[T]he Legislature’s independent budget analysts say there are numerous outstanding questions about the proposed all-payer model to overhaul Vermont’s health care system.
The Joint Fiscal Office published an issue brief Friday asking what role the Legislature will play in carrying out the model and whether it is appropriate for the state to use a system based on a single accountable care organization.
Legislative fiscal analysts also questioned how the state could improve access to primary care physicians without a detailed plan. JFO said independent doctors are better than hospitals at offering low-cost, high-quality care.
The questions from the non-partisan Joint Fiscal Office come as Green Mountain Care Board is scheduled to vote as early as Wednesday on whether to sign the all-payer deal with the federal government. Both liberal and conservative advocates are also raising concerns.
The proposed regulated health care system is based on an accountable care organization called OneCare Vermont, which is owned by the University of Vermont Medical Center and Dartmouth-Hitchcock Medical Center.
Gerald Friedman, an economics professor at the University of Massachusetts at Amherst, called the all-payer model “a scam” to enrich the UVM Medical Center “under the cover of doing something about health care.”
“Fletcher Allen (the UVM Medical Center) is just going to use the system to keep bringing service to itself, and drive up their prices,” Friedman said. “If I were a provider outside of their network or outside of their system, I would be nervous.”
Todd Moore, the CEO of OneCare, said there is no way the system would be able to siphon off patients to UVM Medical Center. He also said he welcomes strong regulation because the success of the model will depend on gaining public trust.
Dr. Bob Emmons, an independent psychiatrist, criticized the deal as intentionally opaque “because if people see the details ahead of time, they might not like it. And as a physician, that’s not what I do as a physician.”
“We shouldn’t do something that you can’t boil down into a paragraph that everybody should understand,” Emmons said. “And if you can boil (this proposal) down into a paragraph yourself, then you don’t understand it.”
A single-provider system
The central idea behind the all-payer model is to put nearly every doctor and hospital in the state under one umbrella organization— a single monopoly — over the course of five years.
The umbrella company, the Vermont Care Organization, would be an extension of OneCare, whose employees work for the UVM Medical Center.
Vermont Care Organization will become an accountable care organization and nonprofit that sweeps in local hospitals, independent doctors and community health centers.
The all-payer waiver deal with the feds allows Vermont Care Organization to use Medicaid, Medicare and commercial insurance for health care payments. Instead of using the current fee for service payment system, payments will be made based on patient populations. The idea is that shifting away from fee for service will save money.
But economists and others question whether Vermont Care Organization will reduce health care spending. The plan restricts or “capitates” how much money is available for each patient while at the same time allowing Medicare patients to use health care services on an unlimited basis.
The structure has never been tried in any other state. Two large hospital systems — Kaiser Permanente and Cleveland Clinic — are the two most comparable examples.
Kaiser Permanente is a health maintenance organization, or HMO, that owns several hospitals and saves money by restricting patient access to certain doctors and procedures. The Cleveland Clinic is an academic medical center that promotes collaborative patient care.
In Vermont, Gov. Peter Shumlin has promised that the new system would lower health care costs, improve quality of care, and allow Vermonters to keep seeing the same doctors they have now — without restriction — while spending more time with them at office visits.
“This is not an HMO, which was a glowing disaster, where insurance companies got in the way of consumers being able to choose who took care of them,” Shumlin said. “This in no way limits a Vermonter from choosing their health care provider at any time in any place in any state.”
In addition to promising consumers they can keep seeing any doctor they want, the state is telling the federal government that the all-payer model would help up to 12,000 Vermonters get primary care physicians who don’t already have them.
That’s despite a finding in 2012 that nearly half of Vermonters had been told by doctors’ offices that they were not accepting new patients. The state has not outlined a plan to recruit additional primary care doctors, but it has pressured independent primary care doctors to join the umbrella company to form the new health system.
Al Gobeille, the chair of the Green Mountain Care Board, said the private sector Vermont Care Organization will increase access to primary care. He said the model would incentivize the private sector to train more primary care physicians, nurse practitioners, and physician assistants.
“If you change the incentives in health care, and you pay a group of providers differently, it makes taking care of people before they’re sick the priority,” he said. “And so therefore more money and time and attention is put into primary care and prevention than is put into acute care.”
Darcie Johnston, the founder of the conservative group, Vermonters for Health Care Freedom, says none of those arguments add up, and that state officials need to prove that the plan will work.
“The carrot in this whole thing for primary care doctors is that they’re going to be paid more, and (state officials) don’t have a plan for that,” Johnston said. “We don’t know where that money is coming from. We don’t even know how much money that is.”
She said the only way for the state to save money under this model is to ration care. She said the model “may eliminate some unnecessary treatment and services, but it is inevitable that some beneficial treatment will be lost in the process.”
Friedman compared the accountable care organization model to the HMO model that was popular in the 1990s. He said the downside is that ACOs encourage doctors to perform as little care as possible.
“Potentially there’s nobody advocating for you and your health care needs,” Friedman said. “If the doctors are managing the ACO or someone’s telling the doctors what to do, everybody’s financial interest over there is to provide limited care.”
Friedman said HMOs typically saved money by setting up a small network and restricting patient access to doctors outside of the network, and bargaining down the prices they pay doctors within their network.
An open network would have a harder time bargaining down the prices they pay doctors, Friedman said, but the bigger issue he sees is with having the Vermont Care Organization controlled by the UVM Medical Center.
Friedman said the UVM Medical Center would not drive down the price of the care its own providers give. He said the most wasteful health care spending in Vermont is probably taking place at the academic medical center.
Unprecedented regulatory structure
The Green Mountain Care Board has not explained how it will regulate the ACO. The board has said in public documents that one of the main goals of the model is to “foster provider-led reform.”
The Joint Fiscal Office warns that implementation of the all-payer model “requires a knowledgeable staff, strong administrative skills, and comprehensive reporting to the federal government” but says it is “currently unclear if the commitment to make this system change a success will exist at the leadership level.”
The office’s issue brief asks how the model will affect the Green Mountain Care Board’s hospital budgeting process, and if regulators “have the ability” to oversee a single provider that will be responsible for the care of up to 70 percent of Vermonters and 90 percent of Medicare patients.
Shumlin said Sept. 15 he is confident the board can regulate the organization because of how it has regulated hospital budgets. “The outcomes have been extraordinary,” he said. “They’ve held health care spending in hospitals to the lowest level in four decades.”
Moore, the CEO of OneCare, said the new health care system would be easier to regulate with a single accountable care organization. He said the board, which regulates insurance prices and hospital budgets on an annual basis, would likely need to add an ACO review process.
Moore said, in order to make the model work, there will need to be a well-designed regulatory structure that’s transparent and earns the public trust.
Friedman warns that UVM Medical Center “is going to be able to manipulate the whole system, protect its own markets, protect its own prices, to bring more wealth and glory to Fletcher Allen. And they’re doing this in the name of economies (of scale)? I would suspect that the biggest source of wasteful spending is inflated prices at Fletcher Allen.”
