This commentary is by Patrick Flood, former commissioner of the Department of Mental Health and 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 Woodbury.
Recently there has been a lot of press coverage of a Centers for Medicare & Medicaid Services report from the University of Chicago-NORC on Vermont’s all-payer model of health reform. State leaders called the results in the report “promising.”
The key finding in the report is that Vermont “saved” millions of dollars in Medicare spending. However, a careful reading of the report calls this conclusion into question. There are a few key questions about the report’s findings and a number of other concerns.
First, the finding that Vermont saved millions is suspect. There are two reasons for this. First, the study authors came to this conclusion not by looking at Vermont Medicare spending year to year, but by comparing our spending to other states. These other states bear little resemblance to Vermont and include Missouri and Arkansas as well as Tennessee, Wyoming, South Carolina and North Carolina, which have not even expanded Medicaid under the Affordable Care Act. The idea is that these other states’ Medicare spending went up in 2018 and 2019 but Vermont’s did not, therefore Vermont “saved” the difference.
Besides the fact that comparing Vermont to these very different states is questionable to begin with, the reality is that, as stated in the report, Vermont’s Medicare spending has been relatively flat since 2014, years before the all-payer model was put in place. The report even states (page 56): “Observed reductions in Medicare spending — for both the Medicare ACO and statewide Medicare populations — reflect rising spending in the comparison groups and relatively flat spending in the VTAPM groups during that began prior to the end of the baseline period and continued through the first two PYs.” Anyone can see this clearly in the chart on page 65 of the report.
In addition, the report states, “Because of this, findings may also reflect delayed impacts from other health-reform initiatives in Vermont.”
It is highly debatable, given the failures of the all-payer model and OneCare Vermont, whether any of those initiatives should be given credit for lower Medicare spending when Vermont Medicare spending has been flat for years with no significant change since the start of the all-payer model.
The report also states: “After taking into account the shared savings and pass-through payouts from Medicare, the VTAPM Medicare ACO initiative achieved a cumulative net spending reduction of $522.29 PBPY (-4.7%) that did not reach statistical significance.” (Emphasis added.)
What this basically means is that, after including some of the costs of the model, the alleged savings were even less, to the point of being insignificant, not the tens of millions of dollars that has been reported.
Nor does the report take into account the administrative cost of the accountable care organization, OneCare. This is truly perplexing, since any valid calculation of “savings” must include costs. This casts further doubt on the purported “savings.”
The second major point is that this report focuses only on Medicare. This is perplexing because the model is touted as “all-payer.” Why is Medicare being carved out for study when it comprises only a third of the total number of participants? Is it because some parties thought they could demonstrate positive results for Medicare, while Medicaid and commercial insurance show significant losses, not savings?
The real losses in Medicaid (well-documented by the state auditor and Department of Vermont Health Access) and commercial insurance more than cancel out any “savings” in Medicare. Is it possible that there is an effort to put the best possible spin on this model? Any reasonable analysis of the all-payer model clearly demonstrates it is not saving money, but costing Vermonters tens of millions of dollars.
The report states there were other desirable outcomes in 2018 and 2019. One is the reported decrease in hospital stays. But the report does not say what interventions resulted in this reduction. In fact, the report states, “This decrease may reflect VTAPM’s focus on care coordination, along with a shortage of specialists in Vermont.” A shortage of specialists, well reported recently by Seven Days, is not a desirable outcome. Others have suggested the decrease may simply be an example of restricting care. The reality is we do not know why there was a decrease in hospital stays, and it well may not be a positive outcome for which the model should be taking credit.
The report states: “The model was associated with significant declines in beneficiaries receiving annual wellness visits in both performance years (-43%, -34% respectively).” How can this be a good thing? A fundamental underpinning of the all-payer model is promoting and expanding access to preventive care.
The report also documents a reduction in home health services. The report suggests this may be the result of the decrease in hospital stays. How is this a good thing? If anything, we should be expanding home health to amplify prevention efforts and keep people out of the hospital.
The report lists a number of other issues with the model. For example:
- “The complexity of the model, perceived lack of transparency, and distrust have contributed to challenges with engaging practitioners and the public.”
- “Early in the model, there were “turf disputes” between OneCare and the Blueprint, centering on concerns that OneCare was building redundant care coordination capacity.”
- “Despite efforts by OneCare to engage stakeholders, including additional financial incentives, evidence suggests that care coordinators, CHTs, and community organization staff used Care Navigator inconsistently or not at all.” (Care Navigator is the IT care coordination system built for the accountable care organization, which has since been abandoned as an expensive failure.)
- “Providers also noted significant administrative/documentation burden because the (Care Navigator) software is not interoperable with their electronic health records (EHRs), requiring double documentation.”
Recently the leadership of the UVM Health Network publicly stated that the accountable care organization will become part of the UVM Health Network and no longer independent. In addition, UVM Health Network has begun a Medicare Advantage plan partnership with MVP, which is odd since anyone in a Medicare Advantage plan cannot also be counted in the accountable care organization, which will make it harder for the ACO to meet its participation goals.
Even more intriguing, the state has announced plans to convert the Department of Vermont Health Access, our Medicaid agency, into a risk-bearing managed care organization. If that department is taking risk and reinvesting savings, then why do we need an accountable care organization? What is really going on? Is a new plan being developed? If so, how will it affect Vermonters? Don’t Vermonters deserve to know what is being planned?
On top of all that, UVM has requested, and the Green Mountain Care Board has approved, a 6% increase in its hospital budget for next year. This occurred after the hospital recorded a $127 million profit last year. What has happened to the Green Mountain Care Board’s mandate of capping overall expenses at 3.5%? Other hospitals are receiving 5% and 6% increases.
Finally, the state has declared it is asking the Centers for Medicare & Medicaid Services for only a one-year extension of the all-payer model. If the model has been so successful, why not request a full five-year extension?
Clearly the state is making plans to either abandon or seriously alter the all-payer model and the accountable care organization’s role. Shouldn’t Vermonters be told what this plan entails?
This is not real health reform. The shame of it is that we know what real health reform entails and we could achieve it more quickly and efficiently than current efforts. Instead, we are wasting time and money to, in effect, preserve the status quo. Vermonters deserve better.
