utilization is certainly an area that we're budgeting an increase for in the year. I think a reoccurring theme that I hear all over the state is a shortage of post-acute beds. And we can, we believe that we can increase our swing bed census in that area and also help our colleague hospitals with some of their discharge planning difficulties. We will, we are planning on running the inpatient psychiatry unit as close to full as we can during the year. And again, we have people waiting in every hospital emergency room in the state for scarce psychiatric beds. And so we're expecting to run that unit as full as we can this year. Adult daycare is back online now. We view that as a area to reduce skill nursing and nursing center patients. So maybe some patients could continue to live independently if they take advantage of our adult daycare services as compared to being in a nursing facility. General surgery, we have gone the last couple of years with only one general surgeon and supplementing one call for that doctor with Locom's coverage. We are recruiting a second general surgeon this year and we have that budget did sometime around mid-year. Do not have the person identified and contracted with yet but we're optimistic that we can implement that around mid-year. Our emergency department volume is continuing to grow towards returning to normal. Again, we're at 30.66 year to date in 21 and we're budgeting 31.5 in fiscal 22. We're at 38 visits per day, month to date in August. So again, I mentioned earlier that our return to volume has been a little slower than some of our colleagues in the state but we are now seeing that pick back up in the emergency department for sure. We are looking, doing a feasibility study right now on a pain management program. There's not one in Springfield and we believe that a number of our patients would benefit from that but we're looking at the financial feasibility and how we would organize and deliver that service right now. Next opportunity is around our community needs, health needs assessment. We are beginning the process to do that for the year so we'll commence that process in September and we're looking forward to getting updated results on what are the healthcare needs of the greater Springfield area and comparing that to the services that we offer to make sure that we are meeting the needs of our community and fulfilling our mission here and out of that community health needs assessment we will also do a new strategic plan in fiscal 22 which will be our initiatives in programmatic areas that will address the community, the opportunities from the community health needs assessment. Talked a little bit earlier about affiliations. I mean, affiliations are very important in America right now and our changing healthcare market affiliations are a pretty important thing that's going on and I anticipate that we will re-engage in discussions about those. We remain open to any partnerships that improve quality, reduce cost and guarantee access to healthcare in the Springfield area. And our final opportunity I think is around our revenue cycle function. We have a hospital improvement program going on now focusing around our business office and how we build and collect and we think that will be an opportunity for us as well in the upcoming year. Next slide, please. Specifically addressing our participation in value-based care. Springfield Hospital does fully participate in one care. In the last fiscal year we were in the program for Medicaid and Blue Cross and we're gonna continue that. We signed the contracts this week with one care. We will continue in fiscal 22 to participate in the Medicare in the Blue Cross ACO as a result of those agreements. We are, again, I wanna point out that we are a critical access hospital and that gives us a little different impact on our Medicare funding as a result of that. Next slide, please. Kate mentioned earlier in the cash portion of the budget our capital needs during the pandemic in Chapter 11 we have not been able to fund any significant capital investment in the hospital. And so the last couple of years a lot of things have gone wanting. We have submitted a preliminary capital budget of $1.4 million, which addresses a number of priority areas for us. Replacement equipment in lab in the imaging department, equipment in surgery, and in our central plant HVAC equipment to keep our air conditioning up to date and as energy efficient as possible. Next slide. Again, re-emphasizing the impact that COVID has had on the hospital. Again, it's had a significant impact on our volume across the board. And when the budget was done last year a, you know, a budgeted, the volume was budgeted to increase. And again, it in that volume did not pan out due to the continuation of the pandemic. Cash flow has been challenged and a challenge for us the last couple of years. Again, we have lots of stress on our clinical workforce as I'm sure you've probably heard from many of our colleague hospitals around the state. Not only is it challenging to recruit staff for our hospitals, but if when we do recruit staff we have some other challenges around housing, affordable housing in our area is a challenge. And I think it's a challenge across the state. So that is a barrier to recruiting people particularly when they come from out of the area. I have experienced that myself in my own difficulties with access to housing since I've moved here. Work for shortage and increased travel costs. Those have had a big impact on us during the COVID challenge. I think we're starting to come out of those now where I'm optimistic about those supply chain challenges. And again, now I think that we should also mention inflation around the supply chain area which we're starting to see now. And of course, overall increased cost and volatility when we reduce elective procedures in the hospital that really affects a lot of revenue in the hospital. So we have increased cost around staffing, staffing and PPE and supplies, but yet we have higher margin elective procedures being deferred. And again, I will mention again, we did give over 16,000 COVID vaccination doses here. So we're pretty proud of our vaccination clinic. It did take our adult daycare offline while we did it because that was the location we used. Next slide, please. Wait, I missed, hold on one sec. Here, I missed a slide. So our concluding comments, again, we are requesting in that patient revenue increase of 7.8% and we recognize how that compares to our colleague hospitals in the state. This is justified based on the needs to continue our overall hospital recovery and to support sustainable operations in the year going forward. The 7.8% will allow us to sustain operations that allow us to complete our needs of survey, look at programmatic and initiatives that will strengthen the hospital on a long-term basis and do the things we need to do to put the hospital in a position to be stable long-term and available for the community. So in concluding, we need to continue our recovery to support sustainable operations, to continue to provide essential hospital services. Again, more than 30 people a day seek care in our emergency room. Those services were not available. Then there would be geographic barriers, particularly during the wintertime due to the geography of our area, the economic stability for our community and for our region. And then we do need to do some capital funding to keep our hospital, physical plan up to date and our equipment up to date and to fund our frozen defined benefit plan. Without this increase, FY22 will be a year where we will continue to face financial challenges. Next slide, please. So the sustainability and success of the hospital is essential to the health and welfare of the community. And to achieve our ongoing success, we respectfully request our rate increase. So that concludes our presentation. Super, thank you, Bob. Thank you, Kada. And we're gonna start the board questions first with board member, Yusuf or Maureen. Thank you. And first of all, I wanna start out that I really appreciate all your efforts that you're doing during the pandemic and working your way out of chapter 11. I appreciate you have new team members and obviously you're doing