[D]octors and health care experts are questioning purported cost savings associated with the so-called all-payer model.
Patrick Flood, a retired veteran administrator of the state’s human services agency and former leader of a community health center in St. Johnsbury, is one of the skeptics. He gave his unvarnished opinion to officials at a public forum Thursday held at the University of Vermont’s Davis Center.
The Shumlin administration and state regulators are holding hearings across the state on the all-payer program, which would create one administrative entity for the state’s health care system. Gov. Peter Shumlin announced on Sept. 28 that the federal government had approved the state’s proposal. The deadline for public comment is Oct. 13.
In an interview Friday, Flood said while he supports the concept of the all-payer model, he has serious questions about the administrative costs of the new system, how doctors will be paid, and the cost of commercial insurance. The proposal, he says, does not address the Medicaid cost shift, which drives up insurance premiums for employers and individuals.
Flood said in a commentary submitted to VTDigger that the new affordable care organization formed through the all-payer model “will result in even more administrative costs — more executives, computer systems, and case managers.” The new administrative expenses, he says, will run into the tens of millions of dollars.
“No one is saying yet how this will be paid for, but it is pretty clear it will come out of Medicare and Medicaid funding,” Flood wrote. “This may be ‘new’ funding from the feds, but with all the needs we have in Vermont, to spend tens of millions on additional administrative costs is just wrong.”
State officials, he said, have not addressed his concerns.
The all-payer model is based on the structure of OneCare Vermont, an accountable care organization led by UVM Medical Center. The model would be a regulated monopoly that would include 30 percent of Vermont’s doctors. Eventually all doctors in the state would join.
The accountable care organization would accept monthly payments from Medicare, Medicaid, and commercial insurance and then funnel those payments back to doctors based on the quality of care they provide. The Green Mountain Care Board would regulate the accountable care organization.
“It’s presented as a done deal that in order to get this all-payer model up, we have to put in place a single ACO, and the ACO in my belief will be a top-down controlled model,” Flood said.
Flood says the model will be built from the current affordable care organization currently run by the UVM Medical Center. The proposal he says would turn over management of health care from state government to a private entity. “If this is to happen, then there needs to be transparency and accountability,” Flood wrote in a commentary. “It is difficult enough to get transparency and accountability from government; it will become much more difficult when a private organization is in charge.”
Real health reform, Flood says, happens at the local level. “The real determinants of good health have almost nothing to do with the medical system,” he said in an interview.
“I’m not sure that the people who are managing this understand what is needed to really make it successful,” he said.
“There are people in the community who know what it takes to save money, and yet we’re being pushed and we’re being funneled into this ACO,” Flood said. “It’s going to cost a lot of money, and no one wants to talk about that.”
Gov. Peter Shumlin projects that the model could save nearly $10 billion over 10 years. Those numbers are based on all insurers, including the Medicare trust fund, saving money from 2013 to 2023.
Flood says in a commentary that “the governor’s claim that the proposal could save billions strains credulity.” He wants to see the Shumlin administration’s analyses “that led to that prediction.” “If the new ACO is such a great idea,” Flood wrote, hospitals in the new ACO should foot the bill, not taxpayers.
Al Gobeille, the chair of the Green Mountain Care Board, sees the all-payer model as a vehicle for better quality care and some cost savings.
Gobeille has said that a family of four making $60,000 in 2015 paid 38 percent of its income for a platinum plan through Vermont Health Connect, and that percentage will be to 56 percent by 2025 if no changes are made to health care.
“I don’t know Patrick’s motivations; I can’t speak to those,” Gobeille said Friday. “I can only tell you that ACOs do work, and changing the incentives in health care is not just a Vermont idea, it’s a national idea, and it’s what most people think will help people be better from a health perspective and also bend the cost curve.”
Gobeille said ACOs work best “with large systems that have been working on integration for a long time,” like the UVM Medical Center. “They work least with small hospitals and independent physicians where they’re used to doing their own thing,” he said.
Gobeille also said the all-payer model is more about increasing the quality of care than saving money. “As far as an integrated model saving money, it’s tough to bet on something like that,” he said.
Do ACOs save money?
At a Green Mountain Care Board meeting Wednesday, the board heard from actuaries who endorsed the all-payer model. In a packed room, other stakeholders raised concerns over the amount of money that state officials say they can save.
