BRATTLEBORO-Much of Windham County depends for its health care services on Brattleboro Memorial Hospital (BMH), which has been weathering what already was a financial crisis.
And then everything changed on July 3, when Congress passed the One Big Beautiful Bill Act.
The bill, which President Donald Trump signed into law on July 4, may cause some 45,000 people in Vermont to lose their health insurance over the next several years, according to initial estimates from the Vermont Agency of Human Services.
And one academic health-care policy study predicts that two other hospitals just over the Vermont state border - one in New Hampshire and the other in Massachusetts - are at risk of closing as a result of the new law.
"I don't know what to say, except this bill is vicious, and it does, I believe, disproportionately affect rural community hospitals," said Christopher J. Dougherty, president and CEO of BMH. "And rural community hospitals don't need any more help to create challenging financial times. It's there already."
Rural hospitals mean a great deal to their communities, and BMH is no exception.
"This is not just a hospital," Dougherty said. "We're also the largest employer in this community, so we add to the economics of this community."
And for people looking to move to the Brattleboro region, "they want a hospital close by," he continued. "They want an emergency room. If they're of childbearing ages, they want labor and delivery rooms."
Dougherty believes that rural hospitals "are the bedrocks of rural communities - not just as a hospital, but also really as an economic driver."
As vital as they may be, America's rural hospitals are struggling financially. The reasons are complex, but they include everything from the constantly rising costs of health insurance, pharmaceuticals, and staffing to the meager reimbursement the federal government offers for Medicaid and Medicare patient services.
Yet on July 3, Congress passed the One Big Beautiful Bill Act, which, according to the Congressional Budget Office's latest cost estimates, will reduce federal Medicaid spending by $793 billion and increase the number of uninsured people by 7.8 million, according to an analysis from KFF, formerly the Kaiser Family Foundation, which describes itself as an "independent source for health policy research, polling, and news."
The federal program distributes money to states to administer as benefits for residents who qualify, based on family income or disability status. The funds subsidize some or all medical costs for a variety of needs.
Medicaid dollars don't go directly into the pockets of individuals. Rather, the program funds initiatives like Dr. Dynasaur, which supports Vermont children from prenatal care for the mother to a child's teen years. Medicaid covers long-term care, supports people with disabilities, prescription assistance, and other programs.
The program has been highly politicized, Dougherty said.
"I don't think the decisions that are being made are based on facts," he said. "One of the things that is claimed - and I want to say 'claimed' - is that there's all this fraud in Medicaid, $700 billion worth of fraud. I'm sorry, I don't believe that's even possible."
Proponents of the legislation have "tried to take a narrative that this is all about fraud and waste, but I think it's all about the most vulnerable among us," Dougherty said.
Meanwhile, the legislation is not only an attack on them. It's "also going to destabilize hospitals, especially rural community hospitals," he observed.
Michael Del Trecco, the president and CEO of the Vermont Association of Hospitals and Health Systems (VAHHS), told The Commons that the sharp cuts to Medicaid coverage in Vermont would challenge the entire health care system.
"First, it would be very problematic for individuals and their families," said Del Trecco, whose private, member-owned organization is devoted to "improving the health status of communities throughout Vermont," according to its website.
"And then, second, generally speaking, there are funding mechanisms in the state that would jeopardize organizations' abilities to care for and treat people," Del Trecco continued. "We need to be paid sufficiently to manage our operations while we engage in all of the operational efficiency opportunities that are in front of us. It's a very difficult, continuous situation."
Hospitals face 'strong financial headwinds'
Like most rural hospitals, BMH is already struggling financially; it recently cut six administrative posts as part of an effort to reduce its $119 million annual budget by $4 million without reducing patient services.
Medicaid represents about 20% of BMH's volume and 15% of its revenue, according to Dougherty.
"We are extremely concerned about the impact of the One Big Beautiful Bill Act on BMH for a number of reasons," Dougherty said.
First, "all Vermont hospitals are already facing very strong financial headwinds," he explained. "This bill will make massive cuts to Medicaid. It is estimated that Vermont hospitals will lose $1.7 billion in federal health care funding over the next decade."
BMH will face reduced Medicaid reimbursements, loss of coverage for low-income patients, and an increased uncompensated care burden, he said.
