On Sept. 23, University of Vermont Health Network CEO John Brumsted had a few words for his regulators: The Green Mountain Care Board had “become untethered” from the “principles that should guide it,” he fumed in a letter asking for an amended budget. It has made decisions that “will harm Vermont’s patients and hospitals.”
Brumsted’s missive marked an unusually combative stance. Regulated hospitals are loath to publicly rebuke the five-member board that sets their rates.
But Brumsted, who oversees half of Vermont’s health care system, wasn’t alone in his rebuke. CEOs from the state's smaller hospitals criticized the board for requiring sustainability plans that may ultimately require them to cut unprofitable services.
Around the same time, members of the public also lambasted the board for raising insurance rates. “Health care in this state is administration-heavy and care-light,” wrote Michelle Wade of East Wallingford. One anonymous commenter was more blunt: “We need to abolish the Green Mountain Care Board.”
When the board was formed a decade ago, it was granted what was arguably the broadest and strongest regulatory authority of any health care regulator in the country. Since then, it appears to have earned more enemies than friends. Residents say health care is too costly; hospitals argue the process is too administratively burdensome; lawmakers say the regulators should be doing more to advance the state’s all-payer health care system.
“Everyone’s mad at the Green Mountain Care Board,” said Steve Kappel, a former health care consultant and legislative analyst.
There are plenty of reasons to be frustrated, Kappel said. Vermont ranked fifth in the country in its per capita health care costs, which were $8,853 per person in 2018, according to the Bureau of Economic Analysis. The state’s all-payer model, which the board is responsible for implementing, has shown mixed results at best. As in the rest of the country, rural hospitals continue to struggle financially.
Ultimately, Kappel said, the board was designed with irreconcilable mandates: to create a health care system that's affordable, high-quality and simultaneously maintains access to care.
“It hasn’t been doing its job, and in some ways, its job is impossible,” said former Gov. Howard Dean, who also previously worked as a medical doctor. Experts and state officials agreed that the contradictions in its mission leave success immeasurable.
“The Green Mountain Care Board has been trying to do the right thing,” said Shap Smith, who served as speaker of the Vermont House when the board was created. As to whether it can ever be effective? Smith demurred. “The jury’s still out,” he said.
The five-member Green Mountain Care Board, one of the most powerful in Vermont, is often overlooked due to the sheer monotony of its work and the convoluted bureaucracy in which it operates. Before the Covid-19 pandemic, its members met in a dim basement five stories below the governor’s office in downtown Montpelier with uncomfortable, auditorium-style seating.
The meetings are so peppered with health care acronyms — QHP, ACO, VITL, HIE — as to be almost unintelligible to the uninitiated.
But the board, whose members are appointed by the governor to six-year terms, has become one of the most influential in the state, overseeing the operations of a sector that amounts to a fifth of the state’s economy. Its members — who currently include a former BlackRock accountant, an ex-legislator, a Middlebury economics professor and longtime Vermont bureaucrats — have the power to regulate health insurance rates, approve and adjust hospital budgets, oversee the state’s health care claims database, and regulate certificates of need, which are required to develop a new surgical center or even purchase new MRI machines. They also oversee and regulate the rollout of the state’s experimental program to change the way we pay for health care: the all-payer model.
Experts say it’s the broadest and most comprehensive approach to regulation in the country.
Rather than trying to regulate certain parts of the industry, Vermont is “trying to shift the whole culture and infrastructure of the health care delivery system and bringing all the parties together to make that happen,” said Jessica Mantel, a law professor at the University of Houston and co-director of the Health Law and Policy Institute. “It’s a much more hands-on, top-down approach … than you typically see.”
“Nobody else has tried to have a broad view coupled with broad powers,” said Anya Rader Wallack, the board’s founding chair, who was recently hired by the University of Vermont Health Network.
That comprehensive scope was by design, Rader Wallack said.
