Health Care

Fact-check: Scott’s claim about OneCare savings leaves out crucial context

Gov. Phil Scott delivers his budget address
Gov. Phil Scott delivers his budget address to the Legislature in Montpelier on Jan. 24, 2019. Photo by Glenn Russell/VTDigger

“In 2018, the providers the state paid through the ACO reduced the amount of money spent on healthcare services by $7.7 million.”
—Gov. Phil Scott in his budget address on Jan. 21.

Clarification: This article has been revised from its original posting, after Gov. Phil Scott’s office reached out with additional information clarifying his statement as focusing on the Medicaid patient pool. This made the statement more accurate — we changed the ruling from mostly false to half true — but Scott still left out important context about overall costs associated with the OneCare program. 

Gov. Phil Scott trumpeted the successes of Vermont’s health care reform efforts in his budget address last month.

“There are compelling stories to be told, and accountable care is showing more potential than any other health care reform I can remember,” he said of OneCare Vermont, the state’s accountable care organization.

“In 2018, the providers the state paid through the ACO reduced the amount of money spent on healthcare services by $7.7 million,” Scott said. 

That savings figure jumped out at us. Our research on OneCare has found mixed results — and an open admission from health care officials that the program has not yet created the savings they hope to achieve. Did we miss something?

We asked Scott’s office for evidence and were referred to Ena Backus, director of health care reform for the state. She cited a Department of Vermont Health Access report on 2018 results for Medicaid patients.

The $7.7 million in savings came from a small portion of Vermont’s nearly 200,000 Medicaid patients. About 42,000 of those Vermonters participate in OneCare, said Alicia Cooper, director of payment reform for the department. An even smaller portion of those patients see doctors who are paid a set fee each month, rather than payments for each procedure. 

And it’s that subset of patients — those participating in OneCare whose doctors are paid a monthly fee — who cost the state $7.7 million less to care for than was originally expected, according to Backus. 

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“That point that was made [by Scott] demonstrates that there was a change in provider behavior that we can measure,” Backus said.

Ethan Latour, a spokesperson for Scott, further clarified this point in an email to VTDigger. “Those words, STATE and THROUGH THE ACO, explicitly describe the population,” he wrote. 

VTDigger is partnering with Politifact to fact-check statements about topics that are relevant to Vermonters. Learn more about Politifact’s methodology, and see all of our Politifact Vermont stories.

The problem? Scott referred in his speech to the “amount of money spent on health care services.” 

First off, his statement implies that there were savings in the entire health care system —  not just a small piece of it. Secondly, the $7.7 million wasn’t returned to taxpayers. Under the new model, OneCare Vermont and hospitals keep the savings, as a reward for keeping patients healthy.

OneCare actually spent more money than expected — about $1.5 million — on all medical care for state Medicaid patients in 2018, if you factor in the doctors who charged traditional fee per procedure rates.  

Scott also didn’t mention that Vermont taxpayers paid OneCare $11.7 million for administrative costs that year. 

OneCare collects money from Medicaid, Medicare and commercial insurance and then distributes it as a flat monthly payment for patient care. The administrative costs and incentives paid by the state cannot be entirely divorced from savings created by the program. 

In addition, the governor cited savings in the Medicaid program but across the OneCare there were no net decreases in spending after administrative costs and incentives for providers. 

Phil Scott, Mike Smith and Ena Backus
Ena Backus, right, is the Scott administration’s director of health care reform. Photo by Mike Dougherty/VTDigger

Scott’s assessment led him to urge the Legislature to grant OneCare $5.7 million in additional Medicaid monies during the state budget adjustment process — on the condition the accountable care organization applies for nonprofit status or meets equivalent transparency standards. 

The real problem, Scott said, is OneCare’s ineffective public relations effort. In his budget speech, the governor invoked the state’s head regulator, Green Mountain Care Board chair Kevin Mullin, who in November urged the organization to tell a better story.

“I understand the ACO hasn’t done a great job explaining how they’re improving people’s health and reducing costs,” Scott said. “But there are compelling stories to be told.”

Cooper, from the Department of Vermont Health Access, said Scott’s $7.7 million assertion may be one of those stories. “At Medicaid, we‘re encouraged by these early results,” she said. “That’s enough to warrant continued testing of the model.”

