 her and we're going to proceed with the hearing for Rutland Regional Medical Center and I'm going to ask Kim if she could swear in the four witnesses from Rutland Regional. Would you please raise your right hands please? I don't see Mr. Gregory is it? Yeah I don't I don't see Todd either. Oh you can't see my camera? No. There we go. There we go. Popping up. There you go. Not now. Okay that's okay. Do you swear the testimony you are about to give shall be the truth, the whole truth and nothing but the truth so help you God. I do. Okay so Claudia you can proceed in whatever format you wish. Okay thank you very much Mr. Chair. Thank you members of the board. We appreciate the opportunity to come before you and kind of tell you've gotten a lot of our background information, financial information in advance but we always appreciate this opportunity to add a little color commentary and tell the hospital's story over the past year and where we see ourselves going forward. As I said you're going to hear from Judy Fox she's going to lead off and really tell the hospital's financial story over the past year and what we project more importantly where we see ourselves financially over the coming year and according to the budget we submitted. Following that you'll hear from Betsy Asan our chief nursing officer and Dr. Todd Gregory our chief medical officer and the medical director of our emergency department to give you a little bit of a boots on the ground perspective of where we see ourselves on this continuing ongoing war against the COVID-19 pandemic. And I think you will find today the budget we are presenting is a conservative budget. We worked really hard to have one that conforms to the guidelines you administered and perhaps maybe even though it's a little too conservative because of the great uncertainties that we are facing giving these incredible times. I'm sure you've heard from others and you will hear from us a little bit that this is the most uncertain and challenging time that we have experienced in healthcare. In my 30 years in healthcare administration that is true. Now you often hear us that's part of the CEO playbook we talk about all the challenges on uncertainties. But this time is definitely unique and I know you understand that and I will tell you from the hospital perspective we appreciate your understanding and consideration. You have a job to do as a regulator we understand that but we also appreciate you really trying to understand the some of the challenges we're going through in doing that. So let me start off do we have how are we going to do the slides on this. Well generally the hospital themselves runs a slide deck but if you need to we could have Abigail or Patrick or someone from Patrick's team run the slides. It's up to you. Claudio I can I'll share my screen. Okay Judy's going to project and we'll walk you through some of the deck we prepared. Perfect thank you. Okay and so on the next slide the next slide following this we also have included on one of the side benefits of doing this virtually is we have members of our board and our management team that are here observing this and it gives us easier access. But just to orient you because I know maybe some of these start blending together. We are Rutland Regional Medical Center we are an independent not-for-profit community hospital that serves about 60,000 patients in the greater Rutland service area. We staff 144 beds. We have a workforce of about 1700 employees and a very busy emergency department and a fairly large and diverse medical staff. If you go to the next slide although a lot large part of the past year has been on pandemic response and crisis response activities we still have had an opportunity to tend to some other very important business and planning work including we revised the hospital's mission vision and values over the past year last fall we had a strategic planning retreat with our board where we revised our mission really to focus on to improve the health of our community by delivering high value care through collaboration and that is driving a lot of our work that we've done this past year and going forward. One of the vehicles and one of the structures that is helping us in our mission that we are finding is our participation in the one care ACO it is helping us align with our other community health and social service partners in a way that we have some shared economic benefit and it gives us a vehicle and a structure to front load and redirect some funding from acute care on the back end to primary care care coordination prevention on the front end of things and why that's important for us and why our mission is so important is that Rutland regional employs most of the specialty physicians in our health service area but none of the primary care physicians so and as you know there are limited opportunities and ability for us to help fund some of these things and ACO has proven to be a great source of alignment for us. We've revised our vision in our core values including last fall to adopt diversity and inclusion as one of the four main core values of our organization and we recognize the impact of health disparities and we are actively working to understand those in our service area and proactively address those. Our next slide we are very proud of the work that everybody on the front lines of this organization including behind the scenes to continue to focus on what matters and quality and we received a lot of recognition for those efforts and then on the next slide we as you know we've worked hard Judy and her finance team and everybody in our administration has worked hard to comply as worked hard to comply with budget orders over the over the past. This organization has historically had very good financial stewardship and we have seen the importance of that and benefited from that great work that has gone on for many many years especially over this past 18 months in our pandemic response. Having cash and having liquidity and having a strong balance sheet was essential for us to be able to protect our staff, protect our patients and ensure this place was open for those people who need critical care services. We are working more closely with our community partners to advance health care reform in Rutland County and again the ACO is working out well for this health service area. We are also very proud that we are leaders in mental health and substance abuse services. We are the only community hospital that provides a level one involuntary psychiatric services through an agreement with the Department of Mental Health. We have a long-standing inpatient psychiatric service and for about 13 or 14 years now we've provided the hub medication assisted treatment program for people who are suffering from opiate addiction here in Rutland County and beyond and we consider ourselves a full service community hospital. We don't do tertiary care but we provide a wide spectrum of primary and secondary care services including maternal child health services, a 12-bed intensive care unit that is staffed by critical care providers that are dedicated just to the ICU. We have a full medical and radiation oncology service and we provide the critical subspecialty services such as endocrinology and neurology, orthopedics, ENT, general surgery just to name a few for our service area and on the next slide we've prepared our budget according to the following principles. We really wanted to make sure that we were had a budget that would safeguard our financial viability, continue to provide access to critical health care services in our community and to make sure we're providing a safe environment for our staff and the patients who are receiving care which is more challenging than ever over these past 18 months because of the stresses and the impact of the coronavirus pandemic on our population. We've tried to mitigate our rate increases and manage that. And also as you can see in the budget we have not done a lot of cost cutting this year. We have basically are presenting you with a break-even budget and we're trying to just hold the line on any new expense growth but we feel it's premature at this point in time to make any substantial changes in our financial or operational position until we're able to get a little more clear picture of what the post pandemic new normal is going to be for Rutland Regional Medical Center and our community and healthcare in the community. So this break-even budget is not where we want to be nor where we need to be long term to be financially viable but we feel due to this point in time and the uncertainty it is kind of a break-even budget as a prudent budget that we can kind of hold our own until we get through some of this most critical part of this. So I'm going to turn it over to Judy and have her walk you through the financial story of us as we look forward. So we'll start off on the balance sheet and this is where you know we really managed that financial stability of the organization and what you'll see this year is a very stable balance sheet and we'll talk about the details here but the most significant change is within our cash position and our liability position and that really relates to our paying back of the Medicare advance. Those were the advance funds that we accessed in the early days of COVID. We accessed $25 million. We expect in 2022 to pay the all remaining funds back and that's $18.2 million. You'll also see that we've got $360 million of assets only about 24% of which are obligated through liabilities, the rest coming through in fund balance. When we look at our cash flow again that theme of just really focused on Medicare advance payments that is the single largest change within our cash flow. In total we expect our cash demands, our cash uses to outpace sources by $20 million, $18 of which is related to Medicare advance. You will hear of our goal and focus on annuitizing our pension plan. We think that's going to cost us about two and a half million dollars and the rest is just really related to operations, principal payments and working capital. We are focused on kind of future debt management. We are in the process of working with the USDA to transition about $34 million of debt from a variable rate to a fixed rate. That is something that will only help to strengthen our balance sheet. As Claudio said, we really need to limit our reliance on investment returns. Investment returns have subsidized operations over the last four years and they will do so again in 2022. But we do have a focus on where we're going to change that curve. And speaking of that, so our cash management over the last four years, our margin accumulation, our operating margin accumulation has been $7.7 million. At the same time our investments grew by about 26%. It is that investment growth that subsidized operations and subsidized our ability to fund pension, to fund major facility improvements and debt. So we are again focused on that. Although you see an increase in investment growth, you really don't see much of a change in our cash position. Looking at the income statement, I just want to focus your attention and as we've said, this is a break-even budget and just want to concur with Claudio. This by far has been the most challenging budget to put together. We have a basis that is not credible and so we are trying to understand what historical averages and performance looks like going forward. At the same time, we've had a resurgence of volume when we're facing staffing and labor challenges. So that all plays part in this budget. I'm going to start right off with our rate increase. So we are asking you for a 3.6% rate increase. And ask you to look at that over the last five years. So our last five-year average rate increase has been 2.2% well below the state's average. And again, we're able to do that because we have used those investment terms, investment returns to subsidize our operations. When we look at how did we arrive at 3.6% and I know you as a board have heard me say that rate increases are becoming less and less efficient and less of a lever to pull, to balance operating margins. And here's kind of the backdrop. So a 3.6% operating rate increase gets us $22.4 million of gross revenue. But what we collect on that is $4.5 million. And so you can see that the rate increase is becoming less and less effective. On average, it's about $1.2 million per percentage point of rate increase. When we looked at how we would levy our rate increases, we certainly used all of the