BURLINGTON, Vt. (WCAX) – The University of Vermont Medical Center is spending up to $15 million to improve access, affordability and quality of care. The order comes after regulators found the hospital made $80 million of unbudgeted patient revenue in 2023.
The Green Mountain Care Board said the $80 million of unbudgeted patient revenue resulted in higher premiums for Vermonters in 2023.
In April 2025, they brought in professional “fixer” and former Vermont Agency of Human Services Secretary Mike Smith to oversee the hospital management’s work in an effort to bring down the cost of health care at Vermont’s largest hospital.
“Bottom line, they need to be more affordable. They need to bring down the cost of care in their organization. It’s as simple as that,” said Smith.
Smith was previously hired to fix Vermont’s State University system and by Fairpoint Communications, which was facing bankruptcy. Now, he’s trying to mend the trust between Vermont and its largest hospital.
“They have a role to play here, and it’s a role that, you know, is bigger than just running an institution. They must meet the needs of Vermonters out there,” said Smith.
Studies show Vermonters spend more of their income on health insurance than residents of any other state.
UVMMC President Dr. Stephen Leffler believes it’s because of the state’s older population. Low-income and senior Vermonters use state-sponsored health care, which reimburses care at lower rates. The hospital, in turn, makes those who use commercial insurance pay the difference.
“We don’t have enough people to spread that cost shift out to like in other places, which makes our premiums go up higher than other places,” Leffler said.
GMCB officials disagree. They say it’s because the hospital’s expenses are out of control. Smith has consulted UVMMC on how to cut costs. So far, they’ve eliminated $8 million in administrative overhead and found savings in supplies and testing.
“Working with our commercial insurer, Blue Cross Blue Shield, we cut our charges to the insurance company across the board by at least 12.3% for everything we do,” Leffler said.
Those new charges went into effect on Jan. 1, the same date that a new state law limited the hospital’s infusion drug prices.
“We’re trying to figure this out right now. We’re working really hard on it. There’s even more change coming on top of it, so it feels like it’s cascading a little bit,” Leffler said.
He says he doesn’t know what all these changes will mean for the hospital’s future finances, but he promises no service cuts are coming in 2026.
“We appreciate the great work the liaison team is doing. They’ve been helpful to us,” Leffler said.
Smith and his team say they’re now focusing on improving the hospital’s quality of care. They plan to wrap up their consulting in the fall. Whether or not premiums will go down is still uncertain.
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