Vermont hospital chief 'power grab'

By Bill Schubart

Who's really running Vermont's largest hospital - the board or the power-hungry president?

The appointed Board of the UVM Health Network (UVMHN), which is morally and legally accountable for implementing high quality, accessible, affordable healthcare in the institution it governs, appears unable or unwilling to address persistent failures in all three basic measures of a successful healthcare system.

Has Sunil Eappen, the president of the system they govern, so cowed his board of trustees that they're unable to fulfill their legal obligation to hold his administration accountable?

Does he appoint like-minded trustees himself or is his board a truly self-perpetuating board, as is best practice?

How is it that our established system of hospital governance is failing? Has an unchecked health-care boss eclipsed our commitment to the common good?

Here are some open questions for the UVM Health Network and the UVM Medical Center boards:

• Given Dr. Eappen’s recent decision to consolidate all leadership power within the UVM Health Network’s (UVMHN) hospitals under his direct control, essentially leaving the individual hospital presidents with no employees or authority to lead, did you approve this decision? Dr. Leffler, the now largely titular president of Vermont’s largest hospital -- UVM Medical Center (UVMMC) -- is left with one employee.

• What exactly is the UVM Health Network? It’s not a hospital, but rather a monopolistic aggregator of healthcare businesses that only adds to healthcare costs for Vermonters and the few companies left who insure them.

• Is your unspoken goal to prepare the UVM Health Network for sale to private equity (PE), replacing the “common good” goal with profits? Oregon has made such sales of nonprofit healthcare entities to private equity illegal. Vermont’s Legislative Legal Counsel is developing statutory language to do the same in Vermont. If the Legislature doesn’t pass this statute, could we at least mandate that PE-managed “nonprofit” healthcare in Vermont be regulated by the Green Mountain Care Board (GMCB)?

• Why do the financial and quality figures published by VHC911.org (on whose board I serve) that come directly from the Centers for Medicare and Medicaid Services (CMS) and the National Academy for State Healthcare Policy (NASHP) differ from those promulgated by the UVMHN leadership and submitted to the GMCB?

• Why did Dr. Eappen hire an international consulting firm Forvis/Mazars to render an opinion on the accuracy and relevance of broadly accepted national data used by the GMCB?

• Do you know if UVMHN itself is submitting accurate financial and performance data to its regulator as required?

When I chaired Fletcher-Allen Healthcare some 20 years ago, its president was remanded to serve a two-year sentence in federal prison for providing false information to the hospital’s then regulatory body (BISHCA).

• Is the current Board overseeing the accurate provision of regulatory data to the GMCB?

By law, in order for a hospital to receive a “certificate of need” (CON) to operate in Vermont, they must be nonprofit and subject to nonprofit governance.

• Is it time for the GMCB to review the CONs of Vermont’s hospitals to ensure that their governing boards are conforming to the legal standards of nonprofit governance?

Given the crushing costs and the measurable quality decline for Vermonters and the recent power grab by President Eappen, isn’t it time for you (the UVMHN board of trustees) to initiate an interim performance review of Eappen, with an eye towards holding him accountable for delivery on mission. If not now, when?

If the above is somewhat difficult to understand, Vermonters might simply ask board members why Vermont has:

* The fastest rising healthcare prices in the country

* Among the highest healthcare premiums in the country

According to NASHP, in 2024 UVMMC earned $802M in net profit from commercial insurers

* Among the highest pharmaceutical markups in the country

* The 6th highest proportion of patients with medical debt in the country, as documented by the Kaiser Family Foundation (KFF) on medical debt in the US

* The 6th highest proportion of patients with medical debt in the country, as documented by the Kaiser Family Foundation (KFF) on medical debt in the US

UVM Medical Center's Medicare Star Rating dropped from 5 stars to 4 stars in July 2024, attributable to declining quality and safety at the hospital, including issues with excess readmissions and hospital-acquired infections. Medicare cited UVM Medical Center for a decline in quality of care and imposed federal financial penalties as a result.

After reporting a $159M profit in FY2024 and being directed by the GMCB to reduce charges, why did Eappen choose to cut clinical services instead of management and administrative salaries, including his own, when the ratio of clinical to management and administration expenses in his $1.9B budget are among the highest in the nation?

The public record is rife with countless patient complaints of their inability to schedule appointments in a timely manner

* Inadequate regulatory compliance over several years as reported by the GMCB

* Abuse of UVMHN and UVMMC “community benefit” reporting as required in Vermont’s Payment in Lieu of Taxes (PILOT) program to avoid property taxes

In spite of spending $158,696 on marketing and $11M in lobbying and advocacy to convince Vermonters, legislators, and business leaders of their success, Vermonters know from personal experience that current levels of cost and access are unacceptable.

Something is seriously wrong and Vermonters are not dumb.

Eappen’s passive-aggressive decision to further erode employee morale and trust by consolidating power represents a gross failure of leadership and dereliction of duty.

It also indicates a serious failure of board governance which ignores consistent mission failure while focusing on their bond rating.

Intrinsic board conflict is another issue as several highly compensated employees serve on the Board.

Eappen himself sits on the boards of all the UVMHN hospitals and owned entities.

The governing boards here in Vermont have surrendered oversight of unchecked power and are silent when their role is most needed—not because the facts are unclear, but because standing up to power may risk political, monetary, or reputational loss.

Just as political leaders invoke “faith” while abandoning the vulnerable, so, too, do healthcare leaders speak of mission while extracting wealth from the communities they claim to serve, camouflaging profits, closing services, all of which drain resources from education, housing, and other urgent needs while delivering bonuses to executives.

How does this benefit the community?

We need the governing boards of UVMHN and UVMMC to do their job and rein in the financial excesses of a system that poorly serves Vermonters, despite the personal and professional commitment of the countless medical and technical healthcare professionals who care for us every day. We honor them, if not their leaders.

Editors note: The author is former chairman of Fletcher-Allen Healthcare, the precursor to the University of Vermont Health Network.

Vermont author Bill Schubart