Our ruling

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Scott said, “in 2018, the providers the state paid through the ACO reduced the amount of money spent on healthcare services by $7.7 million.”

That statement is partially accurate, but it does not account for the administrative costs or financial incentives paid by the state. 

Politifact’s guidance describes “half true” as: “The statement is partially accurate but leaves out important details or takes things out of context.”

Scott’s claim ignores important facts about the cost of OneCare that would lead his audience to draw a different conclusion about the program’s financial performance — even for the specific patient population that he references in his statement. 

We rate this claim half true. 

Sources

Interview with Ena Backus, director of Health Care Reform, Agency of Human Services. Jan. 24, 2020. 

Interview with Alicia Cooper, health care project director- payment reform, Department of Vermont Health Access. 24 Jan 2020

Email from Ethan Latour, Office of the Governor. Feb 3, 2020.

Vermont Medicaid Next Generation Pilot Program 2018 Performance.  Department of Vermont Health Access. Sept. 20, 2019.

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Tom Wheaton

Wow come on this article completely misses the point!! This is actually great news! That small subset of Medicaid patients Actually using doctors being paid a flat fee in OneCare saved huge money, $7.7M. This article completely miscasts the results. Come on Digger you must do better!

Andy Erickson

No, Mr Wheaton, no money was saved. The $7.7m was simply paid to OneCare and Vermont hospitals rather than to the providers treating these patients. And it cost $11m in administrative spending to realize this ‘savings’.

Andy Erickson

Please refer to p9, table 1 of the DVHA report referenced in the article above.

DVHA paid $71m (line A) for care in the prospective payment (PP) group with $68m (line F) accounted for as payments to providers. This is ~ $1m in excess of the $67m (line G) ‘shadow’ payments expected had the payments been made on a fee-for-service (FFS) basis.

The claimed $7m gap is between expected ‘shadow’ payments and zero-paid ‘shadow’ claims (line H) submitted in an effort to track what services were being provided. The estimate
depends upon providers submitting accurate zero-paid ‘shadow’ bills – an unpaid administrative task. Providers and staff are probably doing a reasonable job of ‘shadow’ billing, but are focused elsewhere.

The FFS group performed similarly. DVHA paid $51m (line M) in FFS claims vs $49m (line J) expected.

The $7m savings claim is overstated or does not exist and should not be cited as evidence of ‘behavior change’ by providers or that the PP model is saving money.

Louis Meyers, M.D.

The fundamental questions remain:
Do Vermonters understand this program?
Do Vermonters want this program?

Walter Carpenter

“Secondly, the $7.7 million wasn’t returned to taxpayers. Under the new model, OneCare Vermont and hospitals keep the savings, as a reward for keeping patients healthy.”

This is disturbing, especially as we are the ones footing the bill to privatize our Medicare/medicaid through this new layer of bureaucracy.

Lee Russ

Even focusing just on how much money was spent on the ACO-participating Medicaid patients needs to take account of OneCare’s administrative costs. But focusing only on how much was spent on that population doesn’t tell us: whether the care of those patients improved or suffered; whether any “savings” over expected costs was attributable to the All Payer model, or to improved coordination of care which could have been accomplished without employing that model; and whether providers simply billed lower costs for these patients to take advantage of the shared savings aspect of the ACO, while billing increased costs for other patients.
And the basic fact is that the ACO system does not—isn’t even designed to—provide coverage to anyone not already covered by the government or commercial insurance, or help anyone deal with deductibles, co-pays, etc.

Maryalice Bisbee

“Scott also didn’t mention that Vermont taxpayers paid OneCare $11.7 million for administrative costs that year. ”

The above is a quote from the article. What in the world is OneCare spending $11.7 million on? Are they paying for support services, housing and other human service needs that should not come out of health care dollars? Or is it just a top heavy extra layer of bureaucracy adding, rather than subtracting costs to our health spending? As a Montpelier resident, I wonder if this has anything to do with why the tax rate is going up this year due to sick employee coverage through BC/BS? Any wonder some of us think we would be much better off with a national single payer system? Federal administrative health care costs are about 2% at last check… But they don’t give $25 rewards like OneCare does, through promoting ACO’s!

Karen McIlveen1

Experiment with something else besides our health care. The bureaucrats are not medically qualified to play in this sandbox.

 

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