a lot of hard work and you put a lot of hard work into this presentation. But I gotta tell you, I am extremely concerned of your ability to meet the forecast that you have put together here. I'm not concerned so much about your rate increase, the 8%, I'm gonna put that aside for a second. I do not see way for you to get the 7.8% NPR that you're requesting. Part of the historical issue with Springfield has been aspirational top line forecasting and then inability to cut expenses to meet the revenue. And this has created significant losses. And I don't see a way that this isn't gonna happen again. And I wanna, I've got to walk through a lot of the financial statements and a lot of the slides but starting first with page 17. I just wanna ground things a little bit into, what was approved and what happened. So on page 17, which is how you were working off your three and a half percent increases. And I don't know if you can put this slide up for other people, I have it in front of me. You absolutely started with a $60.5 million approved budget, but you came in at $47.4 million at that time. And so when we're talking about aligning back to a base and where we're telling everybody, start from 2019 as a base, it's certainly not at an approved level. It's at what did you achieve in 2019? So I wanna just try to level set some things. And I do appreciate, we have new people, I appreciate, I know you're trying, I'm just saying. So even right there, if you take the 47.4 and that disparity, you can see the 60.5 versus the 47.4 are a huge myth, right? So then if you carry that forward by your three and a half, three and a half, three and a half, you'd be at 52.5 million. So that's just one data point because I don't want it to look like you're 12 and a half million decrease to the request. You're absolutely not, you're two and a half million over. So when we're talking level setting, it has nothing to do with the forecast that was totally missed in 2019. It has to do with where you ended up. So that's just to kind of start there. The next piece when you talk about trying to get a 7.8% increase, that alone doesn't sound too bad, except it's a 21% increase off your current projection. The highest by far of any hospital request this year, even with other hospitals requesting large commercial rate increases. So UVM requested an 8% increase similar to what you are requesting. And they're up 15.7% to their projection with population adjustments and various other things. So I'm just trying to benchmark because it's, you can put out a 7.8% increase. We could approve a 7.8% increase. That doesn't mean you're gonna hit. The next page I wanna go to is page, is the commercial rate increase because I think that's where you have on page 13, the largest issue in reconciliation or I have a really hard time reconciling this number. I don't start at a gross payment. Because that's not where a commercial or Medicaid or Medicare is gonna start, right? We can say we charge $100 gross, but if our deductions are 50 and commercial pays 50, then any increase is not off the gross. It's gonna be, or an 8% increase on commercial is gonna be off the rate that they pay. They don't really care where you started from. So just from that, you have a $45 million forecast currently in 21. 29 million of that is commercial. That's your net commercial that you're expecting right now. 8% of that is $2.3 million. You clearly say Medicare and Medicaid does not participate in the rate increase and I totally agree with that. You may get some payment increases for Medicare. So I really am having a hard time and we'll need to have support either an answer after to this question on how you get $6.1 million on a rate increase. I mean, even if you take your whole net this year, it's $45 million, right? That you'd need over a 10% increase, about a 15% increase on that to get $6.1 million. So I guess that's really the first question and it might need a follow-up, but if you're, again, we're only approving potentially an 8% increase on commercial and if we do that, show me the map of how that can possibly yield $6.1 million. I don't think it can. So I'm gonna ask Mike Donahue. Would you mind speaking to this? Yes. My background's been reimbursement and this budget is a standard approach to projecting a budget. Our commercial account will be subject to scrutiny of course. And the fact is that we are planning to open. If we get the approval, we are planning to open negotiations with our commercial payers and insist on demand and increase in reimbursement from them due to the fact that over the past several years, we've suffered greatly in terms of reimbursement from them. And I may not be able to explain it clearly to you, but I don't recall in the past, since 2019 when I've been advising the hospital any negotiations with even Woodcroft in terms of attaining better, more improved reimbursement. So our goal is to first seek approval from you and then to go and reopen negotiations for that commercial then payers. And I want to be really clear. Yeah, I want you guys to be successful. So I'm not trying to be this difficult, but this is where it got us in trouble before. And again, you'll really have to show, I'm not even pushing back right now on the 8%. Say you get the 8% increase, your commercial revenue is $29 million. So to get $6 million off of 29 million is not an 8% increase. That's significantly higher than that, right? That's a 20% increase. That we're not approving a 20% increase. So that's not gonna be possible. It's gonna go, well, it would be pretty miraculous if you could turn an 8% charge rate request on a $29 million base into $6 million. And so I really, we're gonna need to get back on that. Because again, should we then just reduce that $4 million from your top line, then we'll start looking at the expenses that would need to cut in order to have you have a bottom line operating problem. So again, I'm not trying to, you guys have been through this before, maybe not this team, but we've been through it before. And shame on us for $60 million in 2019. And I know I pushed back on that one saying it was too high as well. But, and again, I'm also trying to align you with all the other hospitals. You're at a 21% increase with other hospitals having similar numbers year over year. So it just doesn't tie together. I understand exactly what you're saying. And I dream with the idea that we may not make it in terms of being able to meet every goal that we have. But the opportunity for the hospital is that we have a need, a cash flow need to be able to project significant cash. Coming out of the last couple of years to be able to sustain operation. If we don't meet our goals, then we won't be able to meet our cash flow goals either. Absolutely. If we requested a 7.8% MPF, or we requested something less, it would be even worse. It wouldn't be better, it would be worse. If we came in with a 20% increase, we would be locked out of the meeting. So this one is based on our actual costs projected and increasing volumes in the psychiatric unit and in the acute unit to be able to achieve those goals. You actually are asking for a 20% increase over your budget. And again, it's at the end of the day, if we do nothing, if we do nothing as agreed amount of care board and say you can have this forecast, you go ahead, go for your 7% increase. It's not seven, it's 20, it won't happen. And you'll be in far worse shape. It'll be what's happened in the past. I mean, I don't think we're gonna be able to answer this you're gonna have to follow up because you're not supporting how you're gonna get there. And that would be the second part of this, would be really to bridge, you guys have bridged your increase over your budget. Well, your budget is obsolete and your budget is down from what was a budget of 50 million to 45 million. So you need to bridge the $45 million NPR that you have this year to the $55 million that you have for next year, a 21% increase, clearly laying out where you're getting a 6.1 million rate on an 8% increase on half of the volume, right? That's $2 million. So there's $4 million right there. I can't see, and I'm gonna say has to come off just by math. And then additionally, where you'll be, you know, where you will