Mismanagement there certainly was — especially in recent years — as well as an inexcusably slow realization of changing financial times and practices. But there also had to be some excellent management over the 17 years of administration under former CEO Harvey Yorke and other managers.
During that era, Southwestern Vermont Health Care became a model for other rural health care organizations around the nation — especially when it came to quality and quantity of medical care and patient choices.
A good rough indication of quality was always the size of the Southwestern Vermont Medical Center staff, which now is being pared down along with the budget. In that regard, SVMC had more people available to do the job than many hospitals its size.
SVMC also offered good employee benefits, including a traditional pension plan with guaranteed payouts, not a 401(k) in which the employee holds his or her own account — and endures any loss in the markets.
About $10 million of the care system's deficit was attributed to pension fund losses in the markets, which must be made up in hospital budgets to ensure the promised retirement benefits.
The hospital will soon switch to a 401(k) plan for new employees, but the current
And in truth, the traditional plans were given up by many firms because they were being undercut by companies that did not have them, not because they were inherently risky under careful management.
Another multi-million dollar chunk of the deficit was attributed to government insurance reimbursements that were much lower than expected. SVMC was not alone in being caught this way, although the size of the gap shows the administration was somewhat asleep at the switch.
The point is, for all their experience, administrators never saw these things beginning to form a perfect storm, or they were too confident in their abilities after years of sound fiscal management.
But isn't that the way of all successful organizations or groups suddently fallen on hard times? The idea that the slide could have been prevented is, as in most of these cases, debatable. Overconfident, veteran leaders rarely notice when the landscape has changed and they are suddenly behind the curve — even after the crumbling has begun.
Others in the health care community, and in the community at large, might have been better placed to see the looming crisis and publicly demand change. But too many, like the administrators, were just as overconfident and allowed the institution's long roll to continue.
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