The Green Mountain Care Board was created in May 2011 as the linchpin of Act 48, the law drafted by then-Gov. Peter Shumlin and the Democrat-dominated Legislature to move the state toward a proposed single-payer health system. The idea? To have an independent, appointed board set health care prices under a government-funded health care system. The board was given a lengthy list of obligations: improving the health of Vermonters and the quality of health care, reducing the growth in health care costs, recruiting more doctors, and reducing administrative burden.
The board was also charged with helping to enact and oversee the state’s health care reform efforts.
A centralized board would take the entire health care system into account while making policy, said the state’s chief health care advocate, Mike Fisher, who at the time was vice chair of the House Committee on Health Care.
“When they’re passing budgets, they see the impact on insurance rates. So they can see all sides of the equation and have that balancing pressure,” Fisher said.
Lawmakers also wanted to create an entity that would be useful even if single-payer never materialized, Fisher said.
That spring, Shumlin appointed its first members — among them Rader Wallack, who had advised both Shumlin and Dean on health policy. Since then, the board has grown, as has its mandate.
Its budget, too, has mushroomed, growing from $2.1 million in 2012 to a peak of nearly $10 million in 2018. (The 2022 budget is $7.7 million.)
The board had 18 salaried workers in 2012. Now, it has about 32. The staff includes the five board members, an executive director, data and analytics staff, a legal team, and financial analysts.
The board’s focus shifted early on.
Shumlin abandoned the single-payer effort in late 2014. By 2016, he had embraced a new alternative — all-payer. While single-payer primarily aimed to increase access, the new model was about changing the way health care was paid for and incentivizing less expensive, higher quality care.
The board signed on to regulate and implement the system, which was run by OneCare Vermont.
It was also given control of the state health information exchange, which aggregates and shares patient data. Lawmakers have tasked the board with myriad reports focusing on the nursing workforce, pricing and diabetes care.
“The Legislature placed greater and greater responsibilities on it, more than anything that had been on the health care administration,” said Rep. Anne Donahue, R-Northfield, referring to the previous state health care regulatory body. That, she said, “was intentional. There was a real awareness that without an empowered entity, it’s not going to be possible to make major changes in health care reform.”
With a diverse and sprawling mission, the board’s success is harder to measure, as is its cost-effectiveness.
Now some lawmakers wonder whether it’s grown too large, Donahue said. “Any branch of government needs to be asked, ‘Are we getting our money’s worth?’” she said.
Regulation or competition?
Whether regulation in health care is the best way to control prices is a matter of considerable debate. In certain states, such as Texas, competition between hospitals is seen as the way to address cost. With more competition, consumers will choose the lower-priced health care options, the argument goes, incentivizing hospitals to keep costs down.
Vermont has based its top-down regulatory approach on an alternative hypothesis: Hospital patients don’t actually opt for cheaper services because they’re difficult to research and because those with health insurance don’t actually save money when costs are lower. People are more likely, proponents of this thesis say, to simply go to the nearest hospital for a procedure, regardless of the cost.
“The evidence is that regulation is essential — and particularly regulating prices,” said Judy Feder, a professor of public policy at Georgetown University and a fellow at the Urban Institute.
How exactly to regulate the sector is more complicated.
Cutting costs inevitably involves trade-offs. Closing hospitals would save money, but it would also reduce access, forcing some Vermonters to drive farther to see a doctor. Kevin Mullin, who chairs the Green Mountain Care Board, pointed to its responsibility to ensure that insurance companies remain solvent as they decide whether to cut their rates.
There are political calculations, too. Hospital sustainability planning was met with vocal opposition from hospital CEOs and from community members worried about the economic consequences of downsizing.
In his letter in the fall, Brumsted threatened to cut staff at the UVM Health Network or close money-losing services if the board reduced its budget. Other hospitals also use their annual budget presentations to highlight the potential consequences if their requests are not granted.