end up. Because the other side is we appreciate that. I'm sorry. I'm sorry. Yeah, two people speaking at once. Go ahead, Maureen. Well, their expenses will have to come down to align with what's really going to happen on the top line where you will lose a lot of money and will be, and you won't be successful. Again, I'm doing this to try to say, someone got to convince me and maybe the other board members will feel the same way on what, you know, this, this forecast. Maureen, we appreciate your comments and we want to work with the Green Mountains to avoid on this. And if we need to submit additional documentation, we hoping to have a new work with us. We appreciate that. Thank you. Okay, Maureen, could I interject for a second? Sure. I think, Mike, what we really need to see is some type of statement that shows how you arrive at $6.1 million from the change in charges, because Maureen's right. I mean, you're talking about even with some improved, you know, efforts on your operations as far as bringing in additional revenue, you're only talking about $2.5 million with an 8% increase. And so I think that we're struggling and you can see that struggle in Maureen's question. So if you could, you know, give us some type of projection that actually shows how you're ever possibly going to get to that $6.1 million, it would be very helpful. Yes, we will go back and sharpen up pencils and provide you with the schedule and work paper to show you that. And for instance, this chart, we need to do off of your current forecast. And when you would do that off of your current forecast, which is $45 million, it's a $10 million increase. The bad debt and charity care wouldn't be in that reconciliation, because that improvement was from your budget this year to your forecast this year, your forecast this year to next year, that goes away. So you would have to, so utilization is up as well as rate and it's just not supported in my mind. Again, I'm not right now even touching the rate. I'm saying, assuming you get the 8% rate, but I do not see, and I'm not saying we're going to prove that, but I'm just saying I'm taking that out of the equation. I do not. You know, I just think by what you're not going to get there. So then moving to page 12, which is the income statement. And, you know, this is a little bit more challenging because of course we've had COVID. So I, you know, I totally understand that. But what we are seeing once again is the decline in revenue, the $5 million decline in revenue with a $2 million increase in operating expenses, which then becomes $2 million more increase in operating expenses in your 22 budget. So, you know, that's, I don't think that's going to be supported if you can't get the revenue that you're asking for. And again, you can ask for revenue, but you need the patients to come in the door. So just because we approve it doesn't mean it will happen. And that's what has happened in the past. We've approved numbers that you haven't achieved. So what areas would you be able to cut? I'm looking at management contract services that was up significantly from budget to projection. And then that holds and then salaries and wages because assuming you're going to need to cut, you know, $4 million or more out of your operating expenses in order to meet your cash flow needs. Would you be able to identify areas you'd be able to cut? So just to point out on the management and contracted services. That is up this year compared to what we budgeted because our hospitalist program was previously staffed by our own employees and that we changed that at the beginning of this year. So that's a contracted service that's ending up when the hospitalist providers were under our employment, that line item was under physician fees now being, and that's where they were budgeted. Now this year after we changed over to having that as a contracted service, that line is showing up or that expense is showing up under management and contracted services. So just wanted to point out why it looks like that is up. The physician fees are down as a result. And just as a reminder, we have, we've worked really hard over the last couple of years to decrease our expenses. As I mentioned, expenses are down at the end of this year, $5 million from where they were two years ago. And next year, you know, that's projecting to increase from where we're ending up this year. But we have a lot of costs that we didn't have before. We have COVID, COVID related costs and those are expensive travelers, which we did not anticipate. Like I said, there were a million dollars over budget this year. So internally, it's going to be difficult to, when we've already worked so hard to reduce our expenses to, you know, to define areas to do that even more. And to point out on the net patient service revenue of $45 million this year, compared to our budget of next year, we also have to remember that the first six months of this year, we had no revenue for our inpatient psych unit because that was a COVID unit. There's no revenue for that in the first six months of this year because that was funded by state grant money, which is showing up on the other operating revenue line. So next year, one of the reasons why net patient revenue, one of the components of that is that our inpatient psych unit is fully operational for next year and at close to full capacity. So I just wanted to put that out. What's that? How many dollars is that worth? Shoot, I don't have that off the top of my head. I'd have to get back to you on that. And then two years ago, you lost $9 million. So that's why you needed to cut all those expenses. And it's, you know, it's not enough to support what you're going to need for 22 in my mind. So I mean, I mean, I have other questions on the basis, but I'm going to, you know, let other board members discuss this. And, you know, I, you know, we're really going to need some reconciliation, at least from my mind to support that increase in your NPR requested. And again, it's because I just want to be really clear from my point of view, it's because I don't want you to end up in the same situation. This is an aspirational budget from what I'm looking at. You're not going to make it. It's going to come in debt lower on net patient revenue. Your expenses will be equal or higher and you're going to lose more money and you're not going to have cash. So it's pretty dire in my mind. And it has nothing to do with whether we approve what you're doing, but whether we approve or not is not going to have any implication on what actually happens. So I'm all set. Kevin, I just will need some follow-ups. Thank you, Marie. Next we'll go to board member Holmes. Jessica. Yeah, hi. Thank you very much for the presentation. I know it's been a tough year or two for all hospitals, but especially for Springfield. I do appreciate all the cost initiatives you've undertaken. I appreciate the work coming out of bankruptcy that must have entailed as well as the efforts to deal with the pandemic. So it's quite a year. Quite a year to come to Vermont. Welcome. I hope you found housing. Yes, thank you. Good to know. I hate to think you were like living in your office or something like that. So, you know, I'm not going to, I'll just say that I share Maureen's concerns about hitting your NPR target. If you don't make it, obviously it'll be another loss since your expenses are aligned with that aspirational top line, at least as I see it. And I hear the concern in Maureen's voice as well. So I'll look for that follow-up. I'm not going to go down that line too far. But let me ask you a related question about what's happening and what's driving some of what's. Rural bypass is a common contributor to rural hospital kind of insolvency. And as you know, this is when residents drive by their local hospital and seek care elsewhere. You've got five hospitals within an hour of your community. So is this something that you track where your residents are going? Could this be a growing factor in your declining utilization and financial distress? Tracking your HSA, where the residents in your community are going for care? And has that changed in the last two or three years? Well, we have started looking at our patient out migration. The numbers