[S]tate officials and medical providers say a pilot program meant to reduce Medicaid spending, while improving beneficiaries’ health, is showing early signs of success, but officials say long-term benefits will be realized over time.
Vermont’s Medicaid shared-savings program is a three-year pilot that started in 2014. The program offers incentives for medical provider networks, known as accountable care organizations (ACOs), to better coordinate patient care.
A shared-savings program sets a target for medical spending for a population, in this case 64,000 Medicaid beneficiaries, and if the ACOs treat patients for less than the target amount, they split those savings with the program’s sponsor, the state’s Medicaid program.
The program is based on similar pilots initiated by the federal government for Medicare. The Obama administration plans to make more Medicare payments via similar arrangements in the coming years. Vermont has fully embraced the model and is testing it with its Medicaid program.
The idea is to move from fee-for-service medicine, where medical providers are paid for each treatment, drug or service they provide, to a system that pays based on keeping patients healthy.
Vermont’s ACOs are helping member organizations prepare for that future by facilitating the sharing of data and best practices. Those efforts, combined with other programs such as the Blueprint for Health, are expected to lower health care spending over the long term. The Blueprint gives medical providers money to hire case managers for patients with high medical needs.
When a patient with high medical needs, such as a person with diabetes or congestive heart failure, receives more preventive treatments and additional monitoring from a primary care provider, it can reduce the likelihood of expensive procedures or trips to the emergency room in the future, according to proponents of the state’s current health reform agenda.
Gov. Peter Shumlin and state officials joined officials from Vermont’s two largest ACOs Tuesday to announce that in the program’s first year it created $14.6 million in savings — half of which will accrue to the state’s Medicaid program.
That does not mean the state will have an additional $7.3 million in cash to address issues such as the Medicaid program’s looming shortfall, which was estimated at $40 million in May; rather, the total savings represents costs that the Medicaid program avoided.
The savings are also less than 1 percent of Vermont’s total Medicaid spending in fiscal year 2014, which was $1.5 billion, according to the Kaiser Family Foundation. State officials highlighted that the program only covers 40 percent of Medicaid beneficiaries.
Officials from the two participating ACOs, OneCare Vermont and Community Health Accountable Care, which together represent the vast majority of medical providers in the state, said the savings don’t cover their costs, but they do provide “early returns” on the investments being made in better coordinating patients’ care.
“Let’s be clear, we’re not here to declare victory,” Shumlin said. “We’re here to give some good news of a very preliminary result of a much larger effort … to spend less money for better [health] outcomes, so that we can grow jobs and grow prosperity for Vermonters.”
A major stumbling block to prosperity for average Vermonters is that medical spending, and the cost of treatment, continues to grow at a faster pace than the economy generally, Shumlin added.
Steve Costantino, Department of Vermont Health Access commissioner — and the man in charge of Vermont’s Medicaid program — said preliminary data shows that the 64,000 Medicaid beneficiaries in the pilot may have had a lower rate of emergency room visits than beneficiaries not covered by the shared-savings program.
However, an analysis of the data Costantino cited needs to be completed before any conclusions can be drawn as to whether Medicaid beneficiaries in the shared-savings may be experiencing better health outcomes.