Even if hospital cuts make economic sense, staff and community members will inevitably object, said Smith, the former House speaker. Hospitals “say we’re the largest employee in the county. You can’t do this to us,” he said. “Whether you’re a regulator or whether you’re a policy maker, it’s hard not to be swayed by that.”
Mullin pointed to factors outside the state’s control — pharmaceutical costs, medical inflation and Vermont’s aging population — as reasons why health care costs have risen despite the Care Board’s interventions.
Mullin also warned of the dangers of focusing too much on cutting costs.
“The goal can’t be just to slash and burn the system to bring down costs,” he said. “That’s not right for Vermonters either.”
Experts disagree on whether Vermont’s higher costs have led to better outcomes and the state’s high quality and health rankings. Dean, the former governor, argued that those rankings have more to do with Vermont’s racial homogeneity and higher average income, both of which correlate with improved health.
That leaves a tenuous balance for the board to walk in deciding whether to prioritize access, quality or cost, said Kappel, the health care consultant. (Kappel noted he had occasionally been hired by the GMCB.)
“We have a tug of war. Typically the regulatory agency is stuck in the middle,” he said. Neither lawmakers, state officials nor regulators want to choose decisively between them, he said. “It’s an impossible situation unless we’re willing to make a lot of really hard choices.”
How exactly to measure the success of the Green Mountain Care Board depends on who you ask.
During meetings, Mullin regularly highlights the fact that hospital budgets have increased at lower rates since the board was created. Before the Green Mountain Care Board was formed, hospital budgets increased by roughly 8% a year on average. Since then, the rate increase has slowed to about half that, according to data from the board.
The percentage the state spends on health care overall also continues to rise, but it has leveled off, Mullin said. “People have to key in on the bigger picture,” he said, adding that the state’s aging population is also contributing to rising costs.
Though costs continue to rise, they could have been higher, said board member Robin Lunge, who previously worked for the Shumlin administration and the Legislature and helped create the board.
“One of the challenges with health care costs is that you're often proving a negative,” she said. “In the absence of a regulatory process or a transparent regulatory board, what would the impact have been?”
The board has tried to measure its impact. A 2018 study commissioned by the board found that between 2013 and 2019, regulation of insurance premiums saved Vermonters approximately $108 million. Costs have continued to rise over that period, but without the board’s intervention, insurers would have increased rates even more, “increasing consumer premium cost,” the report concluded.
The board should also be finding ways to measure quality of medical care, said Mantel of the University of Houston Law Center.
Cost is a measure of success “that gets a lot of attention,” she said. “I don't think that should be the only metric.”
Other metrics can take years, or even decades, to show results, she said. The board doesn’t have much power to increase access to medical care or allow more people to get health insurance, which would likely require action from the state Legislature or the federal government. Measuring success is even harder during the pandemic, when hospitals reported millions in losses and cut back on unnecessary procedures and appointments for months last year.
The board had to ensure that hospitals remained viable while simultaneously trying to keep rates low for Vermonters, Mullin said. That inevitably brought conflict.
“It’s easy to throw stones,” he said. “It’s a lot harder to manage that big a piece of the economy.”
Even in the best of times, seeing systemic change in a monolithic system such as health care takes time, said Feder, the Georgetown professor. “A decade is not enough to determine a success or failure,” she said.
A rubber stamp?
It’s not the first time Vermont has experimented with regulation. In 1983, the state instituted a hospital budget review process to control costs. In 1992, the state instituted a three-member Health Care Authority to oversee hospital budgets.
Later, when the Legislature hoped to consolidate oversight, the Department of Banking, Insurance, Securities and Health Care Administration took over regulation. That meant the state oversaw health care development, and its decision-making was less transparent, board member Lunge said.
The state originally considered a model with stronger enforcement — a three-member, quasi-judicial board similar to the Public Utility Commission, which regulates electric, natural gas and telecommunications utilities.
Lawmakers eventually watered down the original proposal and settled on a five-member board. But even with the limited powers it was granted, some experts say the board could be doing more. They argue the board has tiptoed around controversial issues and rubber-stamped hospital requests.
