Commentary

John Klar: An unaccountable accountable care organization

Editor’s note: This commentary is by John Klar, who is an attorney, farmer and writer from Brookfield, and a candidate in the 2020 Republican primary for governor.

OneCare Vermont is a novel effort to unify health care services in the Green Mountain State under what is called an “accountable care organization” (ACO). This experimental system is defined as a “… new test of an alternative payment model [designed to] … transform health care for the entire state and its population.” Health results are impossible to gauge in the short term, but criticism has been directed at OneCare’s alleged failure to provide documentation of services, even as it seeks an additional $4.5 million in state funds for its next fiscal year.

Doubts are justified: this accountable care organization does not appear to want to be held accountable. Though it is not a nonprofit entity, its director of finance, Tom Borys, recently stated that “… OneCare is not seeking a profit.” But by this is meant that OneCare is a for-profit corporation that is losing money, and it seeks more taxpayer funds to assure that it breaks even.

Someone is definitely profiting — OneCare apparently pays $11,776,602 in salaries and benefits to 77 employees, which would average $152,942.88. The actual salaries are unknown to the public: OneCare refuses to disclose them, “… and refused to open up its books to public scrutiny and fought a change in state statute that would have given the state auditor expanded access to financial information.”

The salary figures look suspicious — the company expended $19,276,749 out of $62,392,815 on administrative costs last year, or 30.9%. When Borys was asked “… how much is an appropriate portion of overhead, he said he didn’t have an exact figure.” Not a very accountable organization — no records of alleged programs for which the public was charged; a refusal to disclose salaries; high overheads, but no “exact figures” on what is a reasonable level of administrative expenses. 

These overhead margins would be quite high for a charitable organization (that was not seeking a profit): charities typically spend 15% on overhead and 10% on fundraising. Since OneCare gets its funding directly, it appears to be spending about twice what a nonprofit would spend on overheads. That it is spending 61.1% ($11,776,602/$19,276,749) of that overhead on salaries is quite unusual — such a high proportion of salaries is more likely to be found in an accounting or law firm.

A Vermont citizen might thus query whether that $19,276,749 might have better served patients than administrators. 

The watchdog of OneCare Vermont is the Green Mountain Care Board, which is described this way by the governor’s office:

The Green Mountain Care Board (GMCB) is an independent group of Vermonters charged with ensuring that changes in the health system improve quality while stabilizing costs. The Legislature assigned it unprecedented responsibility for all the major factors influencing the cost of health care. 

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But this “independent group of Vermonters” is paid quite well to serve as the administrative body that oversees the administrative body (OneCare) that oversees our health care system to make it less costly. GMCB Chairman Kevin Mullin receives $158,620.80 annually; the other four board members receive $105,747.20. Total Green Mountain Care Board staff salaries approximate $3 million annually (the state employee website lists 33 employees at Green Mountain Care Board, which would average about $90,900 each).

Mullin touts (“independently,” of course) the virtues of OneCare. Hopefully, he and the Green Mountain Care Board will disclose OneCare’s salaries (how else to evaluate whether it is fair to grant another $4.5 million in state funds?). Also, Mullin will doubtless examine what expenditures were included in these other (p. 21) OneCare Vermont administrative accounts:

contracted services $1,173,970; software $3,726,889; travel $103,250; occupancy $456,859; other $485,500; meetings $35,700, professional development $103,238; risk protection $1,075,912. 

OneCare’s CEO, Vicki Loner, contends that “OneCare has made significant efforts to bring in news organizations, policy makers, and other interested parties to answer questions and share information. All combined, OneCare has invested hundreds of hours to be a transparent organization.” 

Those hundreds of hours are paid for by taxpayers (all combined). It would likely take only 15 minutes (all combined) to provide salary information relating to the employees of what is essentially a quasi-state entity.  

Vermonters are burdened with increasingly unbearable property taxes. Health care costs skyrocket, state worker pensions are substantially underfunded, and yet the government creates more and more employment for state agencies. Examining the track record of entities like OneCare Vermont, citizens are doubting whether AnyoneCares, especially within the bloated dome of the Montpelier Legislature.

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Eileen Andreoli, Winooski


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Gena Melissa

Part of those “contracted services” are the $7,700 every month paid to Rachlin Downs Martin – specifically Lucie Garand to lobby those in the golden dome to continue support for what’s quickly becoming a too big to fail entity.

