As Dan Bennett, the outgoing CEO of Gifford Health Care, prepares to step down, he reflects on the challenges and accomplishments of his tenure. In a nearly two-hour conversation, he shared his insights on the financial health of the organization, the future of healthcare, and his hopes for the incoming leadership.
Why Randolph, Dan?
One of the driving forces behind Bennett's leadership was his passion for rural communities and their well-being. He explained, “I've always been drawn to smaller communities like this, and I like the fact that when I see somebody in town, they say hello, they wave, they smile. You know, it's that friendliness here. This is an incredibly beautiful place to live.” He also pointed out the strong connection between Gifford and the community, saying, “You can't really tell where Gifford ends and the community starts, and vice versa. We are of the community and the community is of us. The people you see here, the people you encounter here [at Gifford] are the same people you're going to see and encounter in the community. I think that's part of what makes Gifford special, and I think it's part of what makes Randolph and central Vermont really special.” I couldn’t agree more! Let’s get to it….
(From the left: Dr. Dennis Gilroy and Dr. Ken Borie)
Financial Health
As Economic Development Director, of course I dug into the publicly available financial records so I could talk to Dan about finances on a level that might make some readers skip to the next section. Here are the highlights.
On the question of Gifford’s long-term survival, Bennett was optimistic despite a record $14.5 million loss in FY2023. “Right now, the FQHC [Federally Qualified Health Center] is in the black through five months of this year. We're doing much better.”
From his start as CEO, one of the main challenges that Bennett faced was integrating the different electronic health record systems that Gifford used before his predecessor changed the whole corporate structure, spinning off the primary care practices to an FQHC, which then became the parent organization for the hospital. Dan said that the change in structure along with the various record systems in use made it hard to access reliable information for clinical, operational, and financial decisions, as well as billing and collecting payments. Dan reiterated “I think it was a very good vision and good strategic move to establish the FQHC. There hadn't been a lot of activity to operationalize it, though, so when I got here, that was what we had to focus on, and that was big.”
Even with the work of operationalizing the FQHC, there still was headway in unifying the health record systems. Unfortunately, the pandemic slowed down progress by a few years adding to the financial perfect storm of 2023, which included the loss of all three of their OB/GYN doctors. “That was about $2 million a year in negative impact on our bottom line on top of unprecedented staffing challenges.”
The new Gifford portal rollout finally came in October of 2023 and involved replacing three different electronic health record systems with one unified system called Meditech. Dan explained that this was a challenging process because of a lack of extra staff and the difficulty of transferring data from the old systems to the new one. “What we collected [from billing in FY2023] was down by $7 million because of the work we were doing to rebuild our system. That was a huge hit, but one we had to take in order to rebuild our system and get to a point where going forward would be a more workable situation.” He went further and reiterated his optimism: “Now we have a system that's designed to support both the hospital and the FQHC.” He added that patients can now access their own information online.
When asked about a healthy operating margin for Gifford, Bennett stated, “A 3-5% operating margin is what you’d look for, not just Gifford, but in nonprofit, particularly rural, healthcare.” He emphasized the need for a positive margin to continue investing in staff, equipment, technology, and building updates. He added that Vermont's regulators sometimes discourage hospitals from achieving this margin, unfortunately.
He highlighted the success of Strode, a Morgan Orchards Senior Living Community, which he described as “basically cash flow positive.” Bennett was optimistic about the sector’s future while adding that there's room for further improvement. “We have 49 apartments which are full… we have 50 people on the waiting list… So there are very positive things about what’s going on up there,” he said.
I asked if there were any glaring issues going forward financially worth discussing. We talked a little about their debt, how they manage it, and their covenants with bondholders. Bennett explained that because of the operating loss in FY2023, they did not meet the financial measures required by their bondholders, which was considered a “technical failure.” However, he stressed that they were able to pay all their bills and did not face any liquidity issues. He said they worked with their bank to revise their forecast and improvement plan and reset their financial targets. He expressed confidence that they were now in compliance and would hopefully stay that way.
Bennett acknowledged the financial challenges that Gifford Health Care faces, particularly in sustaining certain services. “At any time there could be services that we just say we can’t sustain [going forward]” he said. However, he was quick to reassure that there were no services “actively on the chopping block” and that the board was actively strategizing on sustainability. “I don't think [we will] be in a situation where we're going to be looking for the hospital to subsidize the FQHC over the long term, and it shouldn't.” Dan reiterated, “the federal program for federally qualified health centers is designed to support rural practices with grants and enhanced funding. Hospitals should not have to bear the cost of that.”
