In 1968 the Mary Fletcher and DeGoesbriand Hospitals merged to create the Medical Center Hospital of Vermont (MCHV) in an effort to reduce duplication between the two hospitals and to reduce cost.  By the late 1970's many people came to fear that this new, larger organization might become remote from the pulse of the community.   Others voiced concerns that government regulation would play an increasing role in determining how charges for medical services might be set.

In March of 1983, the Vermont Health Foundation was created to:

1. function in a 'holding company' capacity not only for MCHV, but also for other non-profit and for-profit organizations associated with MCHV;
2. bring a broad, community perspective to health care; and
3. be a place where funds donated to benefit MCHV might be reposed (MCHV's $2.5 million endowment was transferred to the VHF at its creation) and protected from government regulation.

In this role, the VHF approved for MCHV and its subsidiaries:

• budgets*;
• long range plans;
• by-laws revisions;
• Certificate of Need Applications*; and
• board appointments for its various subsidiaries.

Subsidiary entities included, over time:

• The Visiting Nurse Foundation, parent organization of the Visiting Nurse Association (1984); and
• Vermont Health Ventures, which by December of 1989, had combined several other Foundation-owned entities:
• Health Center Pharmacy (1983)
• Starr Farm Nursing Center (the first phase completed in 1987).  A collateral life care facility, Windrows, was planned adjacent to the Nursing Center during 1986-88.  Plans were abandoned in 1988 when not enough pre-construction reservations for residency were secured.
• Burgess Health Enterprises (1987), formed as an investment vehicle for the  VHF to participate with Voluntary Hospitals of America-New England and the Visiting Nurse Foundation in New England Life Care, a home care/durable medical equipment program.  The Vermont Independent Home Health Care Providers Association immediately opposed entry into this market.  In 1989 New England Life Care discontinued its Vermont branch and began using the VNA to provide home infusion therapy.  In late 1989, Physical and Occupational Therapy Associates in partnership with BHE began offing outpatient therapy at the Burlington Athletic Club and the Thomas Chittenden Health Center.

Throughout its history, the Foundation has sought efficiencies in health care accessibility and delivery (see the mission statement modifications over time at the end of this piece).  In 1987 it worked with leadership at the Central Vermont Medical Center to achieve an affiliation.  That effort was abandoned in December of that year with a decision to maintain joint committees. In August of 1988 it established the 'VHF Patient Assistance Fund' to help pay hospital bills of MCHV patients unable to meet the full cost of their care.

The Foundation's history reveals it to be an increasingly inclusive organization.  At its founding, the By-Laws provided simply that its Board consist of nineteen members, the majority of which were to also be Trustees of MCHV.  Within two years, a By-Law amendment required that not less than three Board members be directors of the Visiting Nurses Foundation; in 1990 a later amendment required that the VNF chair sit as an ex-officio member of the Board.

In 1987, MCHV's Public Relations Department was transferred to the VHF and, with that transfer, responsibility for approving gifts to community-based organizations.  Each year, a modest fund of ca. $25,000 supported small sponsorships for a variety of community organizations while larger gifts funded subsidiaries' efforts.  Beginning in Fiscal Year 1989, the Visiting Nurse Association received $50,000 per year, most often from Vermont Health Ventures dividends (profits from the Health Center Pharmacy).  The VNA also received capital support with a $500,000 pledge for its capital campaign in 1994.  The only other large gift was in September, 1993; $200,000 for renovation of Austin Auditorium in the hospital.

A review of corporate board meeting minutes shows that as early as 1991 the community began discussing erection of a satellite medical facility and that conversations had also begun between the Fanny Allen Hospital and MCHV trustees to find areas of cooperation. Leadership changes at the Fanny Allen Hospital precipitated these discussion.  This inquiry was soon paralleled by similar discussions among the University of Vermont, University Health Center and MCHV toward the creation of a 'Vermont Academic Medical Center' in 1992. 