available information that we had new this year. So we used the federal pricing transparency. We also used the state available data as well. And then know that in terms of our pharmaceuticals and supplies, our rates are really tied to acquisition costs. So those inflation factors that we're all seeing in accessing those supplies are certainly coming through in the way in which we are charging for those services. Looking at gross revenue, so gross revenue, we go from a 21 budget of $578 million to a 22 budget of $639 million or $61 million increase. A little more than half of that is related to volume that we took out of our budget last year. So when we came to you last year, we were concerned about the stoppage of services and the return of patients. And so half of that rate increase this year is coming back in and we are seeing that volume. And we've got Dr. Gregory and Betsy Hassan who really talked to us about how that is presenting itself to the patients in our organization. We've got the rate increase of $22 million. And then very little operational change outside of those two factors. You did approve psychiatric renovation, CON, that we are nid stride in. That will offer us three psychiatric beds. That's as soon as those beds come online, we'll fill them. And we anticipate that those patients are being held in our ED by large part now. And then just new provider volume mix of services. We did anticipate and I think this is probably something that is going to change from budget assumption to actual decline in laboratory service due to COVID testing. And then we do have an MRI request that we just sent to the board, received that yesterday. We are having some issues with downtime in our MRI and really need to work with you on that CON. From a reimbursement perspective, so this budget is predicated on the fact that every dollar that we charge, we are going to collect about 42 cents. That is a decline of about 1% from where we were in our projection. So that from 44 to 43 to 42, that's equivalent of $6.4 million. And there are some pros and cons and a net effect there of how we came up with that. When we look at those individuals not participating at all, that increases the net to gross by about $5.2 million or decreases. In our 2021 budget, because of COVID, we had decreased our level two utilization. So those are the patients that reside with us who don't have a medical diagnosis that is eligible for a state of federal payment. We have seen that cohort of patients rise back up. And as we speak today, we have seven level two patients in-house. Again, those are patients that there's not a revenue stream for. We expect that volume that we're going to have to write off and impact our bottom line by about $2 million. As part of the COVID waivers that the federal CMS program put forth, we did waive the 2% sequestration on outpatient Medicare reimbursement. At the time we wrote this budget, we assumed that that waiver would be terminated and that we would be subject to that payment reduction again. We do have in-flight commercial contract negotiations, and we have brought in to this budget any changes in commercial payment rules. On the increase, we will talk about revenue recognition and what that means that plays out in some of the metrics that you're looking at at bad debt and free care. But suffice it to say, we were able to bring in an additional $900,000 because of revenue recognition. And then Medicare updates. We did include a 1.8% revenue update on the Medicare outpatient program, 2.8% on the inpatient, and there's no update on the Medicaid program. And then we did anticipate again COVID testing to decline and the write off related to that was $1 million. That is probably something that is way conservative and not something we'll realize. 24% of our revenue is at risk, and we'll talk about that. So 24% of our total utilization is involved and related to payment programs with OneCare. We participate in all of OneCare's risk programs that they offer. That's the equivalent of about 25,000 covered lives. When you look at our utilization compared to the state, Rutland has about 9% of the state attribution. We are limited in how we participate in OneCare, not because of the programs they offer, but because of our community providers who participate or not in OneCare. As we speak now, we only have Rutland Community Health, which is the local FQHC who participates in the program. They are the only entities that can attribute patients. We have not included any risk in our budget, so there's no reserve or settlement set aside for risks in those programs. And I would like to update when we wrote this budget, we had assumed that a total risk would be about 2.7 million based on new attribution, new program profiles with OneCare. That 2.7 million is now 4.3 million. And again, none of that is considered as a reserve in our balance sheet, or would be reducing our operating margin or net patient revenue. We have $20 million in addition to patient-related activities that helps fund our expense and or, in cases other than this year, operating margin. More than half of that, about 11.4, relates to our 340B program. And that is a program that we try to maximize our participation in. We participate also with the Medicaid program. That program participation is up for review at the state level. We are partnered with other hospitals and the hospital association to really understand any impacts that changes in that program would, you know, provide to hospitals and for us that would be something that we would be very concerned with. You've also heard of all of the manufacturer exclusions for those contract pharmacies that, you know, we have relationships with those exclusions continue to increase day after day, has a real impact on our operating budget. From a federal CARES perspective, we are not assuming any additional federal CARES funding in our 2022 budget. We are also not anticipating that we will have to repay any of the CARES funding that we have received to date. We are obligated to finalize and formalize our reporting to HRSA, of which we will justify about $35 million of COVID funding across all programs. Looking at net patient service revenue, this is where I really want to, you know, work with you on our basis for understanding our net revenue increases. As the board had announced earlier in the year using 2021 as a basis to understand whether we met the guidelines of the 3.5% rate increase. For Rutland, that proved very difficult because we lowered our budget by about $28 million. So I'd really like to invite you to think about our base a bit differently. And if we use the 2019 actual performance in Rutland, which is the last year before COVID hit as a basis, and we increase that by 3.5% through 2022, that's the blue line on the graph. If you compare that to either our actual performance in 2020 and are projected in 2021, and what we're asking of this committee to approve in 2022, you'll see that our net patient revenue falls below that trended 3.5% if we use 2019 as a basis. With that in mind and layering on $20 million of other operating revenue, what that allows us is to have $291 million to support our expenses. There is no margin as we've talked about. And in terms of expenses, although we have not been solely focused on any cost reductions, we have been very focused on really minimizing any new costs coming into the system. And although gradual, it is impactful. And I would draw your attention to expenses for adjusted discharge where you see year over year, we continue to improve that metric, meaning that our cost becomes less costly year over year as we compare that to our volume. When you look at our expenses, we go from $266 million to $290 million. And we have prioritized our expense funding in our 2022 budget and our salary and benefits when we've prioritized almost $60 million. And this is related to the labor challenges and the competitive environment that we are working in. As we speak today, we have about 210 open positions in our organization, half of which are nursing. We also have about 20, 25 asks of additional FTEs and temporary staffing that they've not been able to resource for us. So these payment programs we feel are vital in order to retain and recruit staff. In addition, we have supply costs just related to that increase volume or inflation. And we'll talk about inflation. We have also prioritized some spending and IT costs. And this is really related to cybersecurity and really shoring up our IT systems to make sure that we are in a solid standing. The healthcare provider tax, I don't need to talk to you about, you know, that's a 6% tax. And then we did have minimal cost savings come through related to our commitment and the medical office building, where we said we lower lease expenses. We did. There's some restructuring of some physician fees and such. From an expense standpoint, you've asked how much of that expense growth is related to inflation. I would like to say this is not a perfect number. This is our best estimate based on how we know our acquisitions costs are changing and based on some purely reliable information from our group purchasing provider. But at $9.3 million is our inflationary impact. If we were to say that rate payers are responsible for inflation, we would have asked you for a 7.4% rate increase. That's what inflation, that's how inflation would drive rates. We have had, you know, the increase in patient volume, which will subsidize some of this inflationary cost. But just know that that piece is there. And you're seeing it in areas that should be consistent with everything you're seeing with all the other hospitals around wages, drugs, contract staffing. Our latest, just yesterday, we received a contract for a contract staff ICU nurse at $195 an hour. That's what we're talking about in rates. And similar to our expense metrics, our staffing metrics also are well maintained. We start with a budget of $12.92 and get up to a little more than 1,300 FTEs. When you look at that in a FTE per occupied bed basis, again, we're really able to maintain that productivity level. And again, just looking at those open positions, we are in a point where we are having to expend significant amount of salary to incent our staff to come in and take care of patients. Last month in the ED, the ED volume was up 15%. That is new. We hadn't seen that in previous months. And when we wrote this budget, our inpatient census was lagging by about 2%. Last month, every day of the month, we had 10 additional patients more than our budget had predicated. And what we're seeing is acuity. And Dr. Gregory will talk to us about this, but acuity is up as well. And so in part, this productivity is being managed by just lack of staff. And that's not necessarily appropriate. But from an operating margin perspective, I really want to focus on 340B revenue and how that is really subsidizing Vermont hospitals. And if you look at the middle set of numbers and graphs is our operating margin just as we presented before we start carving anything out. To the right is our operating margin if we didn't have federal care so we didn't have 340B. Notice the significant change and significant loss in revenue from not having 340B. The second graph at the bottom of the page is our margin. So that brings in our investment income as well. Again, just taking your mind's eye to that for the set of metrics on the right, the total margin without cares or 340B funding. In some cases, we wouldn't have a margin even from a total margin perspective if not for 340B. Capital funding. So we have 12.6 million dollars of what we feel is available cash to support re-investment back in our organization. I will tell you this is one of our cash flow mitigating strategies here. It has been our strategy to invest 1.2 times our depreciation. This has held equivalent to depreciation. We'll fund about 60 individual projects. We do have money set aside for the MRI replacement that we've requested funding for and as an urgent CCON, by the way, just to put a plug in there. And then the new piece here is 2 million dollars that we've set aside to support what we call service line assessment. This is efficiencies that we know that we can't operate on a breakeven margin year over year. But we also know that our plant needs to be redesigned whether it is bringing in care delivery changes, patient flow changes. And so we've set aside a bucket of money to support that very disciplined kind of reinvestment that will drive