Vermont health care regulators have issued a warning, but won’t intervene, as new leaders at Brattleboro Memorial Hospital work to control a projected $14.5 million annual budget shortfall.

“We want Brattleboro to thrive,” Owen Foster, chair of the state’s Green Mountain Care Board, said during a pair of review hearings that ended Wednesday. “The solution to make sure that happens is the management needs to identify the essential services for that community and it needs to come up with a plan to pay for them. It is not on the board and it is not on ratepayers to do that.”

Regulators, having questioned the accuracy of the hospital’s past financial reports, had ordered the 500-employee, 61-bed facility — the main health care provider for about 55,000 people in southeastern Vermont — to recalculate its current budget or risk becoming the first to receive state intervention under a new law.

At the end of hearings Wednesday, the state board declined to call for an independent observer to step in, noting the hospital had replaced its chief executive and financial officers with acting co-CEOs and budget consultants who are searching for savings and new long-term leaders.

Regulators stressed it wasn’t their role to bail out failing facilities and warned Vermont’s 13 other nonprofit hospitals not to follow Brattleboro’s recent example.

“We’re going to have solvency issues at our hospitals,” Foster said. “If a hospital submits inaccurate and incomplete data, I don’t know that we should be giving rate increases at all. It’s just a bad precedent to set.”

The Brattleboro hospital has reported a string of annual losses since 2021 and entered a state review hearing this past August with fears of another shortfall. But the institution nonetheless unveiled a proposed 2026 fiscal year budget at the summer hearing that estimated $121 million in spending and a $244,529 surplus as of next Sept. 30.

In response, the state expressed fears the hospital “has not accurately or completely answered many questions” and “may be at risk of a sudden solvency crisis,” regulators wrote in an Oct. 1 decision.

Shortly after, the hospital announced CEO Christopher Dougherty was taking an unexplained leave of absence in October before he exited permanently without comment in November. A month later, CFO Laura Bruno departed in a similar manner.

The hospital — one of Brattleboro’s three largest employers — is now headed by two acting co-CEOs: orthopaedic surgeon Elizabeth McLarney and primary care physician Tony Blofson.

“We acknowledge that it’s very serious to have a $14.5 million deficit,” Blofson said at Wednesday’s hearing. “The goal is to keep the doors open for high-quality and local health care.”

Past and present administrators have blamed the hospital’s fiscal problems on everything from too many unpaid patient bills to their own staff’s rising health insurance costs, spurring them to launch a hiring freeze and let go of several managers.

Interim financial leader David Sanville, a former executive at hospitals in Berlin, Vt., Randolph and Windsor, used this month’s hearings to outline an updated $130 million annual budget and current and coming efforts to reduce expenses and raise revenue.

In response, regulators and reviewers have categorized Brattleboro’s new numbers as “an accurate representation.”

“I deeply appreciate your honesty and frankness,” health care advocate Eric Schultheis told Sanville at the hearings. “It’s quite refreshing.”

This story was republished with permission from VtDigger, which offers its reporting at no cost to local news organizations through its Community News Sharing Project. To learn more, visit vtdigger.org/community-news-sharing-project.