Another complication from the bill is that it would reduce BMH's provider tax - a $6.6 million burden - by 0.5% each year. While that reduction is welcome, it also means that the state Medicaid program will lose funding from each hospital's provider tax and the federal matching program for the tax payments.
"This is a substantial amount of funding, and it will have to be made up for somewhere," he said.
The act does have funds for rural hospitals, clinics, and opioid treatment programs, Dougherty said, but "while these funds will offer the potential for some short-term assistance, the bill does not compensate for the long-term financial damage caused by the Medicaid reductions. This bill exacerbates an already tenuous situation."
Small hospitals may face staff layoffs, service eliminations and, in the worst cases, complete closure.
Becker's Hospital Review, a media source for health care decision-makers, estimates that 760 hospitals nationally will be at risk of closure.
It predicts that in Vermont, eight hospitals will be at risk of closing and one is at immediate risk of closing in the next two to three years.
Becker's reported that across the U.S., 16.1 million people living in rural communities are covered by Medicaid. In nine states, over 50% of the Medicaid population lives in rural communities in Montana, South Dakota, Wyoming, Mississippi, Vermont, Kentucky, North Dakota, Alaska, and Maine. Approximately 47% of rural births in the U.S. are covered by Medicaid.
Since approximately 65% of nursing home residents in rural areas are covered by Medicaid, it also makes no sense to say that a Medicaid recipient should just get a job and pay for private insurance.
Yet Speaker of the House of Representatives Mike Johnson, a Louisiana Republican, said on May 25 on CBS's Face the Nation, "If you are able to work and you refuse to do so, you are defrauding the system."
According to a letter sent by U.S. Sen. Ed Markey, D-Mass., to Trump, Johnson, and Senate Majority Leader John Thune, R-S.D., "Addressing the crisis in rural health care access is a national, bipartisan priority, and it should be bipartisan to not worsen it. However, if your party passes these health care cuts into law, Americans in rural communities across the country risk losing health care services and jobs supported by their local hospitals."
Markey appended a detailed list naming all the hospitals he estimates will have to close their doors if and when they lose Medicaid reimbursement, citing an analysis by Cecil G. Sheps Center for Health Services Research at the University of North Carolina.
Among them are two nearby hospitals - Baystate Franklin Medical Center in Greenfield, Massachusetts, and Cheshire Medical Center in Keene, New Hampshire.
Fighting for survival
According to Owen Foster, the president of the Green Mountain Care Board, which regulates hospital budgets in the state, all Vermont hospitals are fighting for survival in one way or another. He paints a bleak picture.
In most (though not all) of the state's hospitals, "you have a number of challenges all at the same time, and one is deteriorating hospital finances across the state," Foster said. "And Brattleboro is one that is facing those challenges right now."
At the same time, "you also have some of the highest commercial health care costs in the country," he continued. "And you have no capacity for your patients and your small businesses or your business community to pay more in health care costs. We've maxed out our health care costs for our people."
It's difficult, he said, for hospital finances to rebound in Vermont with no capacity to increase commercial prices.
"You've probably seen the headlines that the commercial insurance costs have been going up [10 to 15%] every single year for the last several years," Foster said. "Right now, Blue Cross is requesting a 23% rate increase for the individual group insurance market. But people can't afford to pay 23% more. If people can't afford to pay 23% more, they can't afford to pay BMH higher prices to solve the financial challenges they have."
In addition, the coming federal changes to Medicaid will have a large impact.
"If you have uninsured people, it often results in bad debt or free care," Foster said. "And the subsidies for the qualified health plans change, which could also limit the number of people on commercial insurance."
Even before the bill, Blue Cross Blue Shield has been threatening bankruptcy.
"The insurer finances are probably more challenged and strained right now than any hospital financials," Foster said. "Blue Cross Blue Shield has been put under incredible financial stress in the last year. Their reserves have been significantly depleted, so they have no money to pay out, either. And that's a challenge. There's really nowhere to get more money."
All these things combine to put a significant strain on hospital finances, Foster said.
"So the long and short of it is there's really no horizon that we see where there's a significant financial injection to solve for the financial challenges people have," he said.
Cutting costs
Dougherty took on the job of running BMH three years ago. According to Foster, he is the right man for the job.
"Brattleboro has had a tough year," Foster said. "There's no question about it. But I'm not alarmed, more than I am for any other number of hospitals in Vermont that have challenging financials.