efficiency. In terms of risks, you know, volume, is it going to stay? Are these patients here for the long term? 10 additional patients over our budget? Is that something we should expect going forward? What's the impact of this next wave of COVID? Should we expect changes there? One care participation, we are all in. But we still don't know what is the risk corridor within the corridor? Are we participating at 100%? How will our attributed lives change our community partners have until August 25th? I'm listening to a meeting, Allie. To agree to participate so that could change. Judy, I hate to interrupt, but if I could just ask whoever it is that has the background noise to mute themselves, we really need to hear everything that Judy has to say. Thank you. And then even updated from this submission to where we are and still not final, you know, our maximum risk could be as much as 4.3 million when we look at one care projections and then labor management. So our turnover rate right now is 16%. That's a double of what we had seen pre-pandemic. Continue dependence on temporary staff, temporary staff now that we can't find. And then we're awaiting labor salary surveys really to look at where our salaries compare to our peers in our region. And then we do have a union contract that expires on September 30th and we are in negotiation with that. So with that, I'll kick it off to Claudio who will talk about some opportunities that we see before us. So despite all the challenges, we do have some opportunities we see and we're looking to pursue over the coming year. One is to continue, probably first and foremost, to continue to strengthen our relationship with primary care. As we move and make the move towards value-based care and payment reform, that is critical to our success and effectiveness in that. Again, we are making some good progress on that over the past year since we've both gone into the Medicare program together. We are doing great work. We have jointly hired a director of population health for our community. And they are focusing their team and our team are working really well together to focus on how do we use data to really manage how we're performing and where the opportunities are. And we are working more closely, I would say, with the other Rutland Health and Social Service agencies than we ever have before. And we're also trying to put in the structural things to support effective decision making. And again, I will tell you being part of one care has been the catalyst that has helped us align our incentives, align our focus on this important work. We also adapted very quickly to technology, telehealth, and so forth during the early 2020 initial experience in the pandemic and at work. What are those programs that are actually producing results that we can measure and improve the lives of our patients and reduce the cost of care? And so we're doing some great work in that area. And then here is our big challenge. We are torn more than ever at this juncture. We feel, especially the senior leadership of the organization and all leadership, we feel a real compelling need to get back to the routine planning and operational work that we put off during the crisis response phase of the pandemic. However, we are back in a crisis response phase right now. We are seeing patients flood back to the hospital since the May Governor lifting the restrictions. Patients are returning and getting things that they've put off for a long time. So we're trying to manage all of that. Look at how we will go back into providing increased amount of testing and perhaps booster shots now for our community while managing all those still managing that influx of patients that put off their elective care, which really we're finding isn't really that elective after all. If you have an arthritic hip that's limiting your mobility and quality of life or you're having you put off that screening colonoscopy. But we are trying to strike that balance and do some important planning work about the services we're providing, about how our labor costs compared to other hospitals, focusing on recruitment, how are we spending capital? Are we getting some type of return on efficiency on that and so forth? How are we leveraging our increasing every year investment in information technology and how do we make sure that we de-risk the balance sheet and manage the pension obligations that we have? So if you look to, I'm not going to dwell on this. This is some of the our response to COVID-19. Last year over this past year we've had a kind of mantra and a mission that we put in place for the organization. First and foremost protect our patients, protect our staff and ensure the operational capability of this hospital. Through a lot of this effort you can see on this slide, the following slide, some of the safety protocols we put in place and then the third slide, ensuring operational capability. I think we successfully accomplished that. We've delivered over 50,000 vaccinations to our community. We've developed surge capacity for not just Rutland Regional, but for our region. And again, we thought that today's meeting with you, this would be behind us. But as you're going to hear in a minute from Drs. Gregory and Betsy Asan, we're right in the thick of things and then some of the more uncertain times that we've had. So our focus right now, where we are at this point in the time going forward, is really focusing on retention and recruitment. Secondly, the safety of our staff and residents. And third, supporting our staff and our medical providers through this incredible period. So I will turn this over to Betsy Asan, our Chief Nursing Officer, who's going to talk to you a little bit about the State of the Union of our Nursing Workforce and some of the other work we're doing in COVID response. Thanks, Gladio. Good morning, everyone. Mr. Chair, members of the board, as Gladio mentioned, I'm Betsy Asan and I'm the Chief Nursing Officer for Rutland Regional. Today I'm going to speak with you a little bit about our Nursing Workforces and the resources that they need. First off, just about myself, I'm someone who was born at Rutland Regional Medical Center and I've always known what a great community we have. I did leave Rutland to pursue higher education and was fortunate to find a career that provides boundless professional opportunities and the privilege to care for those in need. Early in my career, I grasped opportunities for clinical growth while obtaining specialty or certifications and graduate degrees. But as life moved towards starting a family, Vermont was the only place that we wanted to live. There was one important factor in choosing where to work though and that was that I wanted to work for a magnet designated hospital. What magnet designation means to a nurse is that an organization is committed to high quality patient-centered and evidence-based nursing practice. It also signals an organization's commitment to nursing professional development and the expectation that nurses are collaborative leaders within the care team. And I'm proud to say that RMC has achieved its third magnet designation in December of 2020. This makes us one of 146 three-time designates and only one of 548 designates worldwide. This was a really bright spot during the pandemic for our nursing staff and the organization. Our community is the reason our staff come to work every day and serving Rutland County is the core driver to the work that we do as an organization. And it's not because it's easy, but it's because it's necessary. This drive is what powered our team through COVID. We are proud to be the place of safety, aid, and care during an incredibly uncertain time. And everyone did whatever they could to care for our community. Similarly to the global stage, our nursing staff and health care workers have been recognized as heroes during the pandemic. While surges and case rates may have been different in Vermont, the pandemic took a profound emotional and mental toll as staff faced a continuously changing care environment while worrying for their personal health and their families. The pandemic also exacerbated the existing stress that's caused by inadequate staffing and workplace violence. COVID also exacerbated the challenges that we face in maintaining the staff that are necessary to enhance the care experience. Maintaining ANCC magnet designation and the safety of our care environment requires qualified and available staff. The challenges that we face as Judy mentioned is the nurse turnover rate of 16% and national predictions reach an estimated 22% by the close of the pandemic. It takes an average of 78 and a half days to fill a nursing position. We have traveler billing rates exceeding $130 an hour, which is over three times the amount our staff make. And also as Judy mentioned, we're now seeing requests for $195 per hour for ICU staff. Our educational systems cannot produce enough nursing graduates to meet our workforce demands and our nursing staff bear the workload of continual orientation and student learning, which is not adequately reflected in their workload demands or their compensation. Our staff have validated our concerns this year through our employee engagement survey and 69% of our nursing staff scored the statement, my work unit is adequately staffed as unfavorable or neutral. We also to see a continual rise in aggressive patients with just over 133 instances of employees being injured by patients this year, causing some of our nursing staff to leave the bedside permanently. These indicators point to an unsustainable work environment and it's not conducive to a positive or safe patient experience. We invest an incredible amount of resources though to sustain our workforce. We have initiatives like a grow your own program for our LNAs and RNs, which includes full tuition support to over 20 employees with work agreements to become nurses to Castleton University and Vermont Technical College. We have active affiliation agreements with nursing schools at Castleton University, Vermont Technical College, Norwich University and Adirondack Community College. We're hosting an on-site licensed nursing assistance program in partnership with the Stafford Technical Center, which is an accelerated program for 10 of our current employees to become LNAs in just eight weeks and it's fully funded by us. We've developed a new OR and training program, which is a simulation-based training program for operating room nurses with the aim of shortening their orientation and onboarding time from a year to about six to nine months. We've also been able to increase the number of orientees in this cohort from orienting just one person per year to now four. Recognizing we need to support new graduate nurses, we have a new graduate nurse residency program, which is a year-long evidence-based mentorship program and this supports them as they transition from students to practicing nurses. This has also been proven to enhance retention. We've invested in a workplace violence de-escalation training program called PROACT and this is really to help staff develop the tools and preventing harm from escalating patients. We've instituted sign-on bonuses for newly hired staff ranging from five to twenty thousand dollars based on their experience and specialty and these all come with retention agreements as well. We've also looked at international nursing placements and these are extended contracts for two years with international nurses in the hopes of bringing them into the community and integrating them to here. Right now we're sponsoring some from the Philippines and then we've also taken a concerted effort in recognizing that embracing and promoting diversity equity inclusion has the ability to increase our recruitment and retention efforts. So we formed a DEI committee with representatives from our frontline staff to our board chair and this committee has developed a multi-year DEI strategic plan that includes goals for our workforce, equity and care, leadership development, culture and organizational support and our organizational brand. As part of that plan all leaders and staff have completed implicit bias training even throughout the pandemic. We took a visible stance within the community in support of DEI efforts such as the I Love Rutland All Our Welcome Here campaign. We've partnered with the Pride Center during Pride Month for various events. We raised the Black Lives Matter flag. We have a focused DEI Arts in the Humanities Book Club and we