[A] small health care reform company that has stayed separate from a larger company managed by the University of Vermont Medical Center has announced it will fold.
Community Health Accountable Care, which is owned by community health centers, issued a news release Oct. 19 saying it didn’t have the money to operate beyond Jan. 1.
The decision leaves just one option for primary care doctors who want to participate in Vermont’s new system of health care reimbursement, known as the all-payer model. They would have to join OneCare Vermont, which is half-owned by the UVM Medical Center.
As the state works to make sure that every Vermonter has a primary care doctor, patients will increasingly be seen by doctors who are in the OneCare network. As recently as 2014, those doctors could have chosen to join any of three such companies.
Dan Bennett, CEO of Gifford Medical Center in Randolph, is the chair of the board of Community Health Accountable Care. He said the company is folding because it doesn’t have enough money to exist.
The company told regulators at the Green Mountain Care Board this year that it needed $1.4 million to support operational expenses that include information technology and accounting.
“CHAC does not have the funding, the requisite funding to be able to support that infrastructure,” Bennett said in an interview. “If we had the funding available, we would continue.”
The impact of CHAC folding will be felt most directly at an administrative level and within the health care reform community. The impact on patients is unclear.
CHAC’s uncertainty in health care reform
CHAC and OneCare are administrative entities known as accountable care organizations, or ACOs, a type of company created under the Affordable Care Act.
The state of Vermont has backed ACOs as a key part of health care reform. The idea was to have providers join ACOs to coordinate care in a way that will make patients healthier, and eventually bring down costs.
But CHAC and OneCare have pitched two different types of health care reform: CHAC has sought to have a business model where its providers receive bonuses for saving money treating patients; OneCare wants to act similarly to an insurance company, and have its providers take on financial risk for patients.
Since 2014, CHAC has negotiated contracts with Medicaid, Medicare and commercial insurance companies to receive bonuses in exchange for having its health care providers save money on treatment.
As Vermont has moved forward with its all-payer model, CHAC has pushed back against a full merger with OneCare, the ACO jointly owned by the UVM Medical Center and Dartmouth-Hitchcock Medical Center.
CHAC’s business model is appealing to a company that has fewer assets than OneCare, because it has no downside risk. OneCare, however, is able to use the balance sheets of the state’s largest hospitals, including UVM Medical Center, to take on the same amount of risk that formerly only insurance companies could, and could potentially lose money if patients don’t get healthier.
However, supporters of the all-payer model, based on an agreement then-Gov. Peter Shumlin signed with the federal government in October 2016, envisioned having all health care providers in Vermont operating under the same ACO, which many believed would be OneCare.
Under the all-payer model, the long-term vision is to have the ACO receive monthly payments from Medicaid, Medicare and private insurers and pay doctors for the quality of care they provide. That model is what OneCare has been moving toward and advocating for during the past several years.
Additionally, Dr. John Brumsted, the CEO of the UVM Medical Center, has said the state should have only one ACO because of its rural nature. In September, he said competition among ACOs is “the dumbest thing you could possibly do.”
To achieve the goal of having a single ACO, staff for the Green Mountain Care Board facilitated meetings for nearly two years to encourage CHAC to join with OneCare and the now-defunct ACO associated with HealthFirst, the trade group for independent physicians.
At the end of those negotiations, in July 2016, CHAC agreed to share a CEO with OneCare and create an umbrella company called the Vermont Care Organization that would put them on track toward merging. HealthFirst agreed to dissolve its ACO in exchange for seats on the Vermont Care Organization board of directors.
However, the Vermont Care Organization has also essentially folded. In May, its board of directors decided to rework its long-term vision and priorities. Just days after the vote, the CEO of that organization resigned.
Now independent from OneCare, CHAC told the Green Mountain Care Board in July] that it was struggling to get the same type of health care reform contract with Vermont Medicaid that it had from 2014 to 2016.
Vermont Medicaid, meanwhile, has been moving toward the same type of health care reform that OneCare has been spearheading: to have hospitals, instead of insurance companies, take on financial risk for the outcome of patients’ care.
