Dartmouth Health Faces $63.5 Million Deficit in Six-Month Period

To address the financial strain Dartmouth Health slowed its hiring process last summer.

Dartmouth Health reported a financial shortfall of $63.5 million from October to March, marking a significant shift after two years of generally positive financial performance, as indicated in a report submitted to bondholders in May. This deficit accounted for 2.9% of the health system's total revenue.

The decline in patient revenues was notably impacted by closures caused by inclement weather in February. Despite seeing an increase of almost 8% in operating revenues compared to the previous fiscal year due to higher patient volumes, overall expenses surged nearly 11%. Notably, labor costs rose by $117.5 million year-over-year, contributing considerably to the deficit.

In addition to workforce expenses, costs related to medications and supplies increased, largely as a result of expanded pharmacy services and a growing number of patients with more complex health needs. Since the end of 2023, Dartmouth Health had reported stable financial conditions, with a brief period in the first quarter of 2025 that resulted in a $20 million deficit due to elevated labor costs and expenses associated with taking over Hampstead Hospital in Hampstead, New Hampshire.

To address this financial strain, Dartmouth Health slowed its hiring process last summer, aiming to carefully evaluate open positions and strategically allocate investments in staffing. This approach has since driven a successful physician recruitment initiative, leading to the hiring of 100 new providers in 2026.

Efforts are also underway to reduce dependence on costly temporary labor. Dartmouth Health has been collaborating with an outside consultant to develop a financial resiliency plan for the Dartmouth Hitchcock Medical Center, which aims to enhance patient access while controlling expenses ahead of the fiscal year that concludes in September. The health system continues to face reimbursement challenges and rising costs, similar to other healthcare organizations.

Dartmouth Health maintains a commitment to expansion, currently integrating the 25-bed Littleton Regional Healthcare in Littleton, New Hampshire, into its network. Recent upgrades include the launch of an expanded heart and vascular unit at Dartmouth Hitchcock Medical Center.

The health system encompasses several facilities, including the primary medical center in Lebanon, Alice Peck Day Memorial Hospital, Mt. Ascutney Hospital and Health Center, and other affiliated hospitals across New Hampshire and Vermont. With 900 licensed beds, the system reported an average occupant rate of 85% from October through March.

As the predominant healthcare provider in New Hampshire and a key player for Vermont residents, Dartmouth Health aims to continue meeting the robust demand for its services while delivering high-quality care that the community expects.

Meanwhile in Vermont, the University of Vermont Health Network announced layoffs affecting 142 positions as it grapples with significant financial hurdles, forecasting a $300 million deficit over the next three years.