The Cost of Consolidation: How UVM Health Network's Dominance Created a Healthcare Affordability Crisis
Deeper analysis reveals a situation driven less by unavoidable circumstances and more by market dominance and strategic choices that have left Vermonters shouldering an unsustainable financial burden.
It’s a painful reality for residents of the Green Mountain State: healthcare costs are staggeringly high. Data consistently shows Vermont has among the highest health insurance premiums and healthcare spending as a percentage of income in the United States, let alone New England. At the center of this crisis is the state's largest and most dominant provider, the University of Vermont Health Network. While the network often points to the challenges of rural healthcare and government reimbursement rates, a deeper analysis reveals a situation driven less by unavoidable circumstances and more by market dominance and strategic choices that have left Vermonters shouldering an unsustainable financial burden.
The Price of a Near-Monopoly
In any market, a lack of competition often leads to higher prices, and Vermont's healthcare landscape is a textbook example. UVM Health Network holds a commanding market share, creating a near-monopoly in many parts of the state, particularly for specialized and hospital-based care. This dominance grants it immense leverage in negotiations with insurance companies, which in turn pass the high costs on to employers and individuals through premiums and out-of-pocket expenses.
Critics argue that this market power has led to soaring profits. According to analysis from the advocacy group Vermont Health Care Advocate (VHC911), which reviewed publicly available data, the UVM Medical Center (UVMMC) in Burlington has a significantly higher operating profit per patient discharge than most of its academic medical center peers. This suggests that the high prices are not just covering costs but are generating substantial surpluses.
Justifications Meet Scrutiny
UVM Health Network publicly justifies its high rates by citing a number of factors. In public statements and interviews, CEO Dr. Sunny Eappen has pointed to the high costs associated with providing care in a rural setting, elevated labor expenses for staff like travel nurses, and financial losses on specific services. A central argument has been that government payers like Medicare and Medicaid do not cover the full cost of care, forcing the network to shift these costs to patients with commercial insurance.
However, these justifications face sharp scrutiny. An analysis by VHC911 using data from the Centers for Medicare & Medicaid Services (CMS) directly contradicts the claim of underpayment, finding that UVMMC's Medicare reimbursement rates are actually average for an academic medical center.
The state's primary regulator, the Green Mountain Care Board (GMCB), has also expressed skepticism. The GMCB, which is responsible for approving hospital budgets in Vermont's unique all-payer model, has pushed back on the network's requested budget increases. In its own findings, the board stated that UVMMC has "significant opportunity to improve its expense management and control the excessively high prices it charges commercially insured Vermonters," indicating that regulators believe the issue is one of efficiency and cost control, not just external pressures.
The Leapfrog Safety Blind Spot - Not a single A Grade
In stark contrast to the glowing CMS ratings touted by UVM’s public relations department, an examination of data from The Leapfrog Group, a respected national non-profit watchdog focused exclusively on hospital safety, reveals a deeply concerning situation. Leapfrog's Hospital Safety Grade assigns a simple A, B, C, D, or F letter grade to nearly 3,000 general hospitals based on their ability to protect patients from preventable medical errors, accidents, injuries, and infections.
In multiple consecutive grading periods—including Fall 2023, Fall 2024, and Spring 2025—Vermont was one of a handful of states in the entire country with zero hospitals receiving an "A" grade for safety. This consistent, statewide failure to meet the highest standards of patient safety stands in jarring opposition to the 5-star CMS narrative.
The New York Connection: Profits in Vermont, Losses Across the Lake
Perhaps the most contentious issue is the network's regional expansion. The UVM Health Network includes several hospitals in upstate New York, and financial data reveals a stark contrast in their performance. According to reports examining hospital financial data, profits generated at Vermont-based hospitals, particularly the flagship UVMMC, have been used to subsidize financial losses at the network's New York facilities.
This cross-subsidization means that the high premiums and treatment costs paid by Vermonters are not just supporting healthcare within their state; they are propping up the network's broader regional ambitions. For residents and businesses in Vermont, this is a bitter pill to swallow—paying a premium to cover losses in another state.
Is the Quality Worth the Cost?
When confronted with high prices, the natural question is whether they deliver superior quality. Here, the verdict on UVM Health Network is mixed. On one hand, the network's hospitals often receive high marks for patient outcomes. CMS, for instance, has awarded both UVMMC and Porter Medical Center its highest 5-star rating.
However, other metrics paint a less rosy picture. The Leapfrog Group, a national nonprofit focused on hospital safety, has consistently given Vermont poor marks. In its Spring 2024 Hospital Safety Grades, not a single hospital in Vermont received an "A" grade, a concerning statistic for a state with such high healthcare spending. This discrepancy raises a critical value question: are Vermonters truly getting best-in-class care for their highest-in-the-nation prices?
Conclusion: A System at its Breaking Point
In conclusion, the healthcare affordability crisis in Vermont is not an accident of geography or demographics. It is the predictable result of a market structure that has allowed a single provider to prioritize its own financial and strategic objectives—including regional expansion and subsidizing out-of-state operations—over the economic sustainability of the community it is chartered to serve. The combination of market dominance, questionable cost justifications, and a strategy of cross-state subsidization has created a healthcare system that, while delivering quality care on some measures, is financially breaking the backs of the people and businesses it is meant to heal. Without a fundamental shift toward greater efficiency, cost control, and a renewed focus on its core Vermont mission, the UVM Health Network risks becoming a true case study in how "too big to fail" can become too costly to bear.