focused on education on LGBTQIA care in the emergency department just to name a few of those initiatives. This is an evolving work effort and it will continue but our staff have shared that they feel an improvement in our work environment in this area and in our employee engagement survey this year we've increased our scores from 2019 and we also now exceed the national health care average for this. So these initiatives cannot offset the pandemic's impact on the workforce as we now have over 100 open nursing and nursing support positions for hire. The lack of staff and lack of available contract or traveler staff places an additional hardship on our direct care employees and their leaders. In order to provide safe patient care we've instituted premium pay programs to incentivize already overworked staff to work more. In December 2020 we were uplifted with the hope as we administered our first of over 50,000 COVID vaccines. There was a glimmer that we were on our way out of an incredibly stressful year but as the fall approaches were wary of the impact that the unvaccinated population and the Delta variant could have on our community and our workforce. Protecting our workforce from the threats and impacts of inadequate staffing and workplace violence requires resources. The adequacy of our financial resources determines our ability to provide a safe high quality and efficient patient care for our deserving community. After an insurmountable 18 months of the pandemic it cannot be ignored that the health care system is dependent upon the progression of nursing. While gestures of goodwill and praise as heroes provide some level of appreciation for a tremendously difficult job we need to support the nursing profession through much more. We need to invest in the workforce, increase educational opportunities and provide resources that create and establish an environment of physical and psychological safety. As a health care organization it will be imperative that we have the financial flexibility to respond to the demands of our workforce and community to ensure safe high quality patient center care that can only be created by a supportive work environment. The reason I come back to work every day is the same as why our staff do. It's an honor and privilege to serve our community when they're most in need. So we're asking for support to ensure that we have the resources necessary to create this environment and we'll continue to be proud to work in it. Thank you. Dr. Gregory. Thanks Betsy. Thank you for having me. It's a privilege to speak with you today. I'll tell you a little bit about myself. I am as Claudio mentioned an emergency physician here at Rollins. I've been here for 14 years and I've served the institution as medical director of the emergency department for 10 of those years. It was recently asked to serve in another capacity as a chief medical officer. I want to speak to you about the efforts that we are undergoing to ensure that we continue to provide best quality care to patients in our community not only in the emergency department but institution-wide and just to allow you to sort of ballpark this I'll provide you with some figures. Between the emergency department and our clinics we provide patients and families with over 126,000 visits per year. We do over 6,000 surgical procedures a year and those numbers obviously were off substantially and significantly during COVID. The ED saw a reduction in census of around 24 percent on average but as high as 48 percent and our clinics were off between four and 40 percent depending on our surgical capacity was reduced because of the mandated closures as well as some capacity issues around staff and so we were able to provide services at a reduced rate and about 16 percent off of what we would predict. We're trying to make that up and we're working very hard to do that and as a consequence in the emergency department we're seeing on a daily basis between two and 20 percent more than we are staff to see or equip to see in our clinics two to 25 percent over and our surgical colleagues are committed to making up all of those procedures that we're not done during COVID and that is again a substantial number of procedures in a fairly short amount of time. So we're over capacity and unfortunately that is complicated by the fact that we have as Betsy alluded to reduced clinical office staff in almost every area of the hospital we've lost staff to illness retirements and just moving on to different opportunities many have left health care entirely. At the same time we're seeing a higher patient acuity which I'll speak to in a minute. Some of that results from patients not receiving care in COVID and some of it we frankly can't account for. Perhaps most impactful is the greatly reduced community capacity to provide support to patients coming out of the hospital and otherwise and that has particularly affected the extended care facilities in our area. Psychiatric facilities in the state including the Brattleport retreat and our primary care colleagues are seeing a similar increase in volume. Their urgent care center is seeing 130 percent of their sort of budget capacity so they really don't have the ability to provide sort of more service on top of that although they're working you know very hard to do their best. This has resulted in increased holds for example in the emergency department where we hold medical med search medical and surgical patients as well as psychiatric patients. We use NIDOC which is a nationally validated measure of emergency department crowding and it's clearly correlated with outcomes such that increased crowding has been demonstrated repeatedly to correlate directly with reduced outcomes and increased mortality. We are overcrowded in the department now 75 percent of the time and of particular concern the two most concerning categories of crowding severely overcrowded and dangerous to overcrowded we see that 44 percent of the time so that significantly impacts our ability to deliver care and it's something that is of great concern to us. I think the point I'd like to stress is what Betsy mentioned our medical staff our clinical staff involving our nursing staff our technical staff and really our staff at all levels are being asked to work harder longer every day to meet the needs of our community. We really don't see an end in sight. This has been impactful in a number of ways and I'd like to speak to the acuity that I mentioned earlier. I as I mentioned work in the department and I will tell you that I've made more primary cancer diagnoses in the last three months than I had of 24 months previous to that that results from a lot of issues. Some of them of course patients not being able to follow up or see their permanent care providers during that pandemic. Others are you know really unaccountable but it's very real for patients and it's very real for families. We see more patients with complications of diabetes and stage liver disease and stage renal disease than we are used to seeing in the department and elsewhere and the impacts of that long term on the healthcare system are significant. We have patients needing elective procedures and they have as both Betsy and Claudio mentioned experienced significant delays. This can be things like screen calloscopies, it may be surgeries that are considered under normal circumstances elective but these are patients who have real needs and suffer pain and inconvenience and risk of increased dysfunction because of the delay getting these procedures and we're also seeing a greatly increased number of patients with acute mental health needs especially pediatric patients which is of particular concern to us and patients with substance use disorder and opioid use disorder excuse me. Importantly those numbers probably are even worse than we appreciate. We know that heroin and other opiate related overdoses increased 38% during the pandemic. Most of those did not make it to our emergency department or other hospitals and we are seeing many more patients with complications of substance use disorder and particularly opioid use disorder including cellulitis, deep space limb infections, spinal abscesses and cardiac infections endocarditis and again those have very long term and significant consequences excuse me for the patient in the healthcare system. We're seeing more psychiatric patients who are suffering with instability secondary to issues around their medications, inability to get them, inability to have their medications regulated by a provider as they normally would but also unstable housing, unstable family environments and unstable employment and again those all the impact us here at the emergency department our institution and our community to a great degree. On a positive note recognizing this we have made efforts to do what we can. We like some other emergency departments in the state have an active medication assisted treatment program and we do this in a partnership with Turning Point which is a local addiction and recovery service so we're able to provide patients who are interested with suboxone out of the emergency department and the important part of that is that we're available 24-7 to do that. Westridge is as you've heard previously a very good program here in Roland but it's not open 24-7 and so there are plenty of patients that just can't make it their choose not to and so we are now available to them. Additionally we're supporting Roland mental health who has received state funding for crisis response team and this is targeted specifically at pediatric patients with acute mental health needs and our hope is to treat them in a setting that is not the emergency department so that they are more comfortable safer feel more secure and we can hopefully get a plan in place around them that doesn't require them to spend time in the emergency department and I will tell you that we have seen pediatric patients with acute mental health needs spend over a week in our department not infrequently and that is not a good setting for any patient but a particular concern is the effect that has on pediatric patients who again are already in mental health crisis. Finally I'll speak to our sort of workforce issues from a physician standpoint but I would just like to stress that this really does apply to all of our clinical staff nursing staff technical staff and our clerical staff as well. There are increased reported feelings of frustration exhaustion and burnout. It's frankly very difficult to reconcile the needs of our patients families and communities with our own needs as providers. Trying to advocate for reasonable work-life balance time with our families time to rest relax and recharge with the needs that we're facing is really frankly it seems like an impossible task many days. We've lost providers to relocation and retirement. This is a fact that our orthopedic service line cardiology pulmonary critical care, endocrinology ENT and GI and we're having recruiting difficulties and we're learning repeatedly it's not because of who we are as an institution it's because we can't for example find the potential physician staff, potential nursing staff housing. We can't find them child care and so we continue to have to try to fill gaps with lobeums physicians with travelers as Betsy mentioned that to greatly increase rates and we know for example that our travelers who previously might have left here and had five or ten options to them they now have hundreds and so it's not hard to understand where that price sort of pressure comes from. To end on a positive note I do want to reassure you that we are working hard to support our provider and staff wellness. We've had initiatives here in the emergency department as well as on other units and to support other service lines. We have a wellness campaign right now to support our medical staff so we're doing our very best to ensure that we carry everyone forward in a safe and supportive manner to allow us to provide the care to our patients community that they need so thank you very much. So folks we I know in some parts we're preaching to the choir because you've heard from some of our colleagues and I know we've talked and you've asked us these questions throughout the past year how we're doing. The challenge that we have we are very fortunate to be in Vermont and we're very proud of the way our state pulled together, our community, our leadership, our elected officials really pulled together and we're an example for the nation. However