LEBANON — After two years operating mostly in the black, Dartmouth Health spent more money than it brought in from October through March, according to a May filing with bondholders.
The $63.5 million deficit, equivalent to 2.9% of total system revenue, was driven by “weather-related closures” in February that lowered patient revenues along with high labor and medication costs, CFO Wendy Fielding wrote in the May 29 report.
DH actually saw operating revenues increase almost 8% during the six-month period compared to the same period last fiscal year thanks to increased patient volumes.
But expenses jumped nearly 11%. For example, workforce costs were up $117.5 million compared to the prior year.
The increase in medication and supply costs was driven by expanded pharmacy services and a higher percentage of patients with more severe medical conditions, according to the report.
Dartmouth generally has reported stable financial performance since the end of 2023, except in the first three months of 2025 when the system posted a nearly $20 million deficit. In that instance, the shortfall was driven by high labor costs and one-time costs associated with taking over operations of Hampstead Hospital in Hampstead, N.H.
Because of uncertainty around Medicaid reimbursements and cuts to research funding, Dartmouth Health temporarily slowed hiring last summer to review open positions and be “more intentional about where and how we invest in roles,” CEO Joanne Conroy said in an email at the time.
Since then “physician recruitment” has helped to drive patient volumes, according to the report. DH has hired 100 providers in 2026, according to news releases.
The hospital has also made “solid progress” reducing reliance on expensive and temporary contracted labor, DH spokesperson Audra Burns said in a Friday email.
DH is working with an outside consultant to implement a “financial resiliency plan” at Dartmouth Hitchcock Medical Center in Lebanon to “increase patient access and reduce costs” with a goal to improve finances for the fiscal year that ends in September, Fielding wrote.
“Similar to other healthcare organizations, and all businesses, we are grappling with reimbursement challenges, inflation and expenses that outpace the rate of revenue growth,” Burns said. “We have made targeted cost reductions including assessing travel and conference necessity, focusing capital investments exclusively on projects that support direct patient care, and identifying ways to improve patient access.”
DH continues to add new affiliates and is in the process of bringing the 25-bed Littleton Regional Healthcare hospital in Littleton, N.H., into the system. And expansion continues at DHMC, including opening an expanded heart and vascular unit this month, according to the report.
In recent years, increasing patient volume has helped to offset rising costs. Opening a new patient tower at DHMC helped the health system to drive up revenues and stabilize its finances after running deficits from late 2021 to late 2023.
DH now includes Dartmouth Hitchcock Medical Center and clinics, Alice Peck Day Memorial Hospital in Lebanon, Mt. Ascutney Hospital and Health Center in Windsor, New London Hospital, Valley Regional Hospital in Claremont, Cheshire Medical Center in Keene, N.H., Southwestern Vermont Medical Center in Bennington and the Visiting Nurse Association and Hospice of Vermont and New Hampshire, now called Dartmouth Health Home Care.
The system has 900 licensed beds and staffed beds were at 85% occupancy from October to March.
“As the largest provider of health care in New Hampshire and the second-largest provider of health care to Vermont residents, the System will continue to focus on meeting the high demand for its services and on providing the high-quality, high-value care our patients need and expect from Dartmouth Health,” Fielding wrote in the report.
In Vermont, the University of Vermont Health announced June 9 that it was eliminating 142 positions. Of those, 76 have been permanently eliminated, while 66 will be restructured and posted as new roles.
UVM Health is navigating significant financial challenges and projects a more than $300 million financial gap in the next three years, according to the announcement. The health system has lost about $460,000 per day since January.