Jay Marsh

After re-stating the question for specifics to multiple public requests for HOW savings were achieved, OneCare restates its talking points with no specificity in its most recent 11/22/19 budget responses:

15. Slide 8 of the October 30 presentation describes your financial results from 2018. What are the main drivers of your 2018 savings? How do you plan to achieve results going forward?

“The main drivers of 2018 savings included: • Entering into value-based care contracts that invert the financial incentive structure to reward efficient high-quality care rather than volume. • Facilitating a care coordination program for high risk patients that includes technological tools, best practice guidance, data, and access to other OneCare providers. • Providing capitation payments for hospitals that shift reimbursement away from a fee-for-service methodology
OneCare plans to achieve results going forward by continuing to enter into value-based contracts…”

Chet Greenwood

Do I see a parallel with Efficiency Vermont – a quasi-public organization that implodes in bureaucratic overhead and when they reach the limit just petition the legislature for more funding. The Legislature never says no to more taxes- taxpayers have no say except for voting booth.

Karen McIlveen1

Is anyone else sick of bureaucrats, lobbyists, corporations and “appointed” laypeople interfering and monopolizing our health care, our utilities and basically our lives and the lives of our families? These treaties reek of years gone by, empty promises and control.

Gary Dickinson

VT is the home of middle-manager, taxpayer-funded grifters.

Frank Westcott

Does anyone still think Vermonters are not being swindled?

Gail E. Graham

33 employees at GMHC?!! And__the salaries! It just continues to get worse. Thanks to Mr. Shumlin.

John M Farrell

Does the public have access to the salaries of Vermont State employees? If it does than why does the public NOT have access to One Cares? Sounds to me like OneCare is just another scheme to provide high salaries to executives. I say disband OneCare and STOP
supporting it financially.

ArtSpellman

Well stated Mr.Klar.

Bob Zeliff

If one looks at the big picture of hospital costs, really want better health care and lower costs, I don’t know why so many people rail at One Care. Understand total One Care Admin cost are less that 2% of the Medicare/Medicaid (sponsors of One Care) spending. One Care has the potential of saving many, many times that amount!

There is a lot of confusion. One Care has nothing to do with property taxes. One Care objective include lower health care cost by doing away with the wasteful, inefficient, and corrupting fee for service model we have now, has nothing to do with state pension costs, is NOT as state agency. Salary jealousy is an easy string to pull, however I agree they seem excessive for Vermont, but let’s not throw out the baby with the bath water. ( I expect I’d be jealous of the executives salaries at Dealer Dot Com too)

I do fully agree One Care needs to put more effort for transparency.

Jeffrey Kaufman MD

Are the known salaries paid for full time employment? I’d look at the remuneration differently if this income was for part time work.

Mary Alice Bisbee

As a member of our one and only Vermont ACO, One Care, I just received a check from CMS for $25 because I am using this wonderful service! Is this how our money should be spent?

Louis Meyers, M.D.

And let’s not forget Al Gobeille’s $650,000 per year salary. He was the architect and former regulator of OneCare, and now works for the institution he was regulating.
If there is one thing we have learned from the Trump impeachment hearings, it is the meaning of the Latin term “quid pro quo.”

Gena Melissa

“And let’s not forget Al Gobeille’s $650,000 per year salary.”

NOR former Vermont Medicaid Deputy Commissioner Michael Costa now serving on OneCare’s board of directors after dispersing tens of millions of dollars in incentives to them since 2017.

John Greenberg

Mr. Klar provides a link (which further links to Charity Navigator) for his statistic about non-profit overhead “typically” being 25%, but as someone who has read hundreds of non-profit accounts over the years, that’s not my experience at all.

In fact, it is not uncommon for organizations to exceed 40% overhead. Some agencies have “naturally” higher overhead expenses (e.g. art museums and, more pertinently hospitals). Unless the buildings housing these are considered part of their program, they must be considered administrative and they are expensive.

The Better Business Bureau (and before it, the National Charities Information Bureau with which it merged) set their maximum overhead standard at 40%, not 25%.

Finally, in many instances, executives are well (or over) compensated while overall administrative costs remain low.

As to Energy Efficiency Vermont, its overhead is under 12%; that is, unusually low. My intent is to state the facts, not to defend OneCare or EEV.

 

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