it's a little bit deceiving because we've done so well we just want to make sure that people understand the incredible challenges that are happening here in the hospital. This is a more uncertain time and a more challenging time in this uncertainty wave of the pandemic than we've ever had before. And I think the challenge and the stress on all of us is you know all businesses are going through this we're not unique right and everybody's feeling this in our community and every businesses. The challenge is when you know a local restaurant or a store it's a tragic thing and economic challenge when they can't find enough staff they can reduce capacity not staff that section of the restaurant or close we can't do that. Especially in a rural hospital like us as a practical matter diversion is not an option. If we close beds people end up just going it's the balloon situation right they end up stacking up in the emergency department and impact our ability to do that. So our staff have pulled together and recommitted to what we need to do and have done some heroic things shift by shift to make sure that we are there and we are there for the community and that when you need us we will take care of you and you will be safe. We're a little bit as you can see we're a little bit haggard we're a little bit challenged and a little bit dejected that we're back at this again but we just wanted to make sure that we're also telling our story that things are not normal here in the hospital and we're struggling to try to continue to find our new normal and we appreciate your understanding of that. So with that that is our presentation and we'll turn it back to you Chair Mullen. Thank you very much Claudio. We're going to start our questioning off with board member Maureen Yusfer Maureen. Thank you and thank you for the presentation and all that you are doing through this crisis and all the time. I really appreciate Judy putting together all the financial statements and including them you know in the presentation and you know I'm really going to work off of those statements and you know starting with the balance sheet you know can you talk first a little bit about the COVID money that you received how much is left on the balance sheet and then can you also address how you accounted for the capital purchases through the fund balance account and how much that was? Sure so as of the projection in 2021 we will have no funds left for COVID. We anticipate that through the required reporting through HRSA that we will justify all those funds if not through capital or expense through the alternate lost revenue calculation. There are no funds in 2022 either. We did use capital or access COVID funding for capital for things like negative pressure rooms, laboratory equipment, some building modifications. I mean I think that was right around a million and a half dollars. And that was the fund balance so it wasn't assumed as other operative revenue. That's correct. Okay and then for the ACO what outstanding settlements are you expecting you know to come in because we're you know we're hearing most of the hospitals are getting some favorability from the past and just how are you accounting for that and when do you expect to receive it and do you have it flowing through any of your financial statements? Sure so the settlement that I think you're referring to is the 2020 settlement and for that year we were only in the Medicaid program. So there are two pieces of settlement with or there are two pieces of risk in the in the Medicaid program. It is the fixed payment program with regardless of what your claims experience is your fixed payment is your fixed payment and you win or lose. Based on how those funds come into the organization we we post that winning or losing reward risk into our budget on a monthly basis and so for us that was about a million and a half two million dollars that would have come through in our 2020 financial statement. What we have outstanding is about 1.1 1.2 million dollars that we have not taken as any type of revenue or posting in our financial statements and that relates to just the cost of care the spend outside of our four walls for primary care and other providers of services in our community. We have not taken that into account 1 because we've not validated it and it's it's not final and 2 we're not exactly sure how is a community we're going to bring that in and support other efforts whether it be care management community health home health and those types of things. But first and foremost we're waiting to validate we have open dialogue with one care on that. The other piece is we don't have any 2022 risk budgeted in our in our in our financials and as you can see we thought that was 2.7 it's 4.3 and we're feeling a little uncomfortable at that level. Yeah and you may maybe just put that up on the back you know when you get it in just kind of offset that for potential risk or something. But we you know first we have to agree to the number. Right. I mean not the 4.3 I mean they you know what you're getting potentially back might be able to offset the future. And I appreciate your comparisons to 2019 for NPR and I think that's you know fair to look at it that way. I also think when we're looking at the balance sheet going back to 2019 or you know what would be maybe a pre-pandemic period is important as well. And you know looking at your your cash back in 2019 it was 145 million compared to where you think you'll be in 2022 of 193 million. So up you know 33 percent and similarly in your fund balance about 220 moving to 273 so up 24 percent. So it certainly appears that your balance sheet is probably the strongest it's been in years and you know how should we think about you know that change from 2019 kind of the pre-pandemic period to to where we sit right now. Sure. So that balance sheet you heard Dr. Gregory you heard Betsy you heard Claudio talk about just the strength and our ability to fund programs to entice and incent staff to sign contracts for travelers. But but first and foremost it gives us the ability to come to you with a break even budget. I think that it could be you know it's not without the realm of possibility that we're going to lose some money. If you look at our past performance where we've budgeted two and a half percent and we're just eking out bottom line I think that that could happen. And so that balance sheet is there and we are utilizing it to make changes and to make decisions going forward. And it is because of that growth that we came to you with a break even budget. Yeah. And I definitely appreciate that. So are we going to go Claudio. Yeah. Go ahead. No. Go ahead. Yeah. So but I also want to and you know and you've seen hospitals independent rural community hospitals the tides can change very very quickly. We in our strategic planning focus we we're always evaluating are we stronger as an independent hospital or should we be joining on to a system or collaborating more closely with other organizations. And we've made the decision organizationally our leadership and governance and and and so forth that at this point in time we feel we are stronger and more responsive to our community needs as an independent hospital. That's not a one and done that's something we continuously evaluate. But there are fewer and fewer independent community hospitals out there and there's no safety net for Rutland Regional and you've seen we've seen in Vermont hospitals that have been historically very strong on operations and with very strong cash reserves and very strong balance sheets change very quickly. And in this uncertain time we don't think that you know we think it's prudent and important for us to have a decent balance sheet to be able to fall back on because we are in the middle of the pandemic. We're not we are far from out of this and the future is is very uncertain and very challenging. So that's you know kind of our position on why we would say hey listen this is important it helps stabilize operations it helps us be responsive and it helps us mitigate costs that we would pass on to the consumer on that. And just the last point Maureen if you look at our age of plant you can see that year over year we're aging and our plant has been you know here for a long time and the delivery of care and patient flow demands are changing as we're seeing more patients present from an outpatient perspective as an inpatient. We've got two million dollars set aside in our 2022 budget for this but that's really a drop in the hat right. And so for us to be really efficient it is likely that we are going to have to reinvest in this plant to really drive quality drive patient access and lower costs and that's what our balance sheet does for us. Okay and just looking at the cash flow the 2.5 million in the pension funding and then the talk about the future focus of annualizing the defined benefit program you know do you see that 2.5 million continuing in the future do you see a big adjustment to any changes in your pension plan? So if you look at our pension plan right now we are considered to have a model plan we are about a 105 funded which means we have more assets than we have projected liability. Unfortunately in order to place that in an insurance market the insurance company takes on risk so they want a premium and so we're predicting that we're going to need to be funded at about 110 percent. This 2.5 million gets us to that level of funding which allows us to go to the insurance market to annuitize one time. When we do this though you will see an impact and I think you saw this with Southwest where we have an unrecorded liability that's sitting in our net assets that we're going to have to realize and we'll obviously disclose and work with all interested parties in that but that's that's where we're at. Okay all right and do you have any timing of when that that would have to be done would that be next year or I mean 23? It could be a 2022. We are just in the early phases of investigating and we'll be reaching out obviously we want to place this debt in a highly rated insurance company and we want to do our due diligence and we have to price it so. Okay moving to the income statement can you discuss the new revenue recognition and the impact on 21 and 22? Also do you think this impacts other hospitals? I guess can you just talk a little bit about the net change? Sure and so this is a very highly complicated really anchored and generally accepted accounting principles but suffice it to say it is a regulation we are required to follow. In its simplest terms and its simplest forms what the change is is it basically takes any bad debt or free care that was related to a claim that had some type of insurance on it. So we're talking mainly deductibles and and co-pay and based on this new reporting standard we have to report that right off whether it be an anticipation of bad debt or free care as a reserve linked to the primary payer and so what it effectively does is just reclassifies this lost revenue if you will from bad debt and free care up to a payer up to a reserve. We will be implementing this as of 2021 and so you see that coming in in our projection and you see it coming in in 2022. Was it just a million something did wasn't there some net impact though? Yes and so when again highly complex but when we looked at these models the models determined that we had about $900,000 of reimbursement through payment of deductibles and co-pays that we hadn't anticipated and so we brought that in as revenue so that increased our that increased our net revenue. In 21 or 22? In 21 and then we re-established what those payment percentages are going in 22. Okay and then can you talk about utilization expectations from the 2021 projection to the 22 budget? I mean you've done a bridge that talks about it to budget but that's fairly that's obsolete at this point so can you can you talk about utilization assumptions from from those two periods? Yes so if you were to look at our 2021 projection and compare that to 2022 budget there's minimal increases in revenue I think it's less than $3 million and so what we're really saying is that we believed our 2021 activity is going to present again for 2022 and what that was predicated on was a little bit of sluggish patient volume and where we said we were behind we've looked you know and we're up now and the ED utilization is up but with that is all of the cost of labor and so we hadn't anticipated these highly costly incentive programs or the continued