Fletcher Allen's Costly Rebirth May Give Porter Labor Pains

Author: Megan O'Keefe

Edwin Colodny, interim chief executive officer of Fletcher Allen Health Care, announced on Nov. 8 that the hospital had overspent on its Renaissance Project construction budget by $81.3 million.
State regulators had approved $228.4 million in spending for the construction of new hospital facilities in Burlington, but Colodny estimated that costs hidden from state regulators bring the price of the project to $326.4 million.
Colodny's estimate, nearly double the initial cost proposal of $173.4 million, comes from an internal review ordered when he assumed the helm at Fletcher Allen on Oct. 7 after the resignation of former CEO William Boettcher. Colodny charged previous administrators with deliberately hiding construction costs from state regulators.
His audit revealed initial budget overruns of $81.3 million that were intended to renovate older buildings, erect temporary construction facilities, fund permit fees and furnish an outpatient center. The latest $81.3 million was budgeted toward the construction of a $55 million parking garage that was begun without appropriate state permits, $5.4 million in cost overruns and $11.3 million in contingency spending.
Colodny's review exposed a complete lack of financial responsibility on both the corporate and state level. State officials failed to maintain tight control on the Renaissance Project, and were blindly misled by Fletcher Allen administrators.
Elizabeth Costle, commissioner of the state's Department of Banking, Insurance, Securities and Health Care Administration, is now responsible for reviewing funding for the Renaissance Project. Costle will decide whether to accept or reject the higher price for the project.
Colodny warned that a failure to obtain state funding will cost the hospital millions and will force the layoff of hundreds of Renaissance Project workers. Fletcher Allen's ability to provide quality health care as Vermont's largest hospital may be compromised if funds are not secured.
The consequences of Fletcher Allen's mishandling of funds are being felt across Vermont. "The apparent pattern of deceit and effort by Fletcher Allen management to conceal this cost from the public, from the Public Oversight Commission, and from this Department is an affront to the people of Vermont and their government," Costle said. Vermonters may face higher health care costs, along with severe doubts about the state's ability to manage the health care system.
As Colodny and Fletcher Allen's new management team await a decision on funding, they hope to establish a firm budget and seek avenues for lowering expenses. A state investigation into the Renaissance Project should conclude within the next month.