This commentary is by Carl Szlachetka, a member of the Copley Hospital board of trustees.

Anyone who reads the news or pays even limited attention to what’s happening in Montpelier knows that Vermont’s education and health care systems are nearing a breaking point. 

Declining birth rates, shrinking student populations, and double-digit increases in property taxes and health insurance premiums are making it difficult — if not impossible — for Vermont families to make ends meet.

According to the Agency of Human Services, our health care system is in the midst of an affordability crisis at a time when Vermonters can least afford it. Individuals and businesses are watching health care costs — for themselves and their employees — rise beyond what they can reasonably pay. 

At the same time, health care providers and insurers are facing negative operating margins and uncertain financial futures. Something has to change, and Vermont’s Act 68, enacted in 2025, is an early step toward that change.

Act 68 directs hospitals to make nearly $106 million in spending cuts for fiscal year 2026, with further reductions in subsequent years. This includes an estimated $135 million in savings from a new cap on provider-administered drug prices created through Act 55, which was also passed in 2025. 

These cuts will undoubtedly reshape how health care is delivered in Vermont, and that leads us to the first hard choice: Do we resist change and cling to the status quo, or do we explore solutions that could lower costs and increase access to primary care and other services?

On the education side, similar challenges are driving big decisions. 

Act 73, recently passed by the Legislature and signed by the governor, will consolidate the number of school districts from 185 to — possibly — fewer than 20. It also sets minimum class sizes and aims to eliminate duplicative administrative costs. 

The upside is that school funding will be less dependent on property taxes. School funding will still be sourced through property taxes, but it will now fund all schools with a foundation formula based on a base rate per pupil with additional funds for student needs. The downside is that many of the state’s smaller schools may need to merge with larger, nearby ones. 

In the coming year, focus groups will identify $106 million in potential savings — short-term, medium-term and long-term — by analyzing and rethinking areas such as payer-provider contracting, hospital reserve fund usage, shifting care to non-hospital settings, regionalizing services and administration, and reducing discretionary spending. 

While the choices will be difficult, the potential opportunities are significant. Much depends on how open Vermonters are to change. 

Let’s break these five areas down:

Payer/provider contracting: One group will explore how consumers, providers and the state can better share health care-related costs, ensuring access to high-quality care for all Vermonters.

Hospital reserve funds: Another group will assess how much “cash on hand” hospitals truly need — and whether some of those funds can be responsibly redirected.

Non-hospital care: Some groups will consider ways to shift appropriate services out of hospitals and into less expensive settings.

Shared services: By regionalizing services like IT, administration and purchasing, we can reduce duplication and improve efficiency.

Discretionary spending: Focus groups will examine which expenses are essential and which can be eliminated without compromising care.

Each group will submit a proposal to the state with specific strategies and estimated cost savings. Some may find immediate opportunities, especially in contracting, reserve fund use and discretionary spending. Others — such as shifting care and regionalizing services — may yield a mix of short-, medium- and long-term solutions.

The work does not stop there. Over the longer term, focus groups will also develop hospital-specific transformation plans, identify ways to strengthen primary care access and sustainability, and propose regional service delivery models to reduce duplication while preserving access.

With change comes uncertainty — and with uncertainty, resistance. But if we’re willing to think outside the box and move beyond “the way we’ve always done things,” we could not only lower costs but also increase access and quality. 

If we can reduce duplication and establish regional centers of excellence, where compassionate care is delivered by well-compensated professionals at sustainable costs, we may finally be on the path to solving Vermont’s health care crisis. It all starts with a shift in mindset.

Act 68 and H.454 are here to stay. If we truly want to attract new families and businesses to Vermont — and if we want our young people to stay and become the next generation of doctors, nurses, educators and tradespeople — we must rethink how we educate and provide care. 

The time is now. The choices may be hard, but the opportunities to build a stronger, more sustainable Vermont are many.