increase in travelers so they're really offsetting each other. Okay because that is a concern you know I have just looking at your financials the change from the 267 net NPR and the 21 projection going to 270 for 22 when your rate increases is over 4 million of that so everything else would either be so if I were to rewrite the projection today Maureen based on the volume that I know the net revenue would go up by about six million dollars for 2021 projection but my expenses are going to go up by about seven million okay but but that would be a concern so if your 21 projection is a 267 are you saying it may end up coming in at 272? Somewhere in the neighborhood yes but then next year would the budget is down so it would be down to 270 and if we were doing a bridge we know there's rate increase in there of over four million so that would be utilization going down. Right so so that's the challenge in this budget right is wait what's the base and you heard Dr. Gregory talk about overcrowding in the ED where we have we have 25 patient rooms at times we have 48 patients like how long can we sustain that you know so will we sustain 2021 volumes and 22 at this level for the last couple of months I don't know we're saying no not by a lot you know a few a few million dollars but I'm not sure we have the physical and the staffing capacity to do that. Okay yeah it's just I mean we know we all don't know what's going to happen just seems like if there was still pent up demand that's starting to come back and that wasn't fully impacted in 2021 you know we'd be getting that in 22 as well so it just seems like there's yeah potential that you'll come in higher. So our facility is at capacity our OR utilization is near capacity our ED utilization is over capacity we are looking at our inpatient beds and based on you know the needs of those patients we're holding in the ED often can't place those patients on the floor so there's there could be pent up demand but this facility really cannot support much more of that. Okay and my last question or comment is I know you weren't you didn't fill out the chart that the health advocates office had had requested and you talked about you know potentially getting some other data and you might have heard from one of the prior ones I mean I'm really looking at all the data everybody submits and you can you know do a gross to net reconciliation you know on payer type it doesn't break it out inpatient outpatient but it's kind of a consistent way to look at that and when I do that for Rutland you know pegging Medicare at one Medicaid is 0.86 and commercial is is 2.14 which is right now the highest of the four hospitals we've looked at so that rate you know commercial relative to Medicare is certainly up there and I don't know if you have anything to add to the report you were potentially going to be receiving and sure so that's an aggregated number if you were to look at this percentage inpatient to outpatient it would look differently and then if you slice it by service obviously looks a whole lot different and so there's a great variation we are working to try to follow the burns and associates report that you all received we're having some difficulty but at the end of the day you know where I have to really kind of come in on is that regardless of what these payment percentages are it's not accumulating in our operating margin and so when we're using Medicare as a proxy unfortunately Medicare isn't covering costs and so we all talk about it around you know the the subsidy and the fact that Medicare and Medicaid aren't paying costs and what are we doing about it and and that's very true and we need to continue to engage in these conversations but that is where we're at today are we trying to do things to lower these costs absolutely you know reinvesting in patient flow and care redesign looking at labor management practices and the like but it is it is difficult and it it's all hangs together you can't look at one metric without another I agree and it's it's extremely complicated and I wished it was easier to get our arms around okay yeah thank you and and I know you know it is something that the other thing in there is efficiencies and things like that I mean it is a benchmark to be able to compare certain things it's an yes it's an aggregate level but you know looking at that relationship you know is an indicator so and also I would I would posit that we also need to look at the the bigger picture of the community we're serving you know socioeconomically challenged rural wide service area that you know we as an independent not-for-profit community hospital are are serving it you know it drives some of that and our position is somewhat unique in that you know we staff a true intensive care unit we could lower some of those costs by not providing an intensive care unit it would be a huge disservice to the population we serve and a huge burden on our colleagues at Dartmouth and UVM who would have to pick up that thing and quite frankly people would not get the care so there are some things that we are doing here at Rutland that are somewhat unique as the second largest hospital in Vermont but when you look out outside of Vermont we are a small rural community hospital serving a underserved socioeconomically disadvantaged community so I think we also need to look at that frame as we look at some of these. Yeah okay Claudio I would just add to this sort of bulwark the example that you just gave these are fairly complex issues and for example around the provision of critical care UVM and Dartmouth right now don't have much capacity if any depending on the day and the other piece that we rarely talk about in forums like this is we don't have the ability in many cases to get patients there so the EMS system in this state is strained to the breaking point and so even when we have patients that have critical care needs that we can't meet here we are regularly cobbling together a plan to serve these patients and their families so it's just it's a much bigger problem than you know nearly what is what services are offered at any individual institution in a state like Vermont. Okay thank you. Just on the efficiency though if you were to look at efficiency today you look at our income statement and it looks like we've got a million and a half a dollar deficit in staffing but if you look at the efficiency we cannot ask our staff to work any harder and accept any greater assignments than they are now it really is looking at those labor pressures and retention and recruitment and finding employees to come work for us and work for every other hospital here in the state. Great thank you Maureen and next we're going to turn to board member Holmes Jessica. Thank you and I want to thank you for that very thoughtful presentation and clearly all the work that you're doing in Rutland to serve our communities it's obviously just hearing your voices and hearing you talk about what's happening in capacity and trying to serve our patients in this pandemic is it's I know the work that you're doing and I feel gratitude for it. So and I worry about the next few months I'll be honest with you so I get my worry is being shared. I will say Judy as a one board member I really I think I do appreciate the look at NPR growth based on the 2019 base I actually think that's the right approach I think it smooths out the low volume in 2020 and the high volume in 2021 so I appreciate the way you presented that. I'm thinking about the the I had some questions about your projections and so Maureen asked them about what they are for now for 2021 and it sounds like they're higher than even expected when you presented your budget which is actually similar to what other hospitals we've heard from with the volumes and I'm wondering actually in particular with Rutland as the second largest hospital and with patients north of Rutland experiencing access issues particularly in the areas of specialty care and imaging I'm wondering if you're seeing an increased flow of patients from Middlebury and other areas down into Rutland that you wouldn't otherwise expect this is not just pent up demand from your community but actually it sounds like from what I'm hearing in my community that there might be some overflow going down your way so I'm wondering if you could speak a little bit to that and how you see that going forward and is that in the projections and the budget for 2022 this is maybe more new information I'm just wondering how you're thinking about that just might be a little bit for Dr. Gregory and a little bit for Judy. Yes I'll let Dr. Gregory start and then I'll follow with the numbers. So I think the short answer is yes I think the complicated answer is sort of maybe or we're not sure so we certainly are seeing folks that are outside our traditional catchment area and we're also seeing patients that we're fairly certain are from far outside our catchment area but that have now local addresses listed so real estate in our area like much of Vermont is very tight I mentioned that earlier and we believe although it's very hard to prove this especially you know given the short timeline that this is a walled under that these are probably patients from outside Vermont state that are relocated to Vermont because of COVID and are now contemplating making this an apartment residence maybe so they have you know addresses listed in Killington and are renowned they appear to be from Vermont state as far as we can tell but many of them you know are from New York or New Jersey or Massachusetts and so it is an amalgamation of you know Vermonters from outside our catchment area and then sort of new new Vermonters maybe from from far beyond. I guess my subsequent question then would be are you going to continue to track that so to the degree that you're serving newer populations next year when we look at the NPR growth it'll be helpful to understand that some of this was you know you're serving populations that you don't traditionally serve so if NPR growth is higher than expected in large part it may be due to that different volume than you anticipated rather than you know pent up demand in your own community so and that is certainly within our capabilities to track as it is one care and so not to forget that many of these patients could be enrolled in the one care programs and we'll get the reporting there as well. I also just wanted to note that I really appreciated the low change in charge request particularly made at the expense of achieving a positive operating margin for next year I think that was very thoughtful into the communities that are you know suffering from high costs and and potentially lost jobs and all of that so I wanted to note my appreciation for that. You mentioned in the narrative that in setting and actually in your presentation as well in setting your change in charge request you reviewed some of this data from the Act 53 required reporting and and you looked at the price transparency website I'm just wondering what you learned from that exercise because I've certainly tried to do that I've gone on to some of the price transparency websites it's very difficult to learn much from those and to navigate them and Act 53 of course is Chargemaster so I'm wondering as somebody who's much more in the weeds on charges prices you know what you learned from that exercise. Sure so I will agree with you entirely the price and transparency is very difficult for anyone to go in and try to draw conclusions who does not have some in-depth knowledge of you know hospital price setting it's difficult. We worked in major themes we looked at services we had had a concerted effort for a number of years to to look at lab so we knew that that was an area where we probably looked really favorable compared to other hospitals and so we began looking at that level and the Act 53 data proved more beneficial than the pricing transparency we leveraged Act pricing transparency when we thought we needed something deeper from Act 53 but first and foremost inflation drove a good portion of our rate increase because we set our charges based on acquisition cost and when we're seeing that inflation primarily in our pharmaceutical spend also within our medical spend you know that is you know a foundation and a factor so okay great and actually if you could that my last question involves the inflation and your slide 20 is it possible for you to pull that back up I think it would just be easier for everybody if we had that slide up. Is