Inside the UVM Health Network Overhaul: Will It Actually Lower Costs for Patients?
The news of an executive shakeup is only the final chapter of a high-stakes battle over cost, control, and accountability.
In October 2025, Vermonters learned that the University of Vermont Health Network (UVMHN) was eliminating three top executive positions: Chief Operating Officer, Chief Medical Officer, and Chief of Staff. According to reporting from VTDigger, the move was part of a strategic shift by new interim CEO Dr. Steve Leffler to create a “leaner organization” and “move more decision making power to the hospitals.”
The executive layoffs were not just a proactive strategic choice; they were the necessary and direct result of a power struggle that the health network ultimately lost.
This is the rest of the story.
The Regulator’s Hammer
The primary driver of this overhaul is the Green Mountain Care Board (GMCB), Vermont’s powerful independent body tasked with controlling healthcare costs. The relationship between the GMCB and UVMHN had become, by 2025, openly hostile.
The board repeatedly criticized the health network for what it termed “ineffective,” “overpriced,” and “unnecessary corporate bureaucracy.” This frustration boiled over in September 2025, just one month before the executive layoffs. As reported by Seven Days, the GMCB took the drastic step of slashing $88 million from the UVM Medical Center’s proposed budget.
The board’s rationale was scathing. According to reports from Seven Days, GMCB Chair Owen Foster publicly accused the network of using “inflated commercial rates in Vermont... to subsidize its unsustainable New York operations.” This accusation—that Vermonters were overpaying for care to cover losses in another state—became a central point of the conflict.
This $88 million cut was the final blow, but it followed a landmark April 2025 settlement agreement between the GMCB and UVMHN over previous budget overages. This agreement, detailed by Vermont Business Magazine, was the mechanism that codified the need for reform. It forced the network to:
Make significant financial payouts, including $12 million to Blue Cross Blue Shield of Vermont.
Fund, up to $15 million, an independent, third-party review of its own governance and operations.
Agree to have this review overseen by an “independent liaison” appointed by the GMCB.
This settlement effectively ended the network’s autonomy, giving the state regulator a direct hand in reshaping the entire organization. The October layoffs were a direct, and predictable, outcome of this externally-forced review.
A Crisis of Public Trust
The GMCB’s aggressive actions were backed by a rising tide of public and political anger. In January 2025, it was reported by VTDigger and others that 19 of the network’s top executives had received a combined $3 million in bonuses for 2024.
The timing of this news was toxic. It came as UVMHN was cutting patient services, including an inpatient psychiatric unit, citing budget constraints. The optics of multi-million-dollar executive payouts while mental health services were being cut drew a sharp rebuke from Governor Phil Scott, who, according to VTDigger, called out the “perverse financial incentives and executive bonuses paid for by skyrocketing premiums.”
This bonus scandal, combined with earlier layoffs, created a crisis of legitimacy. According to Becker’s Hospital Review, the network had already eliminated 146 positions in July 2025, 77 of which were filled roles. The public was left with the perception of a “top-heavy” administration protecting its own compensation while cutting frontline staff and patient services.
A Forced Change in Command
The combination of the GMCB’s $88 million budget cut and the intense public pressure made the leadership of then-CEO Dr. Sunny Eappen untenable. His departure was announced in September 2025, just days after the budget-slashing vote.
The choice of his successor, Dr. Steve Leffler, was a clear strategic pivot. Dr. Leffler is the consummate insider, having spent over 30 years at UVMMC as a physician and administrator. His appointment signals a dramatic shift away from the centralized, corporate model Dr. Eappen represented.
Dr. Leffler immediately announced a new vision for a “less network-centric organization,” as reported by the Valley News. His plan directly addresses the GMCB’s criticisms:
Flattening the Hierarchy: By eliminating the network COO, presidents of individual hospitals now report directly to Dr. Leffler, cutting out a layer of management.
Decentralizing Power: The new model aims to give more autonomy to local hospitals, based on the principle that decisions should be made “closer to the level of care.”
Localizing Governance: The chair of each member hospital’s board will now have a voting seat on the main UVM Health Network board, ensuring local perspectives are represented at the highest level.
This new “network-lite” model is, in effect, a capitulation to regulatory demands. It prioritizes local accountability and regulatory peace over the national healthcare trend of corporate consolidation.
What This Means for Vermonters: Key Questions Ahead
This entire overhaul has been justified as a “necessary course correction” to improve affordability. The GMCB, according to the Valley News, has praised the moves as in line with its concerns. However, the ultimate success of this new model depends on the answers to several critical questions that will directly impact every Vermonter.
Will this actually lower costs? The core promise is that a “leaner” administration will translate into lower costs and, eventually, lower insurance premiums. Vermonters must watch to see if these structural changes deliver real, sustained financial discipline or if costs continue to rise.
What happens to the New York hospitals? The GMCB’s central complaint was that Vermont dollars were subsidizing New York operations. With a new, more Vermont-centric governance model, will the network be able to fix the financial drag from its New York affiliates? Or will those hospitals suffer?
How will this impact patient care? This is the most important question. Labor unions, such as AFT Vermont, have consistently argued that “administrative bloat” drains resources from patient care and frontline staff. The risk is that a relentless focus on cost-cutting could lead to further reductions in services, longer wait times, and a degradation of care quality.
Is this a sustainable model for rural healthcare? UVM Health Network is pivoting away from the national trend of consolidation. If this new, decentralized model succeeds in controlling costs while improving care, it could become a new blueprint for rural health systems. If it fails, it could further fragment care and weaken the financial stability of the state’s most critical health resource.
Ultimately, Vermonters are witnessing a high-stakes test. The state has forced its largest health system to tear down its corporate structure in favor of a model built on local control and public accountability. The coming years will determine if this was the cure for Vermont’s healthcare affordability crisis, or if it will create new, unforeseen challenges for the patients it is meant to serve.