By the fall of 1993 the Boards of FAH, MCHV, and UHC committed to exploring creation of a new organization ('Newcorp') which would become Fletcher Allen Health Care.  Negotiations accelerated and by March of 1994 planners had agreed that the four incorporating entities would be the Fanny Allen Corporation, University Health Center, University of Vermont, and Vermont Health Foundation (as successor of MCHV).

Anticipating the merger later that year, in October of 1994, MCHV's endowment funds were transferred from MCHV to VHF by resolution of both boards.  Since Fletcher Allen Health Care would require licensing to continue to operate as a hospital, MCHV legally transferred its license and other assets to the new organization. 

When Fletcher Allen Health Care came into being at the end of 1994, the VHF's role changed.  As it continued as an entity governed by a board comprised of  community volunteers,

• it became one of the four 'parent' organizations of Fletcher Allen, responsible for  nominating four people to the Fletcher Allen board of trustees and approving by-law or mission statement changes,
• it ceased its fund-raising activity as Fletcher Allen took on responsibility for its own fund-raising, still retaining the endowment transferred earlier to it from MCHV, and
• it revised its mission to be substantially similar to that of Fletcher Allen Health Care, with the words "to improve the health of the communities it serves" at the heart of both organizations' mission statements. 

In 1995, the VHF reduced its board size, and voted to relinquish its role of the sole member of the Visiting Nurse Foundation.  The following year it transferred all donor-restricted funds under its purview (ca. $11 million) to Fletcher Allen, retaining a corpus of over $10 million.

Despite changes in its 'parental' role with the Visiting Nurse Foundation, it has continued to the present supporting that organization's initiatives.  In 1996 the VHF granted $150,000 to the Vermont Respite House contingent on the VNA's taking on operation of that facility once its debt was retired.  While the VHF declined to continue the $50,000 annual operating subsidy that the VNA had enjoyed from Fiscal Year 1989 through 1995, it has supported efforts on maternal-child health, palliative care and family supports where these efforts have met Foundation grant guidelines under the same scrutiny given all applicants.

In December of 1996, the VHF voted to sell Vermont Health Ventures to Fletcher Allen.  The transfer took place in mid-1997 when Fletcher Allen purchased VHV for its book value as of March 31, 1997 plus assumption of the Foundation's remaining $200,000 pledge for the VNA's capital campaign and the remaining $50,000 on the Foundation's pledge for the Vermont Respite House contribution.

The VHF began developing its own grant guidelines in 1996 and awarded its first grants in August 1997. It has provided over $2 million to a wide variety of projects ranging from those existing entirely outside any clinical setting (e.g., a family fitness effort managed by the YMCA at the Boys and Girls Club) to those with some clinical connections (e.g., several efforts aimed at reducing the incidence of adult-onset Type 2 diabetes).

Even as the transfer of donor-restricted funds and the sale of Vermont Health Ventures to Fletcher Allen were occurring, discussion began in August of 1996 on whether the VHF would consider taking over management of FAHC's "Community Services Program."  As the Foundation settled into its grant-making role these conversations lapsed until an April, 1999 board retreat.  Soon, in June, Board members began meeting with Fletcher Allen leadership about how VHF work could support FAHC and about the growing redundancy of VHF's work and FAHC's efforts through its Office of Community Health Improvement.

These discussions dove-tailed with the Foundation's desire to support Fletcher Allen's planned "Ambulatory Care Facility" in its Renaissance Campaign.  In April, 2000, the Foundation pledged $2.5 million (the same amount transferred from the Hospital's endowment to the Foundation in 1983).  In August of 2000 the Foundation approved a Memorandum of Understanding between it and Fletcher Allen that became effective October 1, 2000. 

Fletcher Allen Community Health Foundation is created...

The MOU called for better coordination of Fletcher Allen's Community Benefits Fund and collateral efforts managed by its Office of Community Health Improvement with community investments made by the Foundation.  It called for a blending of dollars and of both volunteer and clinical expertise to more effectively achieve better community health with a further goal that, over time, this will lead to better clinical outcomes. 