that I have seen, although I haven't had the time to spend with that, that perhaps I would have liked. The numbers I've seen so far, those numbers don't appear to have changed very much the last couple of years. But I haven't had time to really analyze those in more detail. It is true that we are sending a lot of tertiary patients to higher level of care. And so that those are things that we don't have the capabilities for to take care of here in Springfield. But there are also things that we can take care of. So one of the things we need to do is to win the confidence of the community back after the struggles that the hospital has. And that is part of our strategy for FY22 to reengage the community and to line up the services that we have available with what is needed and to win the confidence of the community back. Well, let me ask you a related question. Since utilization has fallen for maybe a host of reasons, how do you ensure that you now have enough volume to ensure that you can ensure quality, particularly in areas with general surgery and joint replacement and things like that where there is a volume quality relationship? Your utilization is falling. Utilization was low in those areas to begin with. How do you ensure quality? Well, we continually, our medical staff continually monitoring the outcomes on the surgical outcomes and the procedural outcomes. And I understand that there's always going to be a relationship between volume and competency. But we don't feel we're, we don't, from what I can tell, four months into my journey here, I don't see that we have an issue with that. So, you know, your rate request, your NPR request of 7.8%, it really is driven by the rate request, right? The 8.3% change in charge request since we know that utilization is actually falling. And it is worrisome. I'm not going to again echo all of Maureen's concerns, but this isn't even going to improve your cash position. You're still going to be at 20, 22 days cash on hand with an 8.3% rate increase if that's given to you. So, I have to be a little blunt as well. I mean, this is a really high rate request. We look at Springfield's rate requests the past few years. You've been above the state median, yet you're still generating losses. Relying on increases in commercial rate, as Maureen pointed out, does not seem to be, you know, kind of a strategy here. It's not going to generate the kinds of revenue that are likely to get you back in, you know, good financial standing. So, I guess my tough question to you here is, at what point does Springfield have to reimagine its service lines, its underlying cost structure, and really think about what is the appropriate size of Springfield Hospital? I mean, is it possible that your fixed costs, as they currently stand, simply really can't be met by the declining patient demand, whether that's because of rural bypass or population decline, or your proximity to five other hospitals? But at some point, when do you start to think about the service line offerings and the fixed costs and reimagine that? Well, I think that's a process that I have to engage in with my team now that I've arrived in looking at those, you know, in the year going forward, our community needs assessment will be part of that. It'll be looking at what services are needed in the community and then compare those to what we are offering and can we offer the services that we're offering with a sustainable margin? I think that's part of a process that our team has to go through that I have to lead as the new person here. Yeah, and I recognize you're new and you've inherited what, you know, the service line mix that's there. But I hope that that service line optimization analysis incorporates, you know, what's down the road being offered at a Scutney and what's, you know, around the corner at Dartmouth-Hitchcock and Brattleboro and Grace and Rutland. I mean, so to the degree that we're really thinking about a rational healthcare delivery system and making sure that we don't duplicate services and have high fixed costs associated with all of these, you know, specialties and service lines, I think that's part of hopefully what some of those potential affiliation talks that you're, you know, thinking about as an opportunity. I could imagine if there's some affiliation and there'll be some shared services and some reduction in some of that overhead, which might be the better avenue, I think, for Springfield Hospital than continually trying to increase it through commercial rate because I just don't, I don't see it either. My last point is really, and I've been making this with all the other hospitals, so in fairness, it's about this Mathematica study and, you know, the potentially avoidable utilization that they've done an analysis of at rural hospitals and they shared some of those results a few weeks ago. Again, these results are only for fee-for-service, but almost a third of Springfield's inpatient needy volume is potentially avoidable according to their analysis. And again, that's higher than the state median. So I'm wondering if these numbers are surprising to you. Do you track this yourself and what can the hospital do to bring down some of this potentially avoidable utilization, particularly since it's relatively high compared to other hospitals in the state? Well, again, with me being new, I didn't have, when I saw the data, I didn't have an assumption around what it would be. So it was new to me. I think, from my perspective, I'm going to have to look at the data and understand where it comes from and what time periods it includes. I can tell you, we're making a lot of efforts around looking at how we operate the hospital and some of the things we are looking at as part of our revenue cycle is our throughput and our case management and care management functions. So we have initiatives that we're working on around a lot of those areas now. We've recently received a grant to put a social worker in our emergency room. And so I think that that's going to also give us a little more, you know, ability to focus on some of that. But I think, from my standpoint, I have seen the data, but I need to understand it better before I have a conclusion regarding it. Is that something that you're going to start to track then within the hospital, tracking that potentially avoidable utilization? Well, absolutely. I think that is a key metric. Every hospital has a set of metrics that are critical to the hospital being successful. So from looking at these numbers, it appears that should be one we should be focusing on and analyzing and managing. Great. All right. Well, thank you so much. I appreciate it. And again, I know it's been a tough welcome to Vermont, but I hope, you know, you're enjoying your stay so far. I am enjoying being here. Everyone has been very welcoming to me since I've arrived. So thank you. Well, good. And actually fall foliage is beautiful. So you're about to see one of the, you know, most amazing parts of our, you know, climate up here in Vermont. So I hope you enjoy that. Okay. Thank you. Thank you, Jess. Next, we'll turn to board member launch Robin. Thank you. Yes, I want to welcome everyone else's. I wanted to echo everyone else's welcome to you, Bob. And I recognize really the challenge that you and your team have taken on in terms of trying to ensure Springfield sustainability. I don't have it. One of the benefits of being kind of towards the end is a lot of my questions have been answered. So I just had a couple. In terms of your, I know your PPP loan wasn't successful because of the chapter 11 bankruptcy. I wonder if you could just give us a sense of, if you have a sense of how long those appeals generally take. And if you were successful, kind of the level of magnitude that you'd be requesting. Okay. Well, yes, we have appealed that ruling with the SBA. And I do not, as far as I know right now, we don't have a firm coordinate, but we're expecting it to be in the fall. So I'm thinking like October or November. And I'll have to defer to Cata on the amount. Our original loan request was $3 million. Great. And do you, and you may not know the answer to this, which is obviously fine. So if you were able to put in your loan request, would that also allow