(Editor’s note: Hamilton E. Davis is VTDigger’s health care columnist.)
[N]ear the end of a Senate Health and Welfare Committee hearing some weeks ago, the chair, Sen. Claire Ayer, asked Green Mountain Care Board Chairman Al Gobeille to explain what it means for medical providers to take “risk.” Gobeille gave his standard answer, but it’s problematic whether the message got through.
The question of provider risk has been a central issue in Vermont’s health care for the last five years and has been talked and written about at length, but it remains a sort of mystery in the Legislature — as does the nature of an accountable care organization and whether there can be more than one ACO in the state.
It is ironic that a classic example of the risk issue has been sitting roughly 4 feet to Ayer’s left for more than two years.
The example resides in the person of Sen. Dick McCormack, a Health and Welfare Committee member who broke his arm in 2013 and has been wearing various types of slings and braces on it until the last couple of weeks. In a very real sense, Dick McCormack’s arm lies at the center of the health care debate in Vermont and the rest of the country.
McCormack, now 68, lives in Bethel. He was appointed in 1989 to one of three Windsor County Senate seats and has been returned for 11 terms since then; he took a break between 2002 and 2006.
On Christmas in 2013, he was visiting his sister’s house in Greenfield, Massachusetts, when he fell down a set of stairs and broke his arm. He went to the emergency room at a nearby hospital, where they put the arm in a sling so he could get home.
During a quiet interval in the Senate last week, McCormack recounted his two-plus-year odyssey through the medical system.
The day after he got home from Massachusetts, he went to his primary care doctor, who referred him to Dartmouth-Hitchcock Medical Center. There, doctors put a cast on his arm but did not set it; they told him to come back regularly, which he did for nine months.
The arm didn’t seem to be responding well, however, so he returned to his primary care doctor, who told him he wasn’t growing new bone to repair the break. So his primary care doctor referred him to Gifford Medical Center in Randolph. In October 2014 doctors at Gifford operated on Dick’s arm and put in a bone graft and a plate to help repair the break.
A couple of weeks later, however, the bone graft failed. He said he bumped his arm a few weeks after the operation but that he didn’t think it was enough to cause the failure of the graft. The Gifford staff monitored the arm through the fall, but by February 2015 they decided the arm still wasn’t healing adequately. Plus, the plate had broken.
McCormack and his physicians then decided to seek advice from a specialist at Alice Peck Day Memorial Hospital in Lebanon, New Hampshire. That specialist decided the problem was too complex to take on, so Dick ended up at the University of Vermont Medical Center, where doctors carried out a hugely complex operation that apparently has worked.
On July 31, the UVM doctors cut the bone near the original break, then inserted a series of rods into the bone and connected them to a sort of circular wire cage called a stabilizer; the rods could be manipulated to move the bone by small amounts. At that point there were two gaps: a narrow gap where the bone had been cut and a wider gap where the bone had been broken.
New bone immediately began to grow in the narrow gap, and as it did so McCormack could widen the narrow gap very slightly each day to keep the new bone growing and at the same time narrowing the wider gap where the break had occurred. In a matter of several days, both gaps closed up.
Two months later, the UVM team operated again to install a bone graft. And in January they operated again to remove the stabilizer. McCormack said he will need one more operation this month to install a plate to strengthen the newly healed section. But as of Tuesday afternoon, his arm was free of mechanical encumbrances for the first time since that Christmas Day in 2013.
Dick said as emphatically as he could that he was not complaining about the care he got, and I have no credentials whatever to make judgments about that care. What is unambiguous, however, is what the McCormack saga says about the way we finance health care in Vermont and the rest of the country.
The payment methodology at every step in the process was fee-for-service. Dartmouth-Hitchcock sent in bills for everything its doctors did, and those bills got paid by Medicare. When Gifford performed a bone graft, it sent a bill to Medicare, and it was paid. And when UVM carried out its three operations, soon to be four, it sent in a bill and got paid. One broken arm, three bills. Five actually, but two were small.
Totaling up the actual dollars that the McCormack case cost is difficult for many reasons. The hospitals and doctors involved won’t be reimbursed for the full amount they charge; Medicare will pay only a portion. Still, a reasonable estimate is that the total cost of the care reaches well into six figures — somewhere between $200,000 and $300,000. If McCormack had had private insurance it would have been higher.
The cost, in other words, is two to three times as much as it should have been if the first treatment had worked. It is possible that, for whatever reason, the multiple medical efforts were simply unavoidable; that the higher costs were inevitable, no matter how well each node in the system performed medically. It is also possible that the treatments at Dartmouth-Hitchcock and Gifford were failures.
What is clear in the McCormack case is that the “taxpayer,” the public, bears all the risk. Under fee-for-service, everybody gets paid, for everything they do, no matter the outcome. That at least doubled the cost of getting the job done, and the public has to pay it.
In the block financing system that lies at the center of the Vermont reform effort, the risk, or a least a significant portion of it, would be shifted to the doctors and hospitals themselves. If Dartmouth-Hitchcock, Gifford and UVM were members of an accountable care organization, then the ACO would get a block payment for delivering care to a group of Vermont residents.
The ACO then would get paid, in effect, for fixing Dick McCormack’s arm once, not three times. If it took doctors three cracks at it, they would get paid for just one.
A critical element in this analysis is what that shift would mean to the way medicine is practiced. If the ACO expended three times as many resources and effort to fix the problem as it was getting paid for, it would take the ACO, as it would any company, a New York minute to figure out that it had a problem and that it had to fix it, right away.
The people involved from Dartmouth-Hitchcock, Gifford and UVM would sit down together and figure out what went wrong and what needed to be done differently. All three would suffer financially from failure to do that, and all three would benefit financially by fixing it. If nothing could be done, then at least all the players would know that. They would be, after all, at risk.
That doesn’t happen now, and it is the single biggest reason health care costs have risen to unaffordable levels over the last 40 years.
Meanwhile, Dick McCormack now may never play his guitar again, but he should at least have some use of that arm. And if his example helps the state get its health care costs under control — and improve its medical quality in the bargain — then his misfortune will have contributed a great service to his fellow Vermonters.