this what you were referring to? Yeah that's great so I know this is a this is actually a new request of the hospitals to fill in this table and I think from looking at this that perhaps there was some misunderstanding and parts of it which I can walk you through but I think my interpretation but before I do that and I'm really just doing this so I can understand better but also so we can go understand going forward kind of what this table is supposed to be presenting but if I look at this if I look for example at the wages and medical staff I would interpret that as on average your medical staff is going to get about a two percent wage increase and your non-medical staff is going to get a six percent wage increase on average wage compensation increase on average is that the way I should correctly interpret that? It is yes okay so six percent for non-medical staff is that driven largely by market adjustments by the labor market shortage by realizing that yeah maybe your market wages haven't been keeping pace with other hospitals for non-medical staff? Yes so half of that is a correction to our 2021 budget where a year ago we came to you thinking that we were in good standing with retention and recruitment and we actually were considering not giving any market increase raises to our staff and then COVID hit and all of the labor competition the market pressures we knew that we weren't able to live up to that plan so half of that inflation increase relates to a market adjustment that occurred in December of last year. Okay helpful and so then drugs obviously this is the average price of drugs drug acquisition for the hospital is you know growing at six percent medical supplies on average acquisition costs are rising prices are rising eight percent contract staffing the average wage that you pay your contracted labor is doubling? So yeah that percentage there's a piece of it that is utilization as well as rates but I think that if you look at you know we're paying in excess of $120 an hour we were down somewhere in the 60-70 range prior to COVID so that's probably more of the percentage you're looking at there. Okay so we are trying to keep it clean of any volume you know utilization any of that in this but that's helpful and then the other insurance self-insurance does that mean that there is an increase of 3.5 percent on claims costs that are not being passed on to employees through premiums that Rutland is now taking on an additional 3.5 percent of the growth in claims cost for its population that it didn't before? That is correct. So it's not being passed on to okay and then okay and I understand the retail and 340B program that is with the assumption that going forward some of these manufacturers are dropping out and so now the prices that you pay for 340B are going to be or those drugs are going to be higher because you're not getting the discounts because of non-participating pharmaceutical companies yeah? Is that right? Okay perfect okay that's really really helpful to me thank you for walking me through that I just wanted to make sure in the third column over this is where I think there's a misunderstanding the third column over it was supposed to be the percent of that that that line item in the overall budget not in the percent of the second column so for example I say that because for contract staffing the one million dollars there from my looking at your expenses it's less than two percent of your overall expenses is in travelers and contract labor so it's not 11% although I recognize it's 11% of the nine million right I think so I just want to say the third column is supposed to reflect what is the percentage of that category in the overall operating budget? Yes so this was a schedule we actually had a little bit of difficulty completing and we worked with the staff at the Green Mountain Care Board so we'll go back and figure out how you want it reported I think there were a couple of different ways. I understand that yeah because it's a way of getting an understanding of the weighted average of of you know each of these bucket components into the overall budget and by how much you know each of those component parts is growing and so the way I think about the nine million dollars which is your total inflationary growth in your two hundred and ninety million dollar budget so I think of nine million nine point three million sorry my glasses are nine point three million out of 291 million basically is is explained by inflation and that gets you to about three point two percent so three point two percent of your overall expense budget is driven by these inflationary pressures which you know to um the three point two percent is about on par with what we're hearing from other hospitals so when I when I do that calculation I'm I'm trying to figure out then how do you get to seven percent so I'm just trying to understand is it from this table or is it from some other table I see nine out of the 291 million as inflation and so that's about three point two so I cited a different number so if we were to look at the net revenue that we gain from each percentage of rate increase which is about one point two and you divide that by the nine point three that's that's where I'm I came up with a seven percent number okay so to some degree that's reflecting cost shift as well right I mean so your point about seven percent would be what we would need to be what we would ask for if we really wanted to cover all of our costs that is also taking into account the fact that your um rate request is not going to fully cover your cost because it's not going to apply to all of the payers is that right or am I am I mixing well what what it's really what it's really implying is that with inflation some of that is supported by utilization growth okay okay thank you that was helpful I really understand and I'm happy to chat with you offline about this table and how we can make it clearer sure going forward I'd love to do that if I can do that sure happy happy to have that conversation great thank you thanks Jess next we're going to go to board member lunch Robin thank you and thank you Claudio and Judy and everyone else who uh really did a very thorough job on your budget submission all of my questions were either answered by your submission or were asked by Jess or Marine so I'm all set thank you thank you Robin you're helping to get us back on schedule board member Pelham Tom well I'm going to be helpful in that regard too I mean three three of Jess's questions were exactly the ones that I have written on my yellow question sheet here um and uh so I I'm actually just down to two um you know I'm claudio started this presentation by saying um that it might be a little bit too conservative and as I kind of look down at the context of the 2022 proposed budget in the context of the 19 the 2019 to 2022 trend I would have to say um there would be a strong argument for a higher charge increase the um for Rutland the uh over that that period 2019 to 2022 the NPR FPP trend has been 1.72 percent the total operating revenue trend has been 1.8 percent the total operating expense has been 2 percent and this year they're proposing no operating margin and I um I appreciate Jess's question about applauding that in terms of kind of keeping that pressure uh at minimum on on the charge pressure but I'm wondering why the decision wasn't made to um say request a charge of 4.6 percent which would give you uh one and a quarter million dollars uh into operating margin so you're not committing it to anything it's just there um you know in in your operating statement for uh and helps buy you time that that you think you need to kind of figure out what your strategic plan is given all the turmoil in the in the in the system um why not just bank this money and have it available uh you um and in your base for uh future consideration of of what your strategic plan might be yeah tom you know we are concerned about our community and the businesses in our community that are already struggling everyone is struggling during this period of time and we did not want to add any more burden if we did not have to um we figured we could go another year with a flat operating margin and given all the uncertainties that we are facing again we wanted to come in with a conservative budget so that makes sense to me and it's a very kind approach um I I could see others making uh not making that same decision um so I applaud you for that the only the only other question I have that um might be embarrassing to me because I should know the answer but I was looking at the payer mix table and again looking at the 2019 to 2022 budget trends and um the Medicare trend is uh over those years is uh and this is a NPR FPP not gross is 1.99 percent and then the Medicaid trend is a 15.7 percent uh Medicaid goes from 19.7 million NPR FPP in 2019 to 32.6 million in 2021 projected and 30.5 million for 2022 budget and the commercial trend is less than is is actually a negative one tenth of one percent and I feel like I'm missing something because I I read your statement about um the issues with cost shifting from state and federal programs continues and requires we raise our rates by 3.6 percent but then I look at these trends and I I don't see the cost shift in your payer mix table so um a lot of numbers there I'm certainly willing to um work with you and kind of put together a schedule that will address address your question if that's helpful um I'll tell you from a high level we're not seeing major shifts in um in payer mix at all what we are seeing is a shift to the ACO so I'd want to make sure that we're interpreting those fixed payments and the way that that is accounted for uh accurately in your numbers so certainly willing to work with you but um yeah well I would I would appreciate that because I just want to make sure that I'm on solid footing when I'm I'm kind of looking at this and I do think that the fpp numbers of that 49 million is in is in this table so uh spending a few minutes just to straighten my straighten me out on on uh so it would be helpful thank you this next I'm I'm good to go thank you may I just just make a comment just uh uh member pelham um you know thank you for your recognition of of our efforts where we you know we are still trying to to manage the cost and and you know the three-legged stool of quality access and cost we're trying to make sure we're keeping those aligned however you know we also have benefited from years as I say stated in the outset of strong financial stewardship and we've also benefited greatly from federal and state relief here in Rutland and a and a finance team led by judy and folks that were able to maximize our ability to get that that played into our ability I don't know as if we're any more uh kind or um altruistic than any other hospital everybody is in a different situation in our state and our colleagues are all you know one of the balancing acts that is becoming a lot more tenuous and challenging is you know we need to be there for our communities we're not helping the communities if we cut costs so much that we are not able they're not able to access the care that they need so right it's it's there's a calculus there that there's uh the science of it that you're really trying to work and and you've helped us be more focused on that but there's a little bit of an art to how we try to balance that for each individual community I just wanted to to make sure that um and those decisions uh you know I've been in Vermont for 13 14 years now those decisions get harder every year for for all of us yeah well I appreciate that I I think in the long where it goes around comes around and uh you know you you've uh you've taken a um a disciplined approach with your budget and um haven't I think there would have been some additional running room there which you make the choice not to go after and I think that's that's to be applauded and and the hospital should be applauded you know in your community for not uh pushing to raise your charge your charge rate as high as you might have thanks Tom so um this is probably not the appropriate setting for me to make the the statement I'm about to make but I'm going to do it anyways and um Dr. Gregory I want to uh congratulate you on your new position um you have some big shoes to fill and I noticed that uh Dr. Boynton was on the line at least earlier and I just want to make sure that I give a big shout out to your predecessor who um was always there when we had questions and he