Paul Harrington, the executive vice president of the Vermont Medical Society, said in an interview Thursday that the savings were based on two assumptions: that many Medicare patients will be covered under the accountable care organization, and that doctors will be able to reduce the costs of treating them.
Harrington said research on ACOs being able to save money “is pretty mixed” and may not actually support these theories. He called the two assumptions under the projected savings “highly educated guesses, but they’re guesses nonetheless.”
National health care experts also have given mixed reviews of the ACO concept.
In 2015, Jeff Goldsmith, a professor at the University of Virginia, told Kaiser Health News that the U.S. Centers for Medicare and Medicaid Services needs to “establish its credibility in order for its innovations to take hold. Picking the ACO as its lead project was a bad decision, and one that has not enhanced the center’s credibility.”
Another national health policy expert, Robert Murray, concurred with Goldsmith. “Recent results on ACO performance indicate that it hasn’t been successful,” Murray told Kaiser. “A lot of people have characterized the results as lackluster at best, and I think things are even worse than that.”
Michael Chernew, a professor at Harvard Medical School, says that one ACO program “unambiguously” saved money for the U.S. Centers for Medicare and Medicaid Services, and that “over time we will see bigger savings and more organizations participate.”
In Vermont, doctors spend so little money treating Medicare patients that the ACOs have not been able to receive bonuses through the federal government for reducing costs. OneCare says its doctors already provide some of the lowest-cost, highest-quality services in the country.
“They’re already a low-cost highly efficient system so I’m concerned that the savings might not be achieved here in Vermont because of the highly efficient, low-cost system that we have,” Harrington said.
He said the Green Mountain Care Board and its actuaries “demonstrated a confidence that I frankly haven’t seen supported by the research.”
Additional $51 million built in
The all-payer model offers major financial incentives for the state — about $51 million in funding over six years to continue health reform programs.
In 2017, the federal government will put $2 million in one-time money into setting up the all-payer model ACO. Another $7.5 million will go to funding the Blueprint for Health, Support and Services at Home, and community health teams, and the number will go up over time.
Without the all-payer model, Support and Services at Home, which offers home care for seniors and people with disabilities, would sunset. So would the Blueprint for Health, designed to coordinate primary care, and community health teams.
Kim Fitzgerald, the chief executive officer of Cathedral Square, which runs the Support and Services at Home program, said more than 5,000 people would have to stop participating in the program, and more than 100 nurses and coordinators would lose their jobs.
“This is a critical program that would end if it didn’t go through, so there is a critical time component to it,” Fitzgerald said.
Dr. Paul Reiss, the chief medical officer for HealthFirst, which represents independent doctors, has grave concerns about the all-payer proposal. The continued funding for the Blueprint for Health is not enough, he said.
“Continuing on the very small and almost insignificant Blueprint (for Health) payments is not a success because it’s not enough for practices to stay viable or for practices to expand and bring on more practitioners,” Reiss said.
He said that as part of the all-payer model negotiation, Vermont lost out on $34 million in annual funding from another federal program that would have helped independent primary care doctors train and recruit more people.
“That’s what we gave up when we went forward and committed to go down this road,” Reiss said. “We need a bigger workforce but now we’re going to compete with other states that have been awarded this money for primary care.”
Hal Cohen, the secretary of the Agency of Human Services, contacted VTDigger after this story was published to correct Reiss’ assertion. He said the agency applied for the primary care grant but the proposal was rejected by the Centers for Medicare and Medicaid Services.
“This was a highly competitive process and we were informed by CMS that the rejection of our application was due to the limited number of primary care practices in Vermont and that this would impact a statistically valid and reliable evaluation of the initiative,” Cohen said by email.
Reiss said the major test of the all-payer model will be if the ACO and its regulator, the Green Mountain Care Board, has the guts to redistribute money from high-cost hospitals to primary care physicians.
“I’m not convinced we can deliver on it,” he said.
Opportunities for Public Comment
• Public Forum: Tuesday at 4 p.m. at the Rutland Regional Medical Center
• Public Forum: Wednesday at 9:30 a.m. at the Brattleboro Retreat
• Public Comment on the Green Mountain Care Board website: http://gmcboard.vermont.gov/board/comment
• Green Mountain Care Board Meeting: Thursday at 11 a.m. in Newport at the Newport City Inn and Suites, Conference Center, 444 East Main St. (this time and location has been changed from earlier notices)