Al Gobeille, the secretary of the Agency of Human Services, helped set up the all-payer model when he was chair of the Green Mountain Care Board. He said he was not surprised by CHAC’s decision to fold.
Gobeille said he helped set up the all-payer model as a “coalition of the willing,” meaning he wanted to encourage health care providers to come together to reform the way they are paid, not force them.
He also pointed to a financial challenge that community health centers, which own CHAC, are facing throughout the country. In Vermont, community health centers are faced with losing two-thirds of their federal funding.
Gobeille said the all-payer model is “absolutely” going forward.
One remaining ACO in Vermont
Bennett, the chair of CHAC’s board, said the individual community health centers that were part of CHAC will need to decide whether to participate in OneCare’s various health reform programs.
OneCare is a much larger company than CHAC and has budgeted $12.5 million for administration and operations in calendar year 2018. That’s nearly 10 times the $1.4 million that CHAC said it struggled to raise to keep its doors open.
Additionally, OneCare has more than 160 health care entities, including 10 hospitals, that are planning to participate in its multiple health reform programs that start Jan. 1. By comparison, CHAC has just eight community health centers in its network, according to its website.
OneCare is moving to expand. Its CEO is now also the CEO of the New York-based Adirondacks ACO, which is also owned by a hospital within the UVM Health Network. The shared CEO is now working on a strategic plan to merge operations between the two companies.
“It’s really not about us talking about OneCare or CHAC,” said Cory Gustafson, the commissioner of the Department of Vermont Health Access. “It’s us talking about, ‘What are we going for in the state of Vermont in terms of payment reform and delivery?’”
Gustafson said the state’s Medicaid program was willing to participate only from 2014 to 2016 in the type of programs CHAC participated in and does not plan to offer it again. Moving forward, Vermont Medicaid is focused on the type of reform OneCare is spearheading.
“From us, we’re really focused on payment model evolution, and that evolution is moving to value-based payments” that reward health care providers for producing quality outcomes instead of providing as many services as possible, Gustafson said.
OneCare’s health reform programs for calendar year 2018 are based on the company acting like an insurance company — taking on financial risk from Medicaid, Medicare and insurance companies such as Blue Cross Blue Shield, to provide care for patients.
Historically, CHAC has had health reform contracts with Medicaid and commercial insurance companies such as Blue Cross Blue Shield of Vermont in which, instead of CHAC taking on risk, the insurers give CHAC’s providers bonuses for saving money on patient care.
Bennett said CHAC was not able to get a contract with Vermont Medicaid for calendar year 2018 and did not finish contracting with Blue Cross. He said the company would have gladly stayed together and maintained just one program with Medicare if it had the $1.4 million to set up operational infrastructure.
And Gustafson said Medicaid was not interested in CHAC’s version of health care reform.
“There has to be a quality measure and a risk measure,” Gustafson said. That means allowing health reform companies like OneCare to take on the actuarial risk in place of the insurance company, such as Medicaid, doing so, Gustafson said.
Gustafson said the state continues to negotiate with OneCare on a payment reform contract for 2018. However, “we’re not going to run two programs at the same time (one for CHAC and one for OneCare) because there’s a lot of work that goes into just building them,” he said.
Bennett said he feels “very strongly” about CHAC and its members. He said the community health centers have been doing work to improve the health of Vermont’s population in a holistic way.
Under the bonus-based programs, Bennett said, CHAC members reduced the total cost of health care for their patients by around 5 percent — from about $190 per person per month in 2014 to about $181 per person per month in 2016.
“The member organizations that are in CHAC, they’ve been doing this kind of work, providing personal, individualized care for people in their communities for decades, and really have embodied the goals and the outcomes that we’re all looking to get out of health care reform,” Bennett said.
“We’ll continue on those aims,” he said. “We’ll continue doing the good work that we’ve all done and trying to find what our place is in the health care reform activities and the all-payer model.”