you to put in for the second round or at this point it's really, that's just too late? That is a good question. I do not know the answer to that. Okay. Just curious. I know that being deferred on round one stopped us. It made us ineligible for round two. So I'm not sure if we'll be able to file that retroactively or not. Yeah. Yeah. Thank you. And then really my only other, it's really a suggestion in terms of follow-up. And I know our staff will work with you on this, but I think to more, to some of Maureen's and Jess's questions, I think having the dollars with the parts of your revenue increase that is related to the inpatient psych or the adult day, having an understanding of those dollars in terms of how that fits into the whole would be helpful for me as well. And I look forward to additional information on the charge request. And that's all I had. Thank you so much. Thank you, Rob. And next we're going to turn to Board Member Pelham. Tom. Well, thank you for your presentation. And my wish for you is that in two or three years from now, you can look back on this day as not the best day, but that in the day two or three years from now, you will have succeeded and can enjoy that accomplishment. I kind of want to, I definitely echo and will echo Maureen and Jess's insights. The best way that I looked at it was on the reconciliation, which is attachment one to the financials. And we don't, you don't have to go there, but to me it tells the story that has been told already this morning that looking at the 45 million 2021 projection to the 54.6 million 2022 requested budget. That is a 9.4 million dollar increase with 8.5 of it coming from Medicare. So, and that 8.5 million dollars is a 77% increase over the projected 2020, the projected 2021 Medicare NPR. And that just seems like a huge leap to me. And so, but, but trying to kind of walk it back of that 8.5 million dollar increase, 6.7 of it is in utilization. And so, and maybe this is tracking on what Robin just said, but to be able to track that increase in utilization back to where your utilization appears to be increasing 22 budget over 22 projected, you know, in terms of a swing administration, swing day psychiatric administration go, go back to, I think slide, slide 11, you don't have to go there now, but go back to those increases in utilization that profile, which are huge to some extent, and, and tie them to this where it makes sense to this medic recommended Medicare increase. You know, I look at this 77% increase amount in Medicare, you know, 20, 22 budget over 2021 projection and it just, it's just hard to wrap, wrap my arms around it. So, for me, the best, the best format to make the case or to profile the moving parts here in a clear way is using table three and appendix one, which is the crosswalk from 21 projected, 21 projected to 22 proposed budget. I mean, the Marine raised the issues having some issues having to do with commercial, but the net, the net commercial is only $74,000. It's the Medicare column where most of this, this, this anticipated maybe aspirational revenue is coming from. Other than that, I, we don't need to talk about that because it's just, you know, I forget, I forget about the slogan might be beating a dead horse or something, but I just, to me, if you sit there and look at that table three in reckon, appendix one, it becomes very clear, the very, very steep slope. It's just hard to get one's arms around. And if we could walk that back to your utilization projected increases, that would be helpful. I do have a couple of other questions. I just want to be clear in attachment seven, where it, we're on attachment seven. You are still carrying as a liability at the end of this year. The Vermont FY 20 COVID loan at $1.3 million. But I think in the narrative, you've said that that as part of the bank ripsy settlements that that, that has been forgiven. I just want to make sure that is the case. So, yeah, to answer your question at the end of fiscal year 20, we had the $1.3 million as a liability on our books. We no longer have that liability per se because of the chapter 11 and some of our loans with the state were settled under the chapter 11 and kind of rolled into a new loan amount that's outside of the COVID piece of it. Right. We don't, we don't have a liability right now on our books for that. Good thing. So another question is in the relative to the master shared services agreement. In your presentation today, you said that the FQHC is contributing in revenues to the hospital, 840,000. I'm just wondering what, what, what is the total amount of that agreement? Or what is the total amount of, you know, spending expense across both organizations at play here so I can get some kind of a reference sense of what the $840,000 means. Is that, you know, 20% of the total or is it 50% of the total? And is that related to maybe square footage or some other kind of metric that could make more sense out of, out of that number? And other than that, I'm, I'm, I'm, I'm, I'm trying to work my computer at the same time. I'm, I'm, those are my questions and I really hope that, you know, this conversation kind of, you know, becomes a, you know, a work in progress and that the efforts that you folks are making will, will bear fruit. Thank you. Thank you, Tom. I was going to answer Tom's question about the 840,000 for the master shared services agreement. So that represents staff that's employed by Springfield Hospital. It's that that number is just solely for wages. And what that represents is that we have the expense for those employees that are hospital employees. 100% of that expense is showing up under salaries and wages. And for each of those areas that we have shared services, which are many, many different areas such as accounting, human resources, engineering, materials management, medical records, I'm probably forgetting something, but in each of those areas in our master shared service agreement contract, there is a certain percentage that is applied that is allocated from the hospital to the FQHC. And that's built on a monthly basis. And that is showing up as revenue to offset the cost that's showing up under salaries and wages. And that's part of the reason for the operating expense increase too, is that those employees last year that are shared with the FQHC were FQHC employees in 2020 and transferred over to the hospital at the end of 2020. So that's something I didn't think about before, but that is part of the reason for the increase in the expenses as well because those shared employees are 100% on the hospital's books for salaries and wages where they weren't previously before. And the offset for that is showing up under master shared services revenue, which is under other operating revenue. So is there a simple way on a one pager just to kind of profile the different moving parts in the master shared services agreement, what the dollar value is and what the prorated amounts are to the hospital and what remains with the FQHC? Yep. Okay. That'll help. Thank you. Thank you. Thank you, Tom. Kata, I want to focus for a minute on the Wyndham Center, the psych beds. Can you tell us what percentage of that is commercial patients? Yes. Just a second. Okay. I think I have the number if you can't put your finger on it. Well, if you're cooling blue cross with commercial, whether you are or not, it's about 16%. Without. That agrees with my number. So I just want to give you a chance to flesh out. Someone watching this hearing might think that there's a great opportunity for some addition to your operating margins from being able to run the Wyndham Center at full capacity. And yet when you take a look at it, you book that revenue from the state of Vermont as other revenue. And at the end of the day, how much of a real difference is there in your margin just being contributed from there when I have to assume that because it never operated near capacity for strictly COVID operation that your expenses wouldn't be as high as what they would be this year if you truly are able to capture that full projection. So I'm just curious what the net difference if you look at the state of Vermont revenues under contract paid to you for operating as a COVID site facility versus what you anticipate