(Michelle Wade, APRN, Hospitalist Chats with Howell Pavilion (Med/Surg) nursing team)
Future of Healthcare
Gifford is working on different ways to look at health care in rural areas. One of the key areas Bennett has focused on during his tenure is ‘population health,’ a holistic approach to healthcare that goes beyond treating illness to promoting overall health and well-being. This approach considers factors like housing, food security, and transportation, which all play a role in a person’s health.
Bennett mentioned some possible changes in Vermont's healthcare system, such as a global budget for hospitals, which would give them a fixed amount of money to provide care for their community. He said this would encourage them to promote population health and prevent expensive illnesses. He said this could also allow them to offer more services that meet people's needs, such as home visits and food assistance. He said this model could enable them to do "throwback services" where they see people's living conditions and address factors like food, heat, and medication. He admitted that there are still challenges and uncertainties in implementing this model.
He also credited the adoption of the FQHC structure as a visionary move that helps sustain primary care in a rural environment, particularly in places where there aren’t enough people to sustain a primary care practice. However, a potential drawback is the increased regulatory burden and external reporting that comes with complying with federal and state standards for quality and safety. Bennett said this adds more complexity and costs. Still, he believes that the benefits outweigh those costs. He conceded, “The level to which Gifford was just starting to change when I got here, I don't think was quite evident at that time.”
A main healthcare challenge is affordability. In rural Vermont this is impacted by the imbalance between the low reimbursements from Medicare and Medicaid, which cover most of Gifford’s patients, and the high costs shifted to commercial insurers, which cover fewer people. This makes health insurance and care more expensive for businesses and individuals. Gifford is working to support Vermont’s aging population and the state’s efforts to attract more working-age people and businesses to expand the commercial insurance base.
The FQHC currently provides Gifford with two benefits: federal grants and higher reimbursements for Medicare and Medicaid. This allows them to offer more services, such as mental health, substance use, and dental care. They also work with Tri-Valley Transit to help people get to their appointments.
(Monthly VeggieVanGo at Gifford's southern parking lot)
Gifford’s Future Leadership
Bennett said his proudest accomplishment as CEO was creating a culture of respect and collaboration among the staff, regardless of their roles. He learned the value of culture from his previous organization and applied it to Gifford. He said people were concerned about preserving the culture after his departure and hoped the board would hire someone who shared the same values. He said culture had a direct impact on patient care and employee satisfaction. "We each play a role, and if we're not doing our role well, patients are not going to get good care, and this is not going to be an environment that people want to work in." The positive culture Dan nurtured impacts workforce stability, another focus at Gifford - keeping the great people that work there and adding new employees - and community members - to Gifford and the areas it serves. I’ll note that Gifford is currently hiring - check out their website!
Dan also addressed the concern that a new CEO could potentially make drastic cuts. He expressed confidence in the board’s commitment to the community and acknowledged the uncertainty of such a scenario. “Everybody has a boss, and the person sitting in this chair reports to our board, and our board represents the community.”
In his final words, Bennett reflected again on the changes that have taken place at Gifford during his tenure. He said, “We’ve really put that foundation in place and now it’s an opportunity for the next CEO and their team because now we have it – a primary care-driven organization, it’s in our corporate structure, it’s codified in our structure with the FQHC being at the top…so I think now we have the building blocks in place [so] that the team can go forward and really fulfill that vision and we put the structure in place so that it can be operationalized.”
As he prepares to pass the baton to the next CEO, Bennett expressed satisfaction with his tenure. “It’s been good. I’ve really enjoyed being here,” he said. His dedication and commitment to Gifford Health Care are evident, and his leadership will undoubtedly leave a lasting impact on the organization.
If you’re hoping to see Dan around town, check out Short Notice where he and his wife enjoy tapas-style small plates, or up at the Kimball House at our renowned Northern Thai restaurant, SAAP. If you’re venturing further afield, you may just catch him at Dirt Church in East Burke, enjoying one of their microbrews in the taproom.
I will end by sharing the wisdom of Dan’s wife, whom he ardently listens to for counsel: Stop thinking about what’s next and enjoy some well-deserved time off. Smell the flowers, kick off your shoes, and have a beverage from all of us in the Randolph community who appreciate your hard work.