OneCare Vermont, which is jointly owned by the University of Vermont Medical Center and Dartmouth-Hitchcock Medical Center, submitted the budget Friday.
The Green Mountain Care Board regulates hospital budgets and health insurance prices. It is setting up a process to regulate budgets of accountable care organizations, or ACOs, such as OneCare.
ACOs were created under the Affordable Care Act to allow doctors to coordinate patient care across different companies without violating antitrust laws. In financial terms, ACOs serve as intermediaries between insurance companies and health care providers, including hospitals.
OneCare is planning to accept money from Medicare, Medicaid and commercial insurance companies starting Jan. 1. From there, it will put several hospitals on fixed budgets to take care of patients, thereby putting the hospitals at risk of losing money if they don’t keep their patients healthy.
OneCare considers this risk-taking a milestone in health care reform because the company is taking on responsibility that, historically, only insurance companies have been able to do. At the same time, the benefits for insurance customers will not be affected.
Another ACO, Community Health Accountable Care, which represents community health centers, will also be required to submit a budget to the Green Mountain Care Board this year.
Another $29.3 million of the budget is money that OneCare will put into population health initiatives to better fund primary care, coordinate care for some of the sickest patients in Vermont, and invest in housing assistance.
The remaining $12.5 million is operating expenses, and about half of that includes paying the salaries and benefits of 47 workers, including 14 managers. Salary and benefits for Todd Moore, the CEO of OneCare, were $519,467 in 2014, according to the most recent data available.
Moore, who has been leading OneCare since it started in 2012, said he is excited about submitting the budget and moving forward with ACO reform. “This is a huge step,” he said. “This is a step that the state’s been planning for for years.”
Moore said OneCare’s operating budget of $12.5 million can reasonably be considered administrative costs. He said that the number is in line with national benchmarks for insurance companies.
“That feels right to me,” Moore said of the operating expenses. “Ultimately this will replace money that’s already out there in the system.”
Additionally, he said because OneCare is taking on some of the duties of insurance companies, including Vermont Medicaid, then insurers will, over time, be able to lower what they spend on administration.
And while OneCare will be taking on duties of insurers, Moore said the point of OneCare is to act like a coach to hospitals and health care providers in communities so they can coordinate patient care and get to the root of problems that their patients are facing.
“At a certain point we help provide sort of the cadence, the resources, the bandwidth to help them proceed and change, almost in sort of a consultant capacity,” Moore said.
“It’s coaching and just enough doing that if they don’t have the time for it, we’ll help push things ahead, but it’s got to reflect their passions and priorities as well as what we’re accountable for as an ACO,” Moore said.
At a presentation to lawmakers Tuesday, hospital administrators, doctors and a nurse practitioner who participate in OneCare told about how the accountable care organization helps them treat patients better.
Dr. Jim Ulaer, a primary care physician and an associate vice president for the UVM Medical Group, used the example of a patient coming in with a bad cough, and a doctor who suspects the person might have pneumonia.
Ulaer said insurance companies will pay him more to prescribe an antibiotic and issue a test for pneumonia, when the best thing for the patient may be to have a conversation about how the patient can take care of herself.
He said that points to why the current payment system — being paid for each individual test and service — is outdated and should be replaced with what OneCare is moving toward — fixed budgets for hospitals and doctors offices.
“It’s like wearing a shoe that doesn’t fit anymore,” Ulaer said of the current way he is paid for services. “So many of my colleagues and I are ready to be paid for the right things, to be incentivized in the right ways.”
Depman described a young woman who was pregnant and came in with stomach pain. He said that while it would be easy to refer her to an obstetrician and gynecologist, the woman’s real problem was substance abuse.
“She’s really there because she’s worried that her drug addiction is hurting her baby,” Depman said. “I need to get her right now back to AA to to talk to someone about her substance abuse.”
He also told the story of an elderly woman who came into the emergency room from a very rural part of the state. “What drove her to the ER really? It’s not an ambulance; it’s social isolation. It’s lack of transportation. It’s lack of food,” he said.
“If I don’t recognize that and start the team thinking about that today, her health outcomes will be different,” Depman said. He said if the net outcome of OneCare’s coordination and coaching “is half-empty emergency rooms, we’ll have succeeded.”
OneCare’s budget earmarks the majority of the $29.3 million in population health investments to primary care. Of that total, $5.6 million would be used to give doctors like Ulaer and Depman positive incentives to improve those patients’ health outcomes.
An additional $7.6 million of the $29.3 million in population health investments goes to help coordinate care for the riskiest 16 percent of patients, who often have multiple health problems. As part of that program, some patients will get phone calls every month from their doctor’s office to check in on how they are doing, Moore said.
OneCare has also earmarked $1.8 million from the $29.3 million to give primary care doctors monthly payments that supplement the work they do. Moore said OneCare would invite independent primary care doctors in private practice to participate.
“We needed to invest in all types of primary care, whether they’re hospital-employed, (community health centers), or independent practice, so that’s what this budget does,” Moore said.
The Green Mountain Care Board is creating a regulatory process for OneCare’s budget and budgets of other ACOs starting Jan. 1. The board is considering budgets it receives this year, including OneCare’s, as test budgets because the board has not finalized regulatory rules for ACOs.
On Thursday, the board’s staff will hold a hearing to help come up with a rule on ACO regulation. Board members have also scheduled a hearing on OneCare’s budget for July 13. The board will then make a decision on whether to approve OneCare’s budget.