"Part of it is that I'm very supportive of the work that Chris Dougherty is doing. And I think it's done with the greatest of intention to make sure that Brattleboro Memorial Hospital is there to serve the community in the years ahead. They're taking a lot of really important steps to try and address their challenges."
Del Trecco, of the VAHHS, said Dougherty is dedicated to making sure BMH is "there today and in the future" and believes in budget-cutting and looking for operational efficiencies both in clinical and nonclinical services.
"The work is not easy and often communities can be concerned, as they rightly should be," he continued. "But we need to make sure we do this work together. For Chris and his team, the goal was to make sure BMH is viable and there for years to come, and I think he's doing a really great job."
Two terrible things can happen to hospitals, Dougherty said, and one of them has already happened to BMH: staff cuts.
Dougherty said it was painful to cut the six administrative positions, putting "great people" out of a job.
"It's not something we're proud of," he said. "It's not something we're excited about. We're really sad about any type of layoff."
The other terrible thing would be closing all or a part of the hospital. Copley Hospital in Morrisville is closing its birthing center because of unsustainable long-term costs and declining birth rates across the region, he said.
"We're saying we're not going to do something like that," Dougherty said. "I've got to tell you, we're fighting to say 'We can't go that route.' We've got to do everything up to the point of eliminating a service. It would be devastating to this community to eliminate any of our services. So we're looking at everything else possible short of that.
"Closure, in our mind, is absolutely not an option, and everything needs to be done to reinvent, because there's always a fork in the road; it's either closure or reinvention," he continued.
As an example, Dougherty cited Blockbuster Video, which had almost 9,100 locations in 2004. After the rise of streaming video and a string of corporate bankruptcies over the years, all that remains is one lone independently owned franchise in Oregon.
"They didn't change who they were and what they were doing, and they ended up closing," Dougherty said. "In contrast, if you look at Netflix, they started out by just emailing DVDs. And look at what they've done. They've revolutionized streaming and things like that, because they reinvented themselves.
"This is what we're doing. Unfortunately, some of that reinvention is painful. We have to become more cost efficient and more streamlined, and that's where those layoffs came to be," he continued.
Everyone deserves treatment
Vermont law states that hospitals have to serve everyone who "walks in the door," Doughtery said. That means treating people who have insurance as well as people who don't.
And BMH would do that even without the law, according to Dougherty. But add a flood of now-uninsured former Medicaid patients to those already walking in the door of the Emergency Department, and the finances get tricky.
"Somebody has to pay for it," Doughtery said. "The question is who. [...] Well, if it's the hospitals, we're struggling already. We don't need any help to struggle more. We need help in getting out of this. [The One Big Beautiful Bill Act] doesn't help us get out of this."
Until July 1, BMH contracted with Cheshire Medical Center, which "has been staffing our emergency room and doing a tremendous job for quite some time," Dougherty said. "They have decided that they can no longer extend that coverage to us." A new provider, BlueWater Health, of Maine, has taken over.
Emergency department staff already live and work in the BMH area, but they now work for BlueWater instead of Cheshire.
Sometimes, the department has more patients than it can safely handle.
"This last week, we've been in what is called a surge mode," Dougherty said, meaning that patients in the emergency department exceeded the number of rooms.
"So it's not necessarily a staffing problem. Part of the problem is the flow of patients. Last week, for example, we were having days with eight to 10 mental health patients that we couldn't move out of the emergency room. It wasn't safe for them to just be discharged home," he said.
"So then trying to find the right place for them to go to is a problem, not just at BMH, but in every hospital. We're not mental health experts. We can't do a whole lot for them, but there was nowhere else for them to go.
On a recent morning, "we were close to being at surge, but we had some patients who could get to long-term care facilities, or even admitted to our hospital," Dougherty said.
The future
What the area lacks most is primary care, but a private practice is expensive to open and to operate. Dougherty said that BMH is working to expand primary care in the county.
"There's a federal program that Sen. Bernie Sanders is incredibly supportive of, and it's called the Federally Qualified Health Center system," Dougherty said. "There are several around. Actually, every county in Vermont has a federally qualified health center except Windham County."
Before Dougherty arrived in 2022, Sanders got "some congressionally designated funds to build a federally qualified health center in Windham County. He wants a Federally Qualified Health center in every county in Vermont. So we're embracing that."