The board has also almost universally greenlighted every proposed health care development project as part of the certificate of need process.
Hospitals and programs must submit an application to renovate, add new equipment or build new facilities, ranging from drug treatment to surgeries centers. Since the board was established, it has approved 50 certificates of need. It has denied only one — a 2014 proposal to launch an outpatient eating disorder treatment facility. The board said it did not have sufficient evidence that its treatment approach worked.
“They’ve used in ways that are not productive,” said Paul Reiss, a primary care doctor who’s on the board of Health First, an advocacy organization for independent doctors.
When the owners of Green Mountain Surgery Center applied for a permit in 2015, the independent ambulatory surgery center fought for two years to get approval, as the UVM Medical Center and other hospitals argued against the project, saying it would take services from the hospitals.
“The GMCB should be encouraging businesses that lower the cost of care for Vermonters,” Reiss said. Only the board has the ability to balance the lobbying efforts of the UVM Medical Center, the largest hospital in the state. “There’s no one with the wherewithal, the resources, the legal expertise — the Green Mountain Care Board has to be that entity on their own,” he said.
The board has also been the target of criticism around its role with OneCare Vermont. It’s a signatory to the state’s all-payer contract with the federal government, an unusual role for a regulator to play.
Kappel, the health care consultant, raised concerns about the inherent conflict in regulating the same entity the board is charged with overseeing and promoting.
After advocating for the creation of an accountable care organization like OneCare, “Now they’re supposed to regulate it in,” he said. “I’m very skeptical you can go from cheerleader to regulator overnight.”
“If they’re serious about making successful, they need to be more publicly engaged in making it happen,” said Richard Slusky, a former hospital CEO who previously worked for the Green Mountain Care Board. “This is an implementation issue and an enforcement issue, not an issue with the principles of the models.”
Every few months, Health Care Advocate Mike Fisher said he reminds board members that they technically have the power to regulate rates but have chosen not to do so.
“From my perspective, generally the insurance companies get pretty close to what they ask for, and so do the hospitals,” Fisher said. “People are today priced out of the care they need.”
Shortcomings notwithstanding, Vermonters take for granted the extent of the oversight and transparency that the state’s hospitals face, said Jeff Tieman, president of the Vermont Association of Hospitals and Health Systems.
The level of regulation is “really unmatched anywhere in the nation,” he said. “There’s a really close scrutiny.”
If the diagnoses of the board’s shortcomings vary, the proposed prescriptions diverge.
Former Gov. Dean said he would do away with the board entirely, citing the rate of the state’s health care inflation. In its place, he would institute a stronger board with greater oversight powers, similar to the Public Utility Commission.
The board was created for fee-for-service medicine — a model that simply won’t work under the changes implemented through the all-payer, said Josh Sharfstein, a vice dean at the Bloomberg School of Public Health at Johns Hopkins.
“The regulatory system has been built in a piecemeal way, not necessarily for this model,” he said. As is, it ultimately won’t lead to the outcomes that the state wants to achieve, he said.
Others maintain the board should simply do more or just wait for its work to bear results. With a changing of the guard — more “gravitas in leadership” and “people who have some experience implementing complex health care systems” on the board — the Green Mountain Care Board could be successful, Slusky said.
If it was, no one would know, said Reiss, the Williston doctor.
The board “is not accountable to anyone,” he said. “They operate in a vacuum, with some idea for what they’re supposed to do but no targets for whether they do it.”
The state has made progress on reducing costs and improving care, but it’s a challenging task, said Rader Wallack, the first board chair. “It’s not surprising that we probably didn't achieve as much as we might have hoped,” she said.
The problem is that there’s no clear, proven alternative that will yield better results than a strong board with broad powers.
“I still believe for a state that is basically noncompetitive, I still think that those are the right ingredients,” she said.
People will continue to complain or find areas for improvement, Rader Wallack said.
The reality is, she said, “nobody else has done any better.”
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