was very helpful to the board and uh it even predates my time here at the board uh I remember bringing him as a witness to a senate health care committee meeting so um Dr. Boynton if you're listening um the members of the Greenmont Care Board are very appreciative everything that you've done for us as far as answering questions and um we hope that Todd will follow in your path and be as open to uh are sometimes crazy questions that we might throw his way. Thank you but I'll make sure that uh Mel gets those kind words and thoughts if he's not still on and I want to reassure you I will do my best to support the board. Super thank you and Mel says thank you he's relishing in the thoughts so thank you for the kind words and and uh Chair Chair Mullen we're not letting uh Dr. Boynton off the hook entirely uh we are using him again as we're trying to drive the efficient and effective operation of our growing medical group um you know what what Dr. Boynton has done with the Vermont orthopedic clinic is a great model of effectiveness and efficiency and throughput and taking care of patients and doing it in a very effective manner and so we are looking at that we're also looking at the cost of care and Dr. Boynton has been been working very closely with Judy Fox and so forth where we're trying to get a better um cost accounting type uh data system so that we can now look at all the uh inputs of the cost of care and try to make sure we're driving that so uh the the role has gotten too big and and Dr. Boynton is also a full-time orthopedic surgeon with a very busy practice so we've kind of bifurcated his responsibilities had him focus on the uh so he is still having some uh senior leadership and and uh operational focus here so you you can pull you can pull him back if you need to have him testify again too along with Dr. Gregory. Super and Claudio that kind of leads into my next question because um I guess it was four years ago that you came in not you but your predecessor came in um seeking the CON for the new building which is now the Hube and I was curious if um the efficiencies that um were um being offered at that time as far as um bringing um practices into um own space rather than lease space the efficiencies of having better designed um rooms for patient care and things like that have they been realized and are things going well with that new building? Uh yes they are I was um you know I was a little bit concerned I wasn't in on the design part of it but it increases a lot of space and so when you look at like the Vermont orthopedic clinic they did an amazing job transferring from a very compressed space to a lot larger space they literally did the transition um in a weekend they they closed the clinic for like a Friday and the following Monday or Tuesday they were back up and seeing patients and they quickly redesigned their care processes and so forth to be very effective and efficient um and the other so I would say yes um we don't have on the top floor we don't and it's also benefited from integrating our physical medicine clinic and service co-locating that in with the Vermont orthopedic clinic so there's been some benefit there and uh the the other thing is on the top floor of the clinic where we have our uh ENT service um we could be busier up there we have two open positions for ENT specialists that we've been recruiting very heavily on and don't have those filled so um it's not it's not by the design of the facility I think it's because we haven't been able to replace some retiring folks there but we've also been able to reallocate get out of some leased space that we have and reconfigure some of the administrative space so we're cutting down some of that overhead on lease so it it is working as intended and Betsy I want to say that we share something in common I too was born at Rutland back when it was Rutland hospital and I'll tell you that I'm probably a little older than you so um my parents always refer to it as he was born at the new Rutland hospital but when you look at your age of plant and see that it's above all your peers it just shows you how old I am when it's now uh in that situation and Claudio my my statement here is more as a concern of a of a community member than as a board member um because I want that hospital to be around until I pass away as well and I look at the last several years and this isn't something new that I I've been harping on but your expenses grow faster than your revenues and um you know I I look at that growth from 266 to 290 almost 9% and I know that you're facing some pretty tough situations but you also have the disadvantages I get to see all the positive things and all the the blemishes as well so I do worry at times when I see the swag or the community sponsored events or you know things like a retention bonuses I know that that the frontline staff needed I'm not so sure that the administration needed it but I get it um every single position is important to the operation and I know you have to do what you have to do but and you know when I talk to community members including doctors at Rutland Regional they all kind of refer to Judy as the Grinch and and I think she's doing her best to keep those expenses from growing but they're still growing faster than what is sustainable for the organization so just just want to throw that out there because I do care about the hospital that I go to and I want to make sure that you're around for a long time and I know that it's it's very hard making expense reductions but I think it's something that you always have to continue to work on and Betsy you talked a lot about the efforts that you've done as far as recruitment and retention and one of the small pieces I noticed recently was allowing those that were in the defined benefit pension to continue working and still be able to draw down on the pension did you get any take up on that was that a successful tool Judy I'll kick that to you I'm not I'm not aware of any of the the retention from the payment is that what you're referring to no Judy I I saw an email that went out that said that now someone who was eligible for the old defined benefit could continue working and still start to draw down so it's basically a move geared towards retaining some of those older employees and I was just wondering if there was any success from that at all because it might be something that others could learn from yeah so we did that because there was a request of a couple of individuals and so I can't tell you it was significant but certainly we had a handful of individuals who had retired wanted to come back work on a per diem basis and this allowed that to happen so good I mean it's nibbling around the edges but anything that we can do for the workforce it's just I've never seen a workforce crisis like the one that we're in now and Claudio really nailed it on the head when he talked about how other businesses could reduce hours or you know reduce services but you can't so that's something that I know you continue to try to innovate on but it's something that unfortunately you're going to be working on for several years to come and and so you know I look at your days cash on hands are good your your days receivable are very well managed you know you're I do have concerns when you don't budget for a better margin but I think you're doing the right thing unlike my colleague I don't think 3 3.6 percent is a low charge increase but it's low compared to your peers this year and so that I guess we can be thankful for but that was really it I just wanted to get out there that you know every year we still see expenses growing faster than what your revenue is and and over time that's not a sustainable path and and so I'll just have that on the record at this point I'll turn over the the questioning to the healthcare advocate. Good afternoon everyone and I will start in the morning now or in the afternoon just wanted to thank Rutland for all the work you've done and continue to do for Vermonters during the COVID-19 pandemic particularly during this recent surge and uncertainty with the Delta variant. I also want to highlight and commend Rutland for hiring a population health director and their collaboration with the community-driven approaches you mentioned. I think it's important for addressing structural determinants of health lines of Vermont's blueprint for health. As I mentioned briefly and I'll try to keep my questions brief because I know we're close on time obviously there's disproportionate impact of BIPOC Vermonters with COVID so a lot of our questions as we submitted in the pre-hearing memo that we submitted have a racial equity focus so with that our first question is how much funding in your current and future budget has been allocated to DEI and racial equity focus projects trainings or collaborations? Thanks. Thanks Sam. Betsy do you want to take that or Judy? So I think in previous years we've budgeted for certain consulting fees around 25,000-ish but I will say that all of our leaders and staff have participated in implicit bias training throughout the this past year and the previous year additionally we also have cultural competency education built into all of our orientation materials as well as our rapid regulatory which is our required annual education. Thanks. Do you have a sense of what percentage of staff and administrative leaders have completed those trainings? So I would say about 100% of leaders have completed the implicit bias training and it's probably equal or close to that with with all staff giving take it you know per diems in those types of employees. Okay thanks. What percentage of staff would you I guess I'll just jump around here I don't know we're close on time. What languages are you're just switching over to patient satisfaction? What languages are your patient satisfaction surveys available in and do you collect race or ethnicity data as a part of the survey? Sure so we do collect race information we're in the process of implementing collecting ethnicity information we use Prescani as our vendor currently all of our patient satisfaction surveys are sent in English but we do have the capability in working with Prescani to have it available in 52 languages and we're working on how we collect that information in the registration process and how to funnel it to Prescani so they send the appropriate survey. Okay thank you. Last question with some topics a little bit. We did notice a drop in the ratio of free care to over GPCR from 1.22 in 2019 to 0.74 in 2021 projected so we know this analysis accounts for an overall decrease in utilization so I'm just wondering what do you think drove this trend and were there any issues with patient's ability to utilize free care during the COVID shutdown? Yes so that is nearly a change in practice and that's related to the revenue recognition standard that we talked about earlier where we've reclassed any free care or bad debt related to encounters that have an insurance so what you're seeing in the free care and bad debt amounts now are just truly individuals without any payment source so truly self-pay and in terms of free care we did everything within our power to keep communication open with our patients which included sending free care apps to all uninsured individuals. We looked at individuals who had high copays and deductibles, sent applications to them. We also extended for a period of five months the free care application where they could apply and had no time limits to the number of claims and the aging of those claims that would be considered for free care. Thank you there's all my questions back to you Jeremiah. Thank you Sam. Next we're going to go to public comment. Is there any public comment on the RMC budget hearing from any member of the public? Hearing none I want to thank the four of you for a very thorough presentation and we really appreciate everything that you are doing and will do in the future and and Claudio I do want to say that I was proud to see that Rutland was always at the forefront of the numbers of the the vaccination rates and the operation that you set up at the Holiday Inn was truly impressive and let's hope that we're going to reap some rewards from that those efforts and we won't see what happened in some of the other states quite as severe here. So thank you all and with that I'm going to put the Green Mountain Care Board meeting into recess until 145 when we will take up the NRVH budget. Thank you everyone have a good lunch. Thank you. Good to see you all.