Hospitals cannot be federally qualified health centers, which provide primary care, dental care, and outpatient mental health care.
"So the closest one in Vermont is in Springfield," Dougherty said. "There's also a close one in Massachusetts [in Greenfield]. We're hoping one of them will actually work with us to build a federally qualified health center here and provide those three key things that we need desperately in this community."
The beauty of the federally qualified health centers is that they focus on taking care of Medicaid patients and uninsured patients first and foremost.
"So everybody has access to primary care, dental care, and outpatient mental health services," Dougherty said.
"We're also working with the Brattleboro Retreat to provide the outpatient mental health services," he continued. "Our hope is that maybe as soon as January, we will actually have a federally qualified health center here at Brattleboro. It may be on campus. It may be in three separate sites."
No single 'magic tactic'
In response to the potential of a significant federal cutback in Medicaid, the state has been looking for ways to enhance the Medicaid program, Dougherty said.
"Let's give a little credit to the state," Dougherty said. "The state is actually looking at ways of enhancing the Medicaid program, I think because of these concerns of what's happening with federal dollars."
The Green Mountain Care Board and the Agency of Human Services are exploring a hospital global budgeting payment for 2026, which will transition hospitals from fee-for-service to a fixed amount to cover a defined set of services. Dougherty said that BMH is "evaluating this."
"It may be this is a good way to approach Medicaid and to prepare us for the future of the way health care is going to be reimbursed," he said.
"We met with them once to talk about their hospital global budgeting program for Medicaid. We have until October to volunteer to be in that program come Jan. 1. And we may very well want to do that," said Dougherty, who called it a "win-win."
"It would be good for the state because it gives them a very specific way of administering the Medicaid program. But it may also be good for us and our community, because it gives us sort of a fixed income for our Medicaid patients," said Dougherty, adding that the program could become mandatory by 2030.
Doughtery said he also had "about 40 other tactics" he was exploring to cut costs and reduce his budget.
"I wish I could tell you there was one magic tactic that gets us right to where we want to be, but there isn't," he said. "So we're trying everything. And some are small and some are large. Some have no impact on staff, basically, and some have."
What BMH desperately wants to do is avoid cutting any medical services.
"We don't want that to happen," Dougherty said.
According to Foster at the Green Mountain Care Board, there is enough money in the health care system to provide a high-caliber, high-quality system.
"The problem is that we have a system that doesn't work well and doesn't function well," he said. "We don't have many low-cost providers in the state, and we need to make sure that we have those available. Those are often small practices. They are primary care practices, independent practices, generally. Those are the most expensive place to provide care.
"Vermont, as compared to other states, has overwhelmingly concentrated our care at hospitals. And that's not a recipe for sustainability."
The state needs more telemedicine, Foster said. It needs to consolidate some services. It needs to reduce discretionary spending. It needs to encourage and support smaller, more affordable practices.
Closing BMH 'not an option'
Could BMH go under?
"I dearly hope not," Foster said. "There are some really good people there and some really good providers, and they're really important to the community."
Foster said that "a lot of Vermont's challenges are things that we've seen across the country. There have been rural hospital closures by the hundreds across the nation. We've had no hospital closures in Vermont."
"Rural hospital markets have been decimated across the country. In Vermont, we have not yet had that," he continued. "A big part of it is a lot of people working really hard, but also the commercial market subsidizing prices."
He added that "there's always risk to any small rural hospital in America, and Vermont is certainly not immune to that, especially given the potential federal changes and the realities at Blue Cross Blue Shield, and with our people's inability to pay more in health care costs."
For Dougherty, closing BMH is not an option.
"BMH is fighting," he said. "We actually do need to be a less expensive hospital than we are. And we are going to do everything necessary to keep this treasured resource in this community."
Dougherty said that hospital leadership knows "that some of those things are going to be painful, and we've started on some of those things that are painful, like reductions in force. But I do believe there are some things that really are very much glimmers of hope."
One glimmer of hope is new revenue enhancement, and Dougherty points to BMH's new, faster magnetic resonance imaging machine to replace a 17-year-old device that "was way beyond years of obsolescence."
"We invested in that MRI because it generates a revenue for us," he said. "This new MRI is a good thing for our community."
"We are trying to think way out of the box and try and find other revenue streams," Dougherty said. "There has to be hope."
This News item by Joyce Marcel was written for The Commons.