[A] federally funded health care reform project significantly slowed the growth of Medicaid spending in Vermont, resulting in $97 million in “relative” savings over a three-year period, a new report shows.
The report, commissioned by the federal Centers for Medicare and Medicaid Services, also shows that emergency department visits dropped from 2014-16 for those enrolled in accountable care organizations via a Medicaid “shared savings” program.
The document noted other ways in which the federal government’s $45 million State Innovation Models funding didn’t seem to positively impact Vermont. For example, there was a decrease in primary care visits among the test population, and there were “few changes in self-reported health or health care outcomes.”
Nevertheless, the report’s authors believe the federal funding had a positive impact.
“Overall, Vermont’s (innovation models) initiative was a catalyst in terms of advancing alternative payment methods and innovative delivery models focused on paying for value and quality rather than volume,” the document says.
Against a backdrop of increasing Medicaid spending, Vermont was among six states that received State Innovation Models money in 2013 from the Center for Medicare and Medicaid Innovation. The funding was meant, officials said, “to test ways to accelerate statewide health care transformation.”
Vermont already had a “strong foundation of payment model reform” prior to the receiving the $45 million, the report says. Existing programs included the Blueprint for Health and a Medicare shared-savings initiative utilizing accountable care organizations.
A shared savings program seeks to improve health outcomes while slowing expenditure growth, with insurers and health care providers sharing in any savings that result. Like the state’s current all-payer program, it’s an attempt to move away from the current fee-for-service method of health care reimbursement.
The 2013 federal money allowed Vermont to amplify its previous efforts, chiefly through launching new shared-savings programs for Medicaid and commercial insurance.
The report found that Vermont’s success with those programs during the 2014-16 federal grant period was “mixed.”
For example, the three accountable care organizations involved in the work during that time didn’t realize any shared savings from Medicare and commercial insurance programs. But there were positive results on the Medicaid side, where expenditures grew at a rate that was significantly lower than that of a control group that wasn’t involved in the reform effort.
Vermont was the only state to show such a result. State officials touted that finding on Tuesday, with Gov. Phil Scott saying “the report’s findings are incredibly encouraging and demonstrate the merit of our approach.”
“I appreciate the hard work – spanning multiple administrations – to distinguish Vermont’s health care reform efforts,” Scott said. “Being innovative in our work to limit growth in health care costs is crucial to long-term affordability, and I’m pleased Vermont is leading on this effort.”
The report also looked at how the Vermont Medicaid population that was involved in the federally funded initiative fared on key measures of health care utilization. As was the case with financial savings, it was a mixed bag.
For instance, researchers didn’t find any increase in primary care visits – a key goal of health care reform. They also found that inpatient hospital admissions increased.
However, the positives included a drop in emergency department visits over the three-year period – a decline that occurred at a greater rate than the control group’s. Emergency department use is a driver of high health care costs.
Also, while Vermont hospital inpatient admissions grew, that happened at a slower rate that was “significantly less” than the control group.
The report’s authors saw a link between their financial and health care utilization findings. Vermont’s slowed rate of Medicaid spending “is consistent with what we would expect from a a successful (accountable care organization) model and corresponds to changes we observed in utilization,” they wrote.
Vermont since has moved from shared-savings programs to the more complex all-payer model, which proposes to give health care providers who opt into the system a regular, predetermined payment with a focus on preventive medicine and improving health outcomes.
That program has attracted scrutiny from critics and has not yet signed up the number of Vermonters outlined in the all-payer agreement between the state and federal governments. But during a recent meeting in Washington, D.C., state and federal officials agreed that the program should continue moving forward, Vermont Human Services Secretary Al Gobeille said.
“They were very happy with Vermont, and they were very clear that we are leading the nation in moving away from fee for service,” Gobeille said Tuesday.
He added that the earlier, federally funded health care reform initiatives outlined in the new federal report laid important groundwork for all-payer. Without that work, “we couldn’t have gone from fee for service directly to what we have now without failing,” Gobeille said.
