The Green Mountain Care Board approved OneCare’s $1.4 billion budget Wednesday, but urged the organization to do more to track its success in rolling out Vermont’s health care reform efforts.
After rebuking the company for increasing salaries, the board cut administrative and salary costs back to 2019 levels.
“We’ve struggled with how to think about the magnitude of administrative expenses at OneCare this year,” said Alena Berube, director of health systems policy for the board. “We really need mission-based people in our health care reform efforts.”
The vote was 3 to 1, with board member Tom Pelham dissenting and Maureen Usifer absent.
Officials say 2021 will be a decisive year in determining the success of OneCare, which is in its fourth year of a five-year agreement to change the way health care is funded in Vermont.
Under the all-payer model, the company collects money from Medicaid, Medicare and private insurers and funnels the money to the hospitals. It’s in charge of shifting the state away from payment per procedure and toward “fixed prospective payments” — regular, monthly payments to hospitals. The goal? To focus on preventive care and reduce health care costs.
But OneCare hasn’t rolled out the changes as quickly as originally intended. Only about 238,000 Vermonters, 46%, are included in OneCare at this point — well below the 62% target set by the feds.
Doctors and hospitals have also objected to the constraints of the all-payer setup in the last several months, saying costs and administrative burden are too high. In response to the complaints, OneCare reduced the financial risk that hospitals take on.
In November, the state rolled out a plan to “reboot” the all-payer model.
As part of the budget approval Wednesday, the board included 17 conditions, including increased reporting, and new requirements for financial risk and reserves.
The board encouraged OneCare to accelerate the shift from fee for service to fixed payments to hospitals and doctors. OneCare “is our vehicle for achieving that transition,” said Marisa Melamed, the board’s associate director of health care policy. She urged the board to work with MVP Health Care and BlueCross BlueShield of Vermont to create a plan for the change, and to include a timeline and metrics for success.
Board members also trimmed OneCare’s budget for salary and operations from about $16.1 million to $15.9 million, and reduced executive pay. Originally, the board had considered more drastic cuts.
The board asked OneCare to tie salaries to success — leaders could be paid more when the organization showed it had improved health care quality and lowered costs.
OneCare has about 65 full-time employees, down from 77 before the pandemic. It also increased spending on marketing and office space.
The majority of the budget is a pass-through, as OneCare funnels most of the money from federal payers and insurers to health care providers and hospitals.
Board chair Kevin Mullin asked OneCare to consider “creative solutions” to reduce cost.
“It’s hard to see, in the new world that’s been created by this pandemic, the need for the office space that OneCare currently has,” Mullin said. “That’s an area where there’s no additional value created for Vermonters as far as better care or lower costs.”
“OneCare has been acting very responsibly,” CEO Vicki Loner told the board. The company has cut $6 million from its operating budget since the pandemic started in March. The company has expanded in the past year, but the 2021 budget is about $3 million less than the 2020 budget, she said.
And, she said, OneCare’s work is unique. “No one has done this type of reform work in the past, so it’s not like we are an extremely mature organization where there’s a clear path laid forward,” she said. “It’s not always simple work — it’s very complicated.”
Correction: A previous version of this story inaccurately stated how the board voted on the budget.