to operate in 22. What's the net operating difference? Kevin, that's a good question and one that we'd have to, you know, do the math on and get back to you. Okay. I just ask it because I hear some frustration and some of my colleagues on the board because I think that they've probably come to a similar conclusion that I've come to that we really haven't seen a sustainable plan for Springfield success and yet we all want to root for it and we all want to see it happen. And I'm just worried that despite everybody's best wishes and efforts for success that unless there isn't some radical rethinking and strategic planning that we're just not going to get there. And I'll just leave it at that. At this point, I'll turn it over to the healthcare advocates office for questions. Thanks, Chairman. Just wanted to start off by thanking the team at Springfield in particular for your vaccination efforts during the pandemic. It's great to read that in your narrative. My first question pertains to free care and bad debt. We observe that your ratio of free care to bad debt has decreased from 2019 actual to 2021 projected. And we're wondering if you could speak a bit more about the causes of those changes and what happened on the ground. Thanks. Kato, will you take that slide? Or you want me to? I thought you were going to do the two slides that we had on the Okay. Well, thank you. That's a good question. We have seen a decrease in bad debt in free care. One of the things is our robust partnership we have with Valley Health Connections. They assist with getting the uninsured and the underinsured signed up. And so those efforts are succeeding in our marketplace. They've offered multiple special enrollment periods. These were all on our slide on page 32 as well. During the pandemic, a lot of patients have chosen to defer care. And we think that that has led to reductions in our bad debt write-offs for deductibles and co-pays as well. And that we've also engaged a new vendor to help us with our early out collection processes. So I think we've actually improved a little bit of our collections in that area. Again, as I mentioned earlier, I think we have some opportunities around our revenue cycle. And we have a team now working to identify those. Thanks. Just a brief follow-up on that. Do you expect these trends to continue into FY 22 and beyond? I'm not sure that I can project that being so new in the marketplace. I would like to think that they are. Obviously, we have a lot of people that are in the products and have eligibility for the Medicaid expansion in the state. So I would like to think that this is sustainable. But I'm not sure I've been here long enough to answer a valid answer. That's okay. I understand that. And I know, so we submitted a couple of free hearing questions that focus on race equity. I just wanted to give the opportunity right now if you wanted to speak a bit more about your efforts that you do at the hospital. I know Springfield's small, but it's an important area. Obviously, I think for all of Vermont and all of Vermont hospitals. So I just wanted to give you an opportunity to speak more about those efforts. Certainly. Certainly. And it is an opportunity for us. We have an initiative that we were rolling out in the new fiscal year around improving education for our staff. We've committed to a new software program that's going to provide a lot of offerings that we could not produce ourselves locally in-house. And it will also allow us to track those and make sure everybody is able to complete them electronically without being face-to-face education. So our main that achieving that goal is rolled up in that initiative that we're going forward with this year. So we will have those programs. It will be required of all of our employees and it will be produced by a third party. It will be very convenient and easy for our employees to receive that training. That's great to hear. Thanks. Last question. In response to the board's questions, you wrote that it's hard to take on ACO risk and we understand the different payment structures offered by different payers through the ACO. So we're interested in your perspective on how the risk you would take on through fixed perspective payments would compare the risk you take on through fee-for-service. Or you get paid more for doing more, obviously, but there's more unknown in your budget than you would be for FPPs. Thanks. Well, I'll start that question, but my financial colleagues might have to help me. I think that we answered that question the way we did due to the overall financial situation of the hospital. We felt we should just, we wanted to continue with the products we had this year, although we did not feel like we were in a position right now to accept any additional risk until we get the hospital more sustainable. So I'm not sure if Cata has anything else to add to that. I think you're pretty much right on, Bob, that with the position that we're in, we just don't want to take on an increased risk at this time. As we get, as we improve the hospital's financial performance, it's certainly an area that we're willing to look at and evaluate. Thank you. This is my question. Thank you, Chair McMillan. Thank you, Sam. Next, I'm going to open it up for public comment on the Springfield Hospital budget. Is there any member of the public who wishes to offer comment at this time? And I see a hand raised, Tom Huebner. Thank you, Chairman McMillan. My name is Tom Huebner. I am the special advisor to the governor on Springfield Hospital. I have been working with Springfield since December of 2018. I had a few additional comments. The state of Vermont has done everything we could think of to make it possible for Springfield to have a future financially over the course of the last two and a half years. We saw them through bankruptcy and continue to have supported them up to and including some financial support just as past June. Very importantly, through that process, they cost substantially. They looked at every service line to see if it was contributing to overhead margin. It led to the closure of, for example, the OBGYN service line. The service lines that remain open have been contributing to margin and to overhead. So it's very difficult to close for the programs in order to turn around the situation. They cut a lot of overhead costs that's been alluded to already. And very importantly, they maximized reimbursement under current programs, which has not been being done under prior administrations. And that's been part of what's gotten them to where they are today. As part of that effort, we also encourage possibilities of collaboration and merger. And there was a conversation to create a free hospital mini-system in the San Diego River Valley with Dartmouth being the parent organization. Frankly, in March of 2020, we are on the we had a verbal agreement and then COVID happened. And frankly, Dartmouth put that on hold and stepped back for COVID and also to solve some of their own regulatory issues in southern New Hampshire, unrelated to Springfield, but where they felt that it would have an impact. To me, that is still a part of a future that we should be resolving or looking towards and Springfield has added a board member from Dartmouth to their board so that there is an ongoing avenue for communication and going forward. Having said all that, the Mountain Care Board is correct that things are still extremely fragile. My own view is that it is not an expense problem and there is very little additional expense that can be cut. It is a revenue and scale problem. And what my work with Springfield folks has been doing is they are providing to me and to the Agency of Human Services cash flow projections with different volume assumptions and that will allow them to create strategies to make sure they can be achieved. In the end, they have to stabilize those programs as I think Jesse said they have to attract people who are going by their front door or have. And Nate, there is some early evidence in the last few months of that happening. Whether it happens sufficiently or not, frankly, time will tell about it. But it is my view that that is where the focus of their energy needs to be is ensuring that their market