Editor’s note: This commentary is by Patrick Flood, the former commissioner of the Department of Mental Health, the Department of Disabilities, Aging and Independent Living and former deputy secretary of the Agency of Human Services. He is now retired and lives in East Calais.
It is clear that Vermont’s ill-advised plan to turn our health care system over to an expensive, unnecessary and for-profit accountable care organization (ACO) is failing.
The ACO, OneCare Vermont, has failed to show any meaningful reduction in health care expenditures over five years, in spite of tens of millions invested in administration and infrastructure. According to a well-researched document submitted as a comment to the Green Mountain Care Board, since 2014 the total reported losses in Medicare, Medicaid and commercial insurance totaled $70 million, with only two instances of coming in below budget for Medicaid in 2014 and 2017 for a total of $5.8 million. Most recently, in 2018 the ACO lost money in Medicaid and commercial insurance. For Medicare the ACO claims $5.6 million in savings. These losses came while spending $9 million in 2017 and $12 million in 2018 on additional administrative costs. For 2019, the current year, OneCare is predicting a loss of $8 million in Medicaid, and a savings of $7.9 million in Medicare, while spending $16 million in new administrative costs. For 2020, OneCare’s budget calls for $20 million in administrative costs. In addition, for 2020, OneCare is asking the Legislature for an additional $13.3 million subsidy. How can anyone call this a success? How is this lowering the cost of health care?
By the way, no one should accept the argument that this initiative is just beginning. OneCare has been a functioning ACO since 2013. There were additional payments and grants of state and federal dollars to OneCare in the period 2014-2016, but those numbers are not available.
What about other key results? Commercial insurance rates took yet another large double-digit hike this fall, with no relief in sight. Those rate hikes are the primary reason that school taxes will rise by up to 6% this year. Yes, your property taxes are helping to cover the out of control health care costs, led by increases at UVM Medical Center and new costs for the ACO. Small hospitals are struggling while the UVMMC banks $40 million in profit. Yet, UVMMC recently was approved for a 5.9% budget increase, above the 3.5% that had been agreed upon. In addition, UVMMC has spent $150 million on a new data system and $200 million on a new patient wing. The ACO has clearly done nothing to bring down costs, only increased them.
The quality results for the ACO at best are mixed. Several have actually worsened. For Medicare, the ACO reports earning a score of 100%, even though all they had to do was report data. The actual results for 2018 show a real score of 82.4%, worse than the year before.
Contrary to promises, this ACO is not leading to expansion or improvement of primary care. There are fewer primary care doctors today. Visits to primary care for Medicaid patients have actually gone down for Medicaid recipients in OneCare.
Most ACOs form voluntarily and these organizations fund their own administration in the belief that they can operate more efficiently and make money. Instead in Vermont we create a single ACO, and then subsidize it because it can’t come anywhere close to covering its own administrative costs. OneCare has cost Vermont far more than the pittance it has saved, with poor results. Soon OneCare will be a monopoly that is too big to fail and the subsidies will be annual and increasing.
OneCare claims to be transparent, but that has not been my experience. After reviewing the OneCare budget proposal, I had questions about the reported Medicare savings. I arranged a phone meeting with the CFO of OneCare for Nov. 6 to get an explanation only to have the meeting cancelled at the last minute, with a promise to reschedule. I have not yet heard back. Then I attended the recent GMCB hearing on OneCare’s 2018 results and asked questions about the Medicare results that were only partially answered. I was told I could contact OneCare staff for further information. I contacted the office on Nov. 25. I have yet to get a reply.
It is time to admit that this expensive experiment is accomplishing nothing substantive for health care reform in Vermont. Costs are not going down, quality indicators are not improving, primary care is not expanding, commercial insurance rates have continued to soar, access to care is no better, and not one new person has become insured because of this system. Instead it creates an expensive new layer of bureaucracy that needs to be subsidized.
I have heard it said that “there is no plan B.” But there certainly can be. Rather than spend nearly $20 million on an unnecessary new organization, we could use that money to keep Vermonters healthy by addressing the non-medical determinants of health like food and housing, providing comprehensive and affordable primary care and expanding mental health services. That would be both cheaper and far more effective and directly help Vermonters. We could use our existing service network which is well suited to the task.
Vermont will never succeed in reaching its goals of providing high quality health care to all and reducing the cost of health care by continuing down this road. We should not throw good money after bad. There is a better approach and we need to get started. We have already wasted enough time and money.