UVM Medical Center president outlines operational response after steep rate cuts, warns specialty services need regional volume

Steve Leffler, president of UVM Medical Center, testified to the House Committee on Health Care on Jan. 16 about how the medical center is responding to large commercial-rate reductions and broader affordability goals.

Leffler said UVM completed a Blue Cross contract and that combined actions last year produced an overall commercial-rate reduction for the medical center (which he described as a roughly 12% reduction once legislative and board actions are combined). "The next step and now the really hard work is aligning our expense base with our lower revenue," Leffler told the committee, adding that UVM is working to protect quality and access while reducing costs.

On quality, Leffler attributed part of the hospital's drop in CMS ratings to pandemic-era workforce changes that included retirements and reliance on traveling staff. "We lost a lot of very senior people who were able to retire," he said, and noted the system has implemented leadership rounds, more bedside training and targeted "back to basics" programs to improve care processes.

Leffler described acute access pressures in specialty areas: until about 2023 UVM had one 3T MRI and wait times grew; even after the board approved a second machine, demand continued to rise. He said UVM is at about 95% occupancy and often has more than 10 patients waiting in the emergency department for inpatient beds.

On workforce, Leffler said UVM has added roughly 80 new providers since September and is investing in training and productivity improvements, but acknowledged younger, less-experienced staff and higher patient acuity make recovery of prior performance challenging.

Leffler emphasized the interdependence of regional volume and specialty services. "UVM Medical Center cannot take care of everyone in Vermont," he said, arguing that out-of-state patients (for example, from Upstate New York) sustain volume for high-end services such as NICU, heart surgery and neurosurgery; losing that volume could raise per-case costs or cause services to shrink.

On finances, Leffler said long-term financial health generally requires a modest operating margin (he cited a 3% target used by finance teams) but that UVM has temporarily reduced its margin target to 1% for this year and is pursuing expense and productivity measures to meet that target without cutting patient services.

Why it matters: Leffler's testimony frames how a major academic medical center plans to respond operationally to regulatory and legislative cost-containment measures and where trade-offs between affordability and access might appear.

Next steps: Leffler said UVM will continue to work with regulators, the GMC and legislators on productivity, shared services and the implementation of policy changes such as site-neutral proposals and reference-based pricing.