share is maximized because that is really the most likely possibility for them to get into a stable situation. Finally, I would add that stability is probably a necessary component of further discussions with outside partners. And then it is much more difficult. So their focus is rightly on stabilizing those programs and making sure that people are not passing them by and seeking services there. And I think that is where the most opportunity lies. I should say, by the way, that there is also a representative from UVM on the board, Dr. Shapiro is sitting on the board as well. Does any board member wish to ask Tom any questions? So Tom, I guess the basic question that I have is, I hear what you are saying, you have to improve market share. And I get that. And the only way that Springfield is successful is if their community supports their hospital. That is the bottom line. If they are bypassing Springfield to go to other hospitals in the region, then it is not going to be a success. And I just wonder at what point, since you are looking at the bigger picture for the state of Vermont, is this just a struggle to increase volumes from a number of smaller hospitals on that Connecticut River Valley, both on the Vermont side and the New Hampshire side? Yeah. And that was what the whole mini project was about. And I think it was really rationalizing that system and concentrating different services in different locations, both on the Vermont and the New Hampshire side, including services that were going to have to be expanded at Dartmouth that maybe could have been provided in those smaller hospitals. So my thinking is still the most rational approach and needs to be encouraged. But they also struggle through COVID and are, they need to, they're not going to exacerbate their own issues if they don't have to. Thanks, Tom. And I see that Patrick has a question for you, Patrick. Actually, my question is for Bob and I believe Mr. Donahue is the new Revenue Cycle Director. So good morning all. It's nice to see you, Mr. Donahue. Thank you for having me. I'm going to make your quanes. As you know, through our meetings the last couple of months with the Board Chair here, I've been asking you a lot about your accounts receivable balances and effective capture of revenue through effective revenue cycle management because we've been watching those balances month over month go up. We've been watching your cash balances month over month come down. So when we combine operational losses and organization killer, even if you are making a profit of a million dollars a month, an inability to capture and bring in that cash to keep cash flow positive and keep operations moving can be a major inhibitor to your success. So I'm hoping you can enlighten for the Board now that you've brought on a revenue cycle director what your strategic plan is to begin to capture more of that revenue so you can eliminate the focus on revenue cycle management and focus on those operational loss components of your organization. Well, I'll go ahead and speak to that. We have added a new revenue cycle person. Mr. Donahue is not in that role. He is with QHR assisting us with our more strategic direction of the hospital, but we have hired a new experienced revenue cycle director who has joined the organization and we have initiated a performance improvement process to look at that aspect of the hospital. And I want to just preface that by saying we have a lot of really good people that work in the revenue cycle function at the hospital. Many of them have been here a long time and have devoted their lives to the hospital. So I know they know what needs to be done, but under new leadership with the process, we are put together a team and that team is looking at all aspects of the revenue cycle starting from when the patient arrives and is admitted to the hospital until the time when we actually file the claim and collect on the account. And so that process is now underway and we're going to look at each aspect of the process established performance metrics and develop action plans. The areas that have opportunities we will develop plans to improve those areas and track the performance in those areas. Thank you for that. Okay, at this point I'm going to open it up for other public comment. Does any member of the public wish to offer public comment on the Springfield hospital budget? Hearing none. I just want to say that we're going to wrap up this hearing, but that will not be the end of the budget proceedings as we're going to hear from both from the healthcare advocate and from the head of VAAS on perspectives overall on the hospital budget process of this year. And so please nobody jump off thinking that the meeting is over. But I do want to thank everyone from Springfield for the hearing this morning and I just want you to know that even though some of the questions may seem to have been harsh, we are rooting for you. So with that I'm going to end the Springfield portion of this hearing and move on to some I guess you might say concluding remarks from both the healthcare advocate and from VAAS. So Jeff, would you like to go first? Sure, Mr. Chair. I'm happy to do that. Thank you for the opportunity. I'm Jeff Thiemann. I'm CEO of the Vermont Association of Hospitals and Health Systems. And first I just want to thank members of the Green Mountain Care Board and the office of the healthcare advocate. As I think I say every year there's there's only a handful of people who get to enjoy the entirety of these hearings and I recognize it's a lot of work for the board for the healthcare advocate as you consider all this complicated information for the hospitals that work so hard to prepare their budgets and make their presentations and then for the people like me who try to listen and process what's happening here and what it means for our healthcare provider community and for our state. At the beginning of this proceeding a couple weeks ago I opened with some comments to say that hospitals are squeezed like never before and the hospitals themselves I think told you this story over and over for the past couple of weeks. They simply have no extra people, no extra time and no extra space. They're treating more patients every day and they're filling their beds and their facilities not just with COVID but also with people who delayed care during the pandemic and those seeking treatment for mental health as well as individuals who are waiting for long-term care placement. All of the patients are presenting sicker and more challenging and creating an unprecedented utilization challenge. Then we have third doses and 60,000 vaccinations for kids coming up so hospitals are once again in that business and they are testing and they're managing the logistics and the issues associated with mandating vaccination for their own steps. So given all of this the Green Mountain Care Board graciously said at the beginning of this process that it would entertain requests from hospitals that did not feel as though they had the bandwidth to participate in a hearing. I think it says a lot that despite being so busy and overwhelmed the hospitals wanted to come tell their story to make sure this board and Vermonters in general know what they're doing and how they're trying to stay strong now and plan for the future. The budgets that have been submitted and that you've reviewed are not overreaching. They represent what is necessary to rebuild, to recruit and to invest in their facilities. These are the budgets Vermont's non-profit hospitals need to serve their patients and be there for their communities. Our hospitals do not answer to shareholders. They're accountable to the people and the places they serve and in that spirit they're requesting budgets that enable them to meet their mission and continue to be leaders in public health during a still critical and really uncertain time. And with so much uncertainty and challenge reducing or changing budgets would be harmful especially at a time when all of us need our health system to be safe and strong and to be able to manage the pandemic while doing the important work to improve access and wait times and to update facilities to meet demand and stay current on technology and equipment. So with