Common sense

The Renaissance Project was aptly named. The goal was a rebirth of Fletcher Allen Health Care to secure the Burlington hospital's place among the nation's leading medical centers, provide state-of-the art treatment for patients, train the next generation of physicians in an ideal learning environment and create an economic dynamo for Vermont.

It will take a different kind of renaissance to make that dream a reality. Until the financial and political scandal that has enveloped the hospital is resolved, unless public confidence is restored in the hospital's management, its board of trustees and state regulators, the massive expansion program will never fulfill its potential.

Construction is well under way on the 1.1-million-square-foot project, which includes a new Ambulatory Care Center that will contain services ranging from outpatient surgery to a clinical laboratory. A joint Education and Conference Center with the University of Vermont College of Medicine, expanded emergency department, a central utility plant and the controversial parking garage complete the blueprint.

Initially pegged at $118 million, the project's latest price tag is $326.4 million and counting -- still unbudgeted is $14 million to $16 million for a new mental health unit.

Because of what a board of trustees' investigation described as deception perpetrated by Fletcher Allen's former management team -- and the failure of trustees and state regulators to oversee the project effectively -- virtually every aspect of the program is subject to misgivings and skepticism.

The Renaissance Project should proceed. It is far too important to Fletcher Allen, the medical college and Vermont to fail. Most of the construction contracts have been let, much of the work is under way; foundations have been laid, steel girders have been fabricated. The costs of halting or significantly delaying the whole project -- though not specific pieces -- would be prohibitive.

That said, everyone connected to the project must put on green eyeshades. For financial and moral reasons, the hospital cannot waste one penny on a program that will affect health care costs in Vermont for years to come. Each nail, every foot of concrete must be justified. Hospital critics, and there are many, note that Fletcher Allen consumes 25 percent of the health care dollars spent in Vermont. They expect the maximum savings feasible in the Renaissance Project, as evidence that the hospital is addressing its mistakes.

The immediate issue centers on the hospital's request to state regulators for approval of an additional $98 million in costs that were not part of the original Certificate of Need application. The hospital has state endorsement for $228.4 million, including $55 million for the parking garage that was subject to what state regulators labeled a "pattern of deceit" by previous Fletcher Allen executives.

As Fletcher Allen's head lawyer said, the hospital has zero credibility with the public and state regulators. Although interim Chief Executive Officer Edwin Colodny has been combing the project's ledgers for possible economies, only a full public airing and aggressive review by a new set of state regulators can restore faith in the hospital.

To that end, Fletcher Allen has contracted with a Seattle-based consulting firm to scrutinize the Renaissance Project. State regulators are expected to conduct public hearings next month on the $98 million Certificate of Need request. That's a time for health care advocates and other Vermonters to offer their insights to help ensure that the project delivers promised medical benefits within a reasonable budget.

If crisis can indeed open the door to opportunity, the Fletcher Allen fiasco is a chance to improve the relationship between the hospital and its community. A review process designed to renew trust could generate an atmosphere of openness and honesty, rather than secrecy and suspicion, and complete what is still an inspiring vision for health care in Vermont.

Common sense, strong accountability and a touch of enlightened self-interest by the hospital should make it work.

The Renaissance Project is just the first phase of a planned wholesale rebuilding of Fletcher Allen that will take years to complete. Eventually, Fletcher Allen would like to expand its inpatient services and enhance its critical care center. Those programs will take millions of dollars and a comparable amount of public good will and state support.

Nothing like that can happen in the current climate. Unless Fletcher Allen's board lives up to its Values Statement to be "just and prudent stewards of limited ... financial resources" and to "communicate openly and honestly with the community we serve," the hospital will never earn the public confidence essential for such a huge undertaking. Lip service to those principles is not enough; they must be lived every day, at every board meeting, during every deliberation.

If Fletcher Allen's managers, board of trustees and state officials fulfill their moral, financial and political responsibilities, the nonprofit hospital can provide outstanding care at a cost that won't bust the budgets of state government and patients. The hospital has to demonstrate that it has made the right spending and planning decisions. Any excess -- gild, chrome or extravagant outlays -- is intolerable.

The Renaissance Project should succeed. Everyone involved must do his or her best so it will -- by tightening spending, by rigorous oversight, by devoting the energy necessary to enable a new era of quality medicine and public trust to dawn over the hospital on the hill.

The blueprint

Fletcher Allen Health Care's Renaissance Project is a 1.1 million-square-foot hospital expansion. It consists of an Ambulatory Care Center, Education Center, an expanded emergency department, a Birthing Center, a four-level underground parking garage, a central power plant, and clinical support facilities (including medical records and sleep rooms for on-call residents).

State regulators approved the project first as a $118 million project in 1999, then a revised version, at $173.4 million, in 2001.

Hospital administrators hid another nearly $150 million from the state in an effort to avoid regulatory scrutiny. A recent audit of the project put its costs at $326.4 million. This could change while the project is under review.

Where the money goes

Ambulatory Care Center

-- Status: Biggest piece of project includes emergency, operating rooms, clinics. About 20 percent complete; 70 percent of total work has been let to subcontractors. Foundation completed, steel erected, roof started, exterior shell being enclosed. Interior fit-up will be phased and is under review.
-- Cost: $109 million in hard construction costs. Equipment to cost about $41 million. (About $27 million of costs relate directly to new project; about $14 million for routine equipment replacement.)

Parking garage

-- Status: Garage is 42 percent complete; to be finished late 2004 or early 2005.
-- Cost: Estimated cost is about $40 million for construction and about $12.5 million for design fees, insurance and financing. Hospital says related costs might bring it up to $55 million Certificate of Need cap approved by state.

Education Center

-- Status: Just started; 5-6 percent of work complete and scheduled to be done in May 2005. Interior work to be phased and completed 2006.
-- Cost: $18.3 million for construction. Fletcher Allen to seek state approval for $8.9 million of cost with University of Vermont contributing $9.4 million.

Birthing Center

-- Status: About 15 percent complete; all contracts let; to be finished February 2004.
-- Cost: About $5.4 million (construction to cost $4.2 million; design fees, insurance to cost $1.2 million.)

Central plant

-- Status: About 20 percent complete. (Plant to house all large mechanical equipment and generators serving entire complex for power, heating, air conditioning.)
-- Cost: $26 million ($22 million for construction; $4 million for design fees, insurance and other costs)

From the board of trustees' report

"Fletcher Allen's management of the Renaissance Project lacked in certain key respects the candor and forthrightness that should guide its conduct in dealing with the public, the government and its own board of trustees."

"The trustees should have been more proactive in several respects. The trustees should evaluate the extent to which they collectively, and individually may have contributed to these deficiencies."

"Most of the trustees we interviewed acknowledged that the board has reposed too much trust in management. Several attributed this to the excellent work performed by (former CEO William) Boettcher in improving Fletcher Allen's troubled financial condition.

"Whatever the reason, the committee remains convinced that the board did not adequately exercise its oversight duties."

"Cultural changes must come from the top. For this reason, there should be steps taken to assure that the actions of the trustees and the Fletcher Allen staff are consistent with the (hospital's) mission." Fletcher Allen board of trustees' "Report of the Ad Hoc Committee Concerning Governance and Compliance Issues Relating to the Renaissance Project," (Nov. 15, 2002).