In early 2001, Fletcher Allen provided the Foundation with office space in its Community Health Improvement office, and within a matter of months, the two organizations had developed new funding criteria.  They split funding programs into three categories: strategic funding (funding of community-based work via a Request for Proposal process designed to find community partners to help Fletcher Allen better achieve its strategic priorities), responsive funding (traditional grants) and on-going support to community partners, most of whom had been established - at least in part - to help Fletcher Allen or its predecessor, MCHV, achieve its mission.

Meanwhile, the Foundation's role as a "parent organization of Fletcher Allen Health Care" would soon be tested.  During the summer of 2002, Fletcher Allen's CEO was placed on administrative leave (later resigning) when it was discovered that major permits had not been sought for the ambulatory care facility. Late 2002  VHF Board minutes reveal long executive sessions to discuss allegations of improprieties at Fletcher Allen as well as needed competencies for FAHC trustees and the individuals who might bring those competencies to the FAHC Board.

In February of 2003 with substantial community and political pressure growing, nine members of the FAHC board resigned.  Of these nine, only one was a VHF-appointed member as three of the VHF's appointments were made after resignation of the CEO.  Despite this, the VHF worked with the other three parent organizations to solicit and vet over 200 applications for membership, appointing one person to the Fletcher Allen Board.

The events of 2002 and 2003 highlighted the importance of the Foundation's role as 'parent' to Fletcher Allen, particularly its responsibility in appointing members of that Board.  On-going discussions at Fletcher Allen about possible changes to its governance structure will engage the Foundation as, in its role of parent, it must approve changes to Fletcher Allen's by-laws or mission.  Since its inception, the VHF has unwaveringly committed itself to appointing persons who will bring a 'community perspective' as well as needed leadership and other skills to Board deliberations.  That two of its appointees have become board chairs at Fletcher Allen reflects the diligence in appointing FAHC trustees.

Mission Statements of the Vermont Health Foundation

The Vermont Health Foundation was incorporated on March 21, 1983.  Corporation records show no mission statement until October 1, 1987.  Subsequent revisions reveal much of how the organization's focus changed over time:

October 1, 1987: The mission of the Vermont Health Foundation is to promote and support a high quality, comprehensive and efficient health care system in its service region.  In support of its mission, the Foundation will 1) address the continuum of health care needs including primary care, secondary and tertiary care, long term care, home and community-based services, 2) provide necessary support services to affiliated organizations; and 3) cooperate in the provision of programs in medical education and research.  The primary considerations in the delivery of Foundation services will remain availability of care and quality of care and support of a strong, not-for-profit health care system.

February 6, 1990:  The purpose of the Vermont Health Foundation (VHF) is to facilitate development of a high quality, comprehensive, and efficient health care system for its service region.  In purpose of this purpose, the foundation is committed to:

• Fostering a corporate environment that encourages flexibility, creativity, responsiveness, and local control
• Coordinating planning among subsidiaries and resolving intra-corpoate concerns to ensure optimum quality and efficiency in health service delivery in the region
• Developing profitable ventures where appropriate to enhance the service delivery objectives of not for profit subsidiaries or to maximize the return on VHF resources
• Disseminating information to subsidiaries and external publics on health policy issues that is helpful in shaping local responses ton problems impacting the health delivery system
• Developing the fund raising capacity of the system

The Foundation is also committed to cooperate with other health care organizations in the region, various state and local agencies, governmental bodies, and various public and private bodies where its role as a systems facilitator is of benefit and service.

A primary consideration in facilitating the development of a health system will be a commitment to maintaining a strong non-profit structure and ensuring accessibility of essential health services.

May 9, 1996:  The mission of the Vermont Health Foundation is to improve the health of the people in the communities it serves.  It will accomplish this mission by supporting organizations that provide care, education, and research to improve the quality, accessibility, and affordability of health care.

February 17, 1997:  The mission of the Vermont Health Foundation is to improve the health of the people in the communities it serves.  It will accomplish this mission by supporting efforts which provide care, education, and research to improve the quality, accessibility and affordability of community health.

Fletcher Allen Community Health Foundation support

The Fletcher Allen Community Health Foundation supports a variety of organizations and programs that improve the health and quality of living in out community. Funding for these programs is allocated through both a traditional grants-making process and soliciting funding proposals.