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FROM RED TO BLACK: North Country Hospital lays out a plan to battle financial problems.

August 30, 2012

North Country Hospital CEO and President Claudio Fort. Courtesy Photo

NEWPORT – North Country Hospital (NCH) is now feeling the economic pinch like many other medical providers.
When the economy first began struggling a few years ago, a number of companies were forced to lay off workers and make other difficult decisions, but health care fared well through the storm. Now the tough times are catching up and hospitals are feeling it too.
But according to CEO and President Claudio Fort, NCH has plans to bring the facility back into the black.
Last fiscal year, the hospital came from behind and broke even, but this year it’s about $1-million behind and the fiscal year ends Sept. 30. Fort said the hospital could still end in the black, however.
In a recent interview, Fort characterized the situation as concerning and challenging, but he spoke optimistically about the plan in the works.
The hospital needs to make a profit in order to reinvest in new equipment, Fort explained. The financial struggles are not a reason for alarm however, he said. A new budget has the hospital making a profit next fiscal year.
The hospital is working on a variety of ways to deal with finances. One way is through labor management. NCH employs more than 600 workers and may have to cut back on hiring new people. The hospital is not considering lay-offs, and that action would be a last resort, said Fort.
If the hospital continues to struggle in the future, it would possibly consider not hiring and see a reduction in force through attrition. The facility is also in line to receive a variety of one-time payments that will help alleviate the burden.
For example, the hospital invested about $3-million into a computer system. If the investment was not made, the hospital would face fines. But the federal government is going to pay NCH $1.4 million for the system.
NCH does not want to burden the local community by raising its rates too much. Among Vermont hospitals, NCH submitted the third lowest rate increase to the state at 4.6 percent. The average is an 8.2 percent increase.
The clinicians in management at the hospital are focused on patients, however finances are now part of the plan, Fort said.
Currently the hospital is looking into participating in an Accountable Care Organization (ACO), specifically One Care Vermont, formed by Fletcher Allen and Dartmouth for Medicare patients. Joining the ACO is voluntary. Participating hospitals are given a set amount of money to work with to keep people healthy. For the first three years, there is no risk, Fort said. If the hospital does not meet the target, it will get paid; it if does better than the target, there is a financial gain. And the hospital could leave anytime without penalty if it chooses to do so.
One Care will be operated and funded by Fletcher Allen Health Care and Dartmouth Hitchcock Health.
The joint venture would improve communications between hospitals and prevent duplication of services, with a goal of providing the right care at the right time, Fort said.
NCH already works closely with Fletcher Allen and Dartmouth, but in an informal way, Fort explained. Under the new plan, the relationship would be formalized.
In a letter to the editor, Doctor Les Lockridge of Newport said that he suspects the hospital is heading for a takeover from one of the major medical centers due to NCH' financial situation, among other reasons. He expressed concern for the area if that occurs.
But Fort does not see it that way. He sees joining as a benefit with no risk.
As for the future: The hospital now has two full-time orthopedic surgeons, which brings patients to the hospital who would have travelled out of the area for needed treatment. There are also now two sleep doctors. NCH is in a partnership with the Northern Vermont Regional Hospital in St Johnsbury on sleep issues. The NCH doctors travel to St Johnsbury to provide the treatment.
NCH has plans to add more services if possible and has identified some areas where new services are needed, such as dermatology.

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