[S]tate regulators on Monday approved OneCare Vermont’s 2019 budget, endorsing a more than $900 million plan that predicts significant growth in the state’s “all-payer” effort to reform health care payment.
After hearing from numerous OneCare critics, the Green Mountain Care Board enacted several provisions aimed at keeping the Colchester-based organization’s administrative expenses in check.
Board Chair Kevin Mullin said he will also personally ask OneCare to disclose compensation information for its top administrators.
But the board did not, as several critics had suggested, postpone action on OneCare’s budget or take measures to significantly change the organization’s operations. Mullin said board members “don’t want to squeeze the resources so that they cannot be successful no matter what.”
At the same time, “my concerns are that we have to strongly regulate them, because we are the only oversight,” Mullin said. “So it’s something that keeps you awake at night as you try to figure out the right balance.”
In a statement issued Monday, OneCare CEO Todd Moore said he was “pleased that the Green Mountain Care Board has approved the OneCare budget as a signal of Vermont’s commitment to real health care reform under the all-payer model to improve how care is delivered to Vermonters, while reducing cost growth.”
OneCare is an accountable care organization coordinating the all-payer model, a five-year experiment resulting from an agreement between Vermont and the federal Centers for Medicare and Medicaid Services.
In an effort to control costs and improve the health of Vermonters, officials are trying to move away from a fee-for-service model in which providers are paid based on the number of tests and procedures they perform.
Instead, all-payer proposes to give providers who opt into the system a regular, predetermined payment with a focus on preventive medicine and improving health outcomes. Those “population-based payments” are supposed to provide more stability for insurers and more flexibility for hospitals and clinicians.
A key all-payer goal is containing annual health care cost growth to 3.5 percent or less. The model also emphasizes improved health care quality, and the state has set three specific goals in that regard – reducing chronic disease; reducing deaths due to suicide and drug overdose; and increasing access to primary care.
Participation in the model is voluntary, and OneCare has not been keeping up with growth targets in the all-payer agreement. Nevertheless, the organization’s 2019 budget reflects significant expansion in the number of hospitals and patients who are involved in the organization.
The total cost of care — meaning the money flowing from insurers to providers — is expected to rise from $607.2 million in the current year’s budget to $850.7 million in 2019.
That number has attracted scrutiny, and that’s “understandable” given its size, said Michael Barber, the care board’s chief of health policy. But he said cost of care funding is “not revenue to OneCare in the way that most people would think of revenue.”
“Indeed, many of the dollars flow around OneCare, and of the dollars that do flow to OneCare, most of them flow back out again to providers,” Barber told board members Monday.
Care board member Tom Pelham added that the cost-of-care budget doesn’t represent “new money” being introduced into the health care system. “This is moving money from outside the (accountable care organization) – that by and large already exists in the health care system – to inside the (organization),” Pelham said.
However, OneCare also is seeing growth in other areas of its 2019 budget.
Population health management spending – which is health care investment that’s supposed to further the all-payer model – is set to grow by $10 million to $37.2 million. And operating costs are proposed at $15.9 million next year, a $3.4 million increase.
The care board’s review of OneCare’s proposal was lengthy and, at times, contentious: Among the 33 public comments submitted to the board, most were critical of OneCare’s budget or raised questions about transparency, bureaucracy and performance.
That trend continued during an extended public comment period last week. For example, Disability Rights Vermont Executive Director Ed Paquin said his organization “does not have ideological opposition to the all-payer model, or to capitated payment reform or even to the concept of accountable care organizations.”
“We do not, however, see that the development of the current single player, OneCare Vermont, has had regulation robust enough to ensure that more people get access to better, more affordable care,” Paquin wrote.
Supporters also have weighed in. They include Dr. Robert Wildin, a University of Vermont Health Network employee who said he “took a job here last year and relocated my family here because Vermont is moving toward a rational health care finance system.”
“OneCare may not be perfect, but it is not experimental (in the sense that it mimics what works in other countries, within constraints), and it positions us to improve access by focusing on efficient quality and prevention, freeing up resources for basic care,” Wildin wrote.
In their vote to approve OneCare’s budget on Monday, care board members adopted 16 conditions outlined in a staff memo with little revision. Those conditions include a variety of reporting requirements; limits on the amount of financial risk OneCare can assume; minimum investment amounts for population health management; and a requirement that the organization hold at least $3.9 million in reserve by the end of next year.
Board members also adopted conditions aimed at keeping the growth of OneCare’s administrative spending in check. For example, administrative expenses currently are set at 1.77 percent of revenues, and that percentage must stay the same even if OneCare’s revenues grow “unless otherwise approved by the board.”
Also, the board accepted a condition proposed by board member Robin Lunge: Over the life of the all-payer agreement, OneCare’s administrative expenses should be less than the health care savings generated under all-payer.
Lunge said those savings should include allowances for health costs that are avoided due to improved quality of care.
“I don’t think it’s a simple calculation,” she said. “But I do think it’s important to set for (OneCare) the expectation that they’re mindful of their administrative expenses.”
In a related matter, the care board did not adopt Pelham’s suggestion to develop a process by which OneCare reports on the salaries of its top administrators.
OneCare is a limited liability corporation created by University of Vermont Medical Center and Dartmouth-Hitchcock Medical Center. So, unlike nonprofits, it doesn’t have to submit a federal Form 990 showing administrative earnings.
In the absence of board action on the matter, Mullin said he would write a letter to OneCare requesting the same salary information that a nonprofit would disclose in a Form 990.
“The purpose isn’t for us to do something with it, but it’s just to create transparency for the public, which is paying for a large portion of this through Medicare and Medicaid dollars,” Mullin said.
“It’s consistent with what we do for hospital budgets, to request the information for transparency purposes only,” he added. “I don’t see why (OneCare) should be treated differently than that just because they’re a for-profit versus a nonprofit organization.”