that there were just a few things I wanted to comment on briefly that came up during the budget hearings. The first was a couple questions around mental health and what the Green Mountain Care Board can do to help hospitals in this space. To me the best thing the Green Mountain Care Board can do is to make sure that hospitals have the financial wherewithal they need to invest in the facilities the services the people and the surroundings that are needed to compassionately treat people coming to us for mental health care. More concretely and immediately the Green Mountain Care Board could expedite emergency CONs for emergency departments and other enhancements that are needed in the system to relieve pressure. I'm happy to provide additional detail about some of the options that hospitals are looking at and the important conversations taking place there. There were also appropriate questions about expense control and good answers I think from hospitals that are working hard every day to find new ways to limit cost growth. A point that just has to be underlined here is that hospitals do not control inflation and they do not control skyrocketing pharmaceutical costs. They also do not control the unbelievable cost you've heard so much about of travelers who are unfortunately more needed now than ever with the workforce crisis you've heard so much about. Meanwhile, even with all of this going on our hospitals continue working to transition to value-based care and doing so without the significant transformation funding that was promised as part of the all-payer model. And this work also involves managing the administrative complexities of participating in our unique health program health reform program which require a lot of staff time and focus. To be clear about how hospitals have been vocal on this set of issues we testified in the legislature on the need for and importance of transformation dollars 11 times since the end of 2018. We have given that testimony to House Health Care, Senate Health and Welfare, and the Health Reform Oversight Committee. In addition, we have included the plea for the state to fund transformation in our legislative breakfasts and hospital-specific conversations with local delegations. We've also written letters to this board and had numerous conversations with the AHS leadership and our federal partners. So I just want to be very clear that hospitals have raised their voice on transformation funding early and often, and not just on the need for dollars, but also on the complexity and cultural challenge of moving to a new payment model. It also must be said here that despite the lack of these transformation dollars, hospitals continue anyway to invest in reform and take on significant financial risk. You heard Dr. Joe Parris say that it serves on the AHA Rural Health Task Force and that critical access hospitals in other parts of the country have difficulty understanding how such a small organization can do what our hospitals in Vermont are doing. We are leading the way. So as we complete these hospital budget hearings, I ask that you remember the intense voices and testimony you heard over the past couple of weeks. If our hospitals were to experience a new significant COVID surge in the coming days, it will further stress our health and our staffs, and we don't even know what comes after that. So my request today is that as board members, you prioritize public health and access to care during these crucial times, which includes critically, making sure that hospitals have the resources they need to get through the pandemic and to emerge stronger than before. Over the past couple of weeks, you heard about a lot of intractable problems, including the workforce and mental health crises. As a board member, you may feel like these issues are outside your control or your purview, but the first and most important step you can take to address these challenges is to approve hospital budgets that are crucial for the health and well-being of Vermont. Thank you very much. Thank you, Jeff. And please extend our thanks to all your members who did choose to come forward. You know, it was just two weeks ago today that you and I were running like chickens with their heads cut off, trying to figure out how best to proceed with the data that was in front of us on the delta variant. So we're really appreciative that everybody came forward and had that exchange with the board so that we could ask questions and get a better understanding of each of the hospitals. So thank them on our behalf, please. I will do that, Kevin, and thank you for your collaboration on this. It's been really important. Thanks. And with that, I'm going to turn to the health care advocate, Mike Fisher. Good afternoon. You get to have your hospital budget hearings bookmarked by Jeff and I. So thank you to everyone involved in this overall process. I want to just take a few moments to make a few high level points, two points really. First, I want to recognize the good work that many hospitals reported on diversity, equity and inclusion and recognize the substantial work ahead of us on this issue. We would welcome board input and focus on this important work going forward with the goal of developing ways to measure both the efforts and the impacts on the ground. Second, though bad debt and pre-care are a relatively small part of overall hospital budgets, we put a good deal of focus here for some obvious reasons. As has come out a few times during the hearings, this year's hearings, we recognize that medical debt often has a real impact on the decisions Vermont families make when they need care. I think we can all agree that when a Vermonter needs care, we want them to be considering the best clinical advice, not the sometimes inevitable financial impacts. We've been studying this issue lately through our medical debt storytelling project and we will have a lot more to say about the interaction between medical debt and the right care at the right time. We're not interested in driving up uncompensated care. While it's relatively straightforward for us to look at hospital free care policies and compare them to each other, it's very hard for us to have a real understanding of how these policies play out on the ground. That's why we're focused on the overall amount of bad debt and free care at each hospital. I don't know what the right relationship is. Should it be 5 to 1 bad debt to free care or 1 to 1 bad debt to free care or somewhere in between? But my point by giving those numbers is that there's a wide range in the Vermont hospital system. As always we're happy to talk to any hospital executive or anybody from the hospital's system as well as any member of the board about these issues. Nothing is simple about it. We want to reduce medical debt for any reasons. But a primary one is to help people get the right care, get the care they need when they need it. Thank you Vermont hospitals. Thank you Green Mountain Care Board. Thank you Mike. Just as a reminder to everyone the public comment period is open through September 1st and we continue to look forward to a public comment. After September 1st we will still be looking at that public comment to emphasize how helpful it is if we receive it by September 1st as we will begin starting on the 3rd to have discussions and the quicker we have the public comments the quicker we can really make some firm decisions. All decisions will be made by September 15th through the open meeting process so nothing will be discussed outside of that open meeting process. And after all those votes have occurred our legal team will write the written decisions that will be out to the hospitals by October 1st. So with that I want to thank everyone it's been a tough couple of weeks tough couple of weeks overshadowed by what's going on in the world around us not only on the healthcare front as well and we will get through this and come out on the other side hopefully as having learned something collectively. So with that is there a motion to adjourn? So moved. It's been moved and seconded to adjourn. All those in favor please signify by saying aye. Aye. Those opposed signify by saying nay. Thank you everyone have a great rest of the day and enjoy the weekend.