Randolph hospital ‘makes’ budget, operating margin
RANDOLPH – In a feat that has not been replicated by any other hospital in Vermont, Gifford Medical Center announced that it has achieved its state approved operating margin for the 15th straight year, by managing its expenses and the budget process. In a “reality TV” video announcement sent to staff on Monday, November 3 (see video here), President Joseph Woodin and CFO Jeff Hebert announced what auditors have confirmed – Gifford closed the books with a 3.2% margin for the 2014 fiscal year.
“This is all thanks to the hard work and dedication of our staff,” said Woodin. “Without their diligent focus, always trying to manage quality and costs, we would not be able to have accomplished this.”
An operating margin is the money the medical center makes above expenses – needed to reinvest in programs, staff and facilities. Sixteen years ago, Gifford ended the fiscal year with a negative 16% margin ($2.9 million loss), after having lost money 4 out of 5 years. At that time, the future of the hospital was uncertain, with some state officials even asking if the hospital should be closed.
Today, Gifford is known as one of the most successful and innovative hospital and health care organizations in New England. They are designated a CAH (Critical Access Hospital), as well as an FQHC (Federally Qualified Health Center); one of only three in the nation to carry that dual designation. They also operate a nursing home (Menig) that is rated one of the top 1% in U.S., and are currently constructing the first phase of a five-phase senior living community in Randolph Center, VT.
Consistently achieving the operating margin can be an indicator of an organization’s success. Despite record shortfalls in revenue for Vermont hospitals, including Gifford, Woodin noted the medical center was able to make up for revenue shortfalls through managing expenses and due to support from federal programs like 340B, a drug pricing program that in part generates revenue when Gifford patients fill non-generic, non-narcotic prescriptions at participating pharmacies.
“This news is exciting for Gifford and for the community,” said Woodin. “It is an indicator of Gifford’s health as a medical center, community organization, and employer. Primarily it means we’re stable, and we’re able to provide consistent care and services without facing cuts and uncertainty.” The achievement is especially remarkable within the current economic climate and amid so many changes in health care, hospital officials also noted.
