This commentary is by Richard Slusky of South Burlington, who was CEO at Mount Ascutney Hospital and Health Center in Windsor from 1982 to 2010. After retirement, he was director of payment reform for the Green Mountain Care Board for six years. He now owns Slusky Consulting LLC.
On Oct. 3, Bill Schubart, a former chair of the board of Fletcher Allen health care, wrote a commentary published by VTDigger titled “The slow-motion implosion of Vermont’s health care system.”
In it, he states that “Vermonters have dramatically less access to care at the very institution charged with implementing Vermont’s all-payer model, and health care affordability continues its decline.” He also notes that “OneCare has failed to meet the required federal targets on the number of covered lives for four consecutive years (2018-2021).”
On Oct. 11, Hamilton Davis published an article in his blog A Vermont Journal, titled “UVM Network takes full ownership of OneCare. Uproar Ensues. Nothing Actually Changes.” In his article, Davis refers to “the bone-deep ignorance that lies like miasma over the Vermont health care reform project” but acknowledges that this is a “difficult subject to write about because it is so complex and because so much of the public discussion about it has been marked by misinformation, sheer ignorance, and outright lying.”
So how is one to discern whether the Vermont health care reform initiