Editor’s note: This commentary is by Ron Holland, an emergency physician and policy analyst who works at North Country Hospital in Newport.
On April 13 in Montpelier, the Green Mountain Care Board held a contest between the proponents for a cost-saving ambulatory surgical center (Green Mountain Surgery Center) and the current health care system.
It was a bit of a lopsided contest. In one corner was David, representatives of the group of 16 physicians who are proposing to build a new ambulatory surgical center. In the other corner was Goliath, the entire Vermont health care establishment (UVM Medical Center, Vermont Association of Hospitals and Health Systems, Northwestern Medical Center) who are the current providers.
The prize was a certificate of need, the go-ahead from the Green Mountain Care Board to build the surgical center. David, understandably, thought it was a good idea. Goliath, not at all.
The contest occurred in an overcrowded, poorly ventilated conference room in a small state, but it directly addresses one of the most difficult questions of our times: How to balance the costs and benefits of health care in the U.S. economy. Other developed countries have better health outcomes at about half the U.S. cost. National resources spent on health care are not available for other goods such as education that have a long-term positive dividend. Each state spends more on low back pain that it does on law enforcement.
This event occurs within the context of repeated failure to moderate U.S. health care costs since the 1980s. In 2001 the Institute of Medicine (IOM, the branch of the National Science Foundation that’s devoted to medicine) wrote that “the difference between 2001 health care and the health care that we could have is not a gap but a chasm.” Since that time the Affordable Care Act of 2010 reduced the percentage of uninsured from 16 percent to 9 percent while increasing the rate of growth of health care costs, as it poured more resources into an inefficient, ineffective health care system. Health care costs have risen from 13.8 percent (2001) to 18.2 percent (2016) of the GDP and are projected to reach 19.9 percent in 2025. As costs continue to increase, access will deteriorate. We are now in the fourth decade of failure in our attempt to control health care spending. Clearly, we need a new strategy.
The IOM identified six aims for building a 21st century health care system. Health policy should aim for patient-centered, safe, timely, efficient, effective and equitable health care. These features identify the criteria for evaluating a health policy. Arguments that do not directly and clearly address these features are either illegitimate, irrelevant or poorly defined. A policy option that wins on each of these features is dominant. When competing options each have some wins, a more detailed and difficult analysis is required. A close look at this contest provides insight into the nature of the forces that make controlling health care costs so difficult.
It was apparent that Green Mountain Surgery Center’s cost savings is the current providers’ revenue stream to be used by them in an opaque manner to pursue their missions.
The hearing began with Green Mountain Surgery Center proposing to build a 12,800-square-foot facility to house two operating rooms and four procedure rooms to perform 6,000 procedures annually. The proposal calls for a $1.8 million investment that will save an estimated $5.5 million annually in health care costs. Anticipating an attack on equity in provision of health care (taking only full paying patients and leaving Medicaid and charity cases to current providers, aka “cherry picking”), Green Mountain Surgery Center testified that their payor mix would not be significantly different from the current providers.
Reviewing their arguments, David has hurled two pebbles precisely at the forehead of Goliath and has scored two direct hits. First – he can provide the same health care at half the costs saving $5.5 million of current dollars annually. Second – he can do this without sacrificing equity. He has clearly and directly engaged the IOM aims. At the least, Goliath is stunned but may prove to have a cerebral hemorrhage.
Following questions to Green Mountain Surgery Center proponents from state regulators, the current providers briefly but ineffectively challenge the economics by quibbling over taxes. They did not provide a quantitative analysis of the economics from their perspective. Most of their arguments centered around their lost revenues and the existence of sufficient capacity in the region without the new facility. They presented nearly 30 PowerPoint slides largely filled with true but irrelevant/poorly defined (per IOM aims) facts and political rhetoric. While advancing the ethical purity of “not for profit” institutions and their dedication to “mission” and effective control by “regulation,” they degraded the “for-profits” and the “unregulated.”
The most concise criticism of the current providers came from board member Con Hogan. After a long presentation on their collective virtues and accomplishments, he asked current providers to explain in 30 seconds the relationships between their arguments and the proposal. A relevant (per IOM aims) answer was not forthcoming. Clearly there is a chasm between the IOM aims and current providers’ approach to health policy. It was apparent that Green Mountain Surgery Center’s cost savings is the current providers’ revenue stream to be used by them in an opaque manner to pursue their missions. Lacking quantitative analyses addressing IOM aims, current providers resorted to rhetoric.
The Green Mountain Care Board decision is due in August. State legislation identifies them as the responsible party to ensure that the Vermont health system incorporates the values found in the IOM aims. Should they decide in favor of Green Mountain Surgery Center they will align with the IOM aims and set a precedence for future decisions. Should the GMCB decide in favor of the current providers, they will perpetuate a health policy culture characterized by rhetoric and irrelevant/poorly defined information. As the current providers are major players in the accountable care reform effort “to pay for value” planned for Vermont by Gov. Peter Shumlin, a decision in their favor is worrisome for successful reform and will likely perpetuate the decades of failure to justly balance health care costs and benefits.
If we hope to improve the health of Vermonters while controlling health care costs, we must demand quantitative policy arguments focused on the IOM aims and eschew the use of political rhetoric in health policy analysis. Protecting Vermonters’ health and pocketbooks demands more than rhetoric. While there will be no legislative revolutions in health care, two decades of policy decisions that align with the IOM aims based upon quantitative analyses would take us to a very different place from where we are headed. That would be a new strategy.