When Michael Costa assumed the role of CEO at Gifford Medical Center a year ago, the Randolph hospital was losing more than $1 million each month. Most nights, only a third of the hospital’s beds were occupied. Meanwhile, primary care offices were booked solid, with more than 600 patients on wait ing lists.  Those problems were underscored in a bombshell report released just a few days before Costa took over. The report, commissioned by the state and prepared by the consulting firm Oliver Wyman, said Vermont’s health care system faced an immediate existential crisis. It called on four rural hospitals to prepare for the day when they could no longer sustain their inpatient beds — Costa’s new employer among them. “My spouse heard about it on the radio and said, ‘That’s not your hospital, is it?’ And I said, ‘Yep, that’s Gifford,’” Costa recalled. A year later, Costa has accepted some of the report’s less controversial suggestions, trimming staff, cutting underutilized services and collaborating with other hospitals. Yet he has challenged the prognosis of a slow, painful death, seeking instead to position Gifford as an indispensable part of the state’s health care system by serving as a “pressure release valve” to the region’s bigger, overburdened providers. It is a strategy that can’t be replicated at every community hospital in the state and won’t be the answer to all of Gifford’s financial woes. But for now, the approach seems to be paying off: The hospital is busier than it has been in years and projects to be back in the black in 2026.  “What I’m most happy about, though, is consistent progress,” Costa said. “If you take a look at our finances, they’ve gotten better each and every month for six straight months.” Costa knows his way around a spreadsheet. For years he worked in Vermont state government as part of the health care reform office and also headed up the state’s Medicaid program. “That led to me being like, I have all these opinions about health care. I’ve never actually worked for a place that takes care of people,” he said. “That’s bananas.” He became the leader of a group of community health centers in the Northeast Kingdom before working at Gifford, a 25-bed community hospital that’s more than a century old.  Many of the problems Costa inherited had been brewing for years. The number of patients admitted to the hospital dropped during the pandemic and never recovered as more complicated cases were transferred to bigger hospitals. Meanwhile, the rollout of a new electronic health records system caused billing issues that meant Gifford wasn’t consistently paid for the care it provided. And the cost of hiring temporary staff, along with medical equipment and drugs, soared. His initial stab at reforms was to make cuts. In his first few weeks, Costa laid off two administrators and several clinicians: a urogynecologist and two chiropractors. He said those reductions were chosen to have as little impact on the community as possible — other chiropractors in the area could pick up Gifford’s patients, while remaining urologists and gynecologists on staff could care for patients who had gone to the subspecialist.  He also worked to overhaul the hospital’s scheduling practices to allow more patients to get primary care appointments. The care doesn’t necessarily make money for the hospital, because primary care has a low reimbursement rate from insurance companies. But Costa thinks if those patients have existing relationships with Gifford, they will be more likely to choose it for profitable specialized services when the need arises. Costa’s most important strategy might have been convincing bigger hospitals such as Dartmouth Hitchcock Medical Center in Lebanon, N.H., and the University of Vermont Medical Center in Burlington that Gifford could accept more transfers of patients needing hospital-level care.  “It really was a messaging change,” said Dessa Rogers, a nurse who oversees Gifford’s emergency department and the inpatient unit. “This is what Gifford can do; these are the kind of patients we can take care of; these are the kind of specialists and services that we have.” So far, the larger hospitals have taken them up on the offer.  “When they’re full in their ER, they’ll give us a call and ask if we have capacity to take a patient,” said Rogers, who has been working at Gifford for decades, since she was a teenager. “Patients have to agree, but it seems to be working out.” Over the past year, Gifford has doubled the average number of overnight inpatients from eight to 16. That includes people who live close by and others from farther afield in Vermont and New Hampshire. And the hospital feels different. “Some of our most experienced team members have come up to me and been like, ‘We used to be busy like this all the time,’” Costa said. “‘Our lab used to do orders like this all the time.’” These changes aren’t just meant to bring the hospital more business. They’re also aimed at ensuring people can get quality care close to home. Right now they often can’t, according to Randy Garner, a longtime funeral director in Randolph and a former board member of the hospital. “We’ve noticed an uptick in the past several years of local residents going to far-off places for their final days,” Garner said last year. “I can’t tell you how many times I’ve been to Albany, N.Y.; Boston; Providence, R.I.; Hartford, Conn.; Manchester, N.H. Why? Because critical care access at Dartmouth was not available.” “I don’t think there’s a fancy hospital anywhere in the country that would havegiven me better care.”Sophie Crane He spoke at a community meeting about Gifford’s future weeks after the Oliver Wyman report became public. Nearly 300 people turned out on a stormy Tuesday evening at the nearby Vermont State University campus to share their overwhelming support for the hospital. Gifford has been part of the community since 1903.  “I don’t think there’s a fancy hospital anywhere in the country that would have given me better care,” said Sophie Crane, who had given birth at the hospital a few months before.  A father brought his 12-day-old infant. “Coming to the community forum was not the first outing we planned for our son,” he said. “I think it says something about how important we feel Gifford Birthing Center is to us.” Others said they wouldn’t be alive if it were not for the hospital. Michael Costa Credit: Lexi Krupp Going forward, Costa thinks Gifford could play a bigger role in reducing wait times for routine procedures such as mammograms or colonoscopies, which are often backed up for months at bigger hospitals. At the UVM Medical Center, the wait list for a colonoscopy has more than 3,000 patients, according to testimony from the hospital president earlier this year. Not so at the Randolph hospital. “Gifford, for the most part, can get you in quite quickly,” Costa said. A busier hospital means busier staff, and Gifford has long relied on expensive travel workers to get by — a trend Costa is also trying to reverse.  This summer, the hospital started a yearlong training program to hire nurses straight out of school and provide further clinical experience, simulated scenarios, online classes and mentorship. A class of eight new nursing graduates now works at the hospital.  That has allowed more experienced nursing staff to move to specialties such as the birthing center and the emergency department, reducing the need for travel workers, Costa said. “It really is this virtuous cycle.” The hospital has a similar plan to serve as a training ground for primary care doctors fresh out of medical school. The new residency program, which will involve other community hospitals, has already received accreditation and state funding, and its first cohort should be enrolled within the next few years.  All of these efforts are aimed at helping the hospital cover its costs without raising prices.  “You can’t ask your customers to pay more — your patients to pay more — each and every year, forever,” Costa said.  That’s exactly what has been happening in Vermont in recent years. Price hikes were the default solution to fix budget holes at the state’s hospitals. The tendency has led to health insurance premiums that are now the most expensive in the country by some metrics. This year, hospitals have shown more restraint in their budgets after pressure from state regulators and lawmakers.  Still, that’s come at a cost. Many hospitals have started closing patient services in response to financial challenges. In Morrisville, Copley Hospital shuttered its labor and delivery unit at the start of November, along with prenatal and postpartum care, leaving some residents without a place to receive pregnancy care or give birth within an hour’s drive. The inpatient psychiatry unit at Central Vermont Medical Center in Berlin closed at the beginning of the year, stranding patients in severe mental health crises. And Rutland Regional Medical Center said it will close hospital beds designated for kids as soon as the end of the year.  The upcoming expiration of many Obamacare subsidies could create even more problems. Some Vermonters will face stunning increases in their health insurance premiums as of January — as much as $2,500 more each month. Insurers expect nearly 5,000 people in Vermont who currently have a health plan to decide to join the ranks of the uninsured next year. Many more are likely to lose insurance when changes to Medicaid policies go into effect after 2027. More uninsured patients means more unpaid medical bills.  “The hospitals aren’t being paid, the red ink gets broader and deeper, and it’s already pretty red,” Green Mountain Care Board chair Owen Foster told state lawmakers in October.  “There’s so many headwinds coming at rural hospitals,” Foster added in a recent interview, citing aging infrastructure, lack of providers and declines in quality of care. He’s not sure whether Gifford’s strategy will ultimately be enough to keep every small hospital in the state afloat. In part, that’s because improving health care financing is not as simple as attracting more patients. “Even if you get more patients, if they’re Medicaid patients, you’re going to be losing money,” he said. And he doesn’t think there are enough patients to go around, nor staff to take care of them. Costa is more optimistic about the future of hospitals such as his. “The curious thing about public policy and health care in 2025 is that there are many things changing, but nothing has changed the need for health care services,” he said.  “How would we practically solve that problem if these hospitals were to go away or radically change?” Editor’s note: An earlier version of this story appeared in Daybreak, a newsletter serving the Upper Valley. The original print version of this article was headlined “On the Mend? | At a crucial time for ailing rural hospitals, Randolph’s Gifford Medical Center finds hope in growth” The post Warned That It Might Need to Close, Gifford Hospital Got Busy appeared first on Seven Days. ...read more read less