A few years ago, Copley Health Systems had a problem that just about any business would be glad to have: It was doing too well.
Now, it’s new CEO Joe Woodin’s job to make it, well, better.
Woodin said the financial operations of small hospitals in Vermont are difficult, because their nonprofit status puts a ceiling on how much revenue they can bring in.
That was a problem for Copley, which drew increasing interest in the things that set it apart from other hospitals, such as its orthopedic surgery offerings and its highly successful birthing center. It brought in too much revenue in 2015, was forced to cut back, and has been operating at a steadily growing loss ever since.
“We all struggle together with the nonprofit models,” Woodin said in an interview, a long and wide-ranging conversation that touched on myriad topics.
Between the Green Mountain Care Board approving hospitals’ rate increases and affordable care organization OneCare keeping tabs on performance metrics, a Vermont hospital has to find a way to work between the lines.
“One of the constructs that we have is that you want to just cap, and then limit, gross revenue,” he said. “In that model, if you become successful in offering more services, and people don't have to travel as far, or if you gain reputation and a name for yourself in regards to when you do something, you all of a sudden start to have a problem because it looks like it's growing beyond that gross revenue cap.”
The nitty gritty
For someone who’s been on the job only a few months, Woodin is able to see Copley both as a place populated by people and as numbers on spreadsheets and graphs.
During the interview, he switched between talking about people like Denise the nurse — who still wears the traditional white nurse uniform, complete with the deaconess nurse’s cap — to talking about financial reports going back five years and going forward into some indeterminable future.
“Running charts over time. It’s my favorite,” he said.
He also talks about the sand and salt problem in the back parking lot.
Much praise has been lavished upon the hospital’s surgical suite, which was completed in 2017 at a cost of $12 million. It was bright and shiny, clean and sleek, thoroughly modern. But projects like that can also have a tendency to make the rest of the property look downright drab.
“You may take 50 percent of the facility and do this great redo, and it looks lovely, but then the other 50 percent feels like it doesn't even fit. That happens a lot in hospitals,” he said. “A lot of the things behind the scenes aren’t sexy, and they become more difficult to work around.”
Which takes us around to the back of the main hospital building, to the back parking area and the exit that takes a person leaving the hospital on a long scenic route of, well, the backside of a hospital — Dumpsters, HVAC ducts, loading docks.
And in the winter, that means lots of dirt and sand to help mitigate the ice and snow. Woodin said the materials have corroded the metal door, and the people who go through that door inevitably track in that dirt and salt on their boots.
So, while he and his support staff have to keep an eye on Copley’s surgical offerings, and another on the financial reports, it would be good if someone came up with a solution to the hospital’s posterior.
“Little things,” he said. “If you’re cleaning the floors, you wish someone had thought of that.”
Woodin’s resume includes stints at Gifford Medical and Central Vermont medical centers. It probably doesn’t mention Dunkin’ Donuts, but that’s where he worked more than 25 years ago, cleaning the floors and tidying up after the bakers. He said it instilled in him “an appreciation for dirty work,” and it’s a viewpoint he holds on to even as his professional garb is more coat and tie than apron and rubber gloves.
“I spent a lot of time on my hands and knees with a scraper,” he said. “I started with those types of jobs, and I think it's made me a better person because what we're doing is hard to maintain. It's expensive.”
It doesn’t get much dirtier than hospital laundry, another component of an institution that quietly operates in the background, overlooked until it’s broken. That’s what happened last summer when the laundry service that several Vermont hospitals contracted with abruptly went out of business, leaving its clients in the lurch.
Copley installed a mobile laundromat, essentially a well-ventilated trailer with washing machines, dryers, folding stations and sinks. Staff took turns on laundry duty, in addition to their regular jobs, and one that can get a little gross — hospital linens get all manner of human matter on them.
Copley has since been able to secure another laundry service, but Woodin said there was some talk about actually keeping the trailer and starting an in-house laundry service for other places in the community. The staff wasn’t able to make that work, but Woodin points to that mindset as one you might not find in a larger institution.
“I think the spirit of the folks at Copley is people pitch in, they care about each other, they'll be flexible,” he said. “And so, with something dramatic as that, they were creative and they figured it out.”
Woodin wasn’t hired to take care of the laundry and salt the driveway. He wants to make sure Copley gets as much financial support from the state as it can, and he wants to make sure that money is spent wisely.
The first part of that happened right around the time he came on board as CEO, a nearly 10 percent rate increase approved by the Green Mountain Care Board, the full request that was pitched by the interim CEO, Jeff White.
Woodin’s full-time predecessor, Art Mathisen, left last spring as Copley’s financial sheets were showing more and more red.
“We got that increase, I think, because we put forth a pretty decent argument of really having some of the lowest rate increases in the state for years, if not a decade,” Woodin said.
The second part is going to take a lot more work. Copley has been going further into deficit year after year, following a $4 million surplus in fiscal year 2015 that forced the Green Mountain Care Board to curb its rate increases. Last year, Copley lost $2.3 million.
Part of the financial path out means simply being more conservative in fiscal operations.
“There’s no silver bullet or something that’s just going to save us,” he said.
On the other side, there is no silver bullet, no singular event that got Copley in financial trouble. But small things can be big at small hospitals, and a few events here and there can “cause a lot of stress” on the system.
“One of the things that we have to be aware of,” he said, “is that we might not feel small to some people, but, in essence, we are the smallest category of hospital in the country.”
Copley is one of eight critical access hospitals in Vermont, about half the total number in the state. They are the small ones.
The big one is the University of Vermont Medical Center, which sees a large percentage of the patients in the state — but gets an even larger percentage of funding.
In between — “and, literally, they’re called ‘tweeners,’” Woodin notes — are the medium-sized hospitals like Rutland and Central Vermont.
Woodin said the federal designation in the 1990s of certain small rural hospitals as critical access was an act of “great foresight.” There are now about 1,300 of them, and they play key roles in their communities.
“That's an important distinction to know, that those have been given federal designations because they are considered fragile and vital to that community, to serve the people, but also as an important economic stabilizing engine and force,” he said. “In my mind, as well as others, we forget this. But they should be understood and treated as such.”
He pointed to Springfield Hospital, which filed for bankruptcy last year. He said it was a “thematic wakeup call, if not scare,” for people at the small hospitals, and for people in the towns that benefit from those places.
“I think everybody's looking and saying, ‘OK, what did we learn? What happened? Why did that happen?’” he said. “Because none of us in the state would like to see a town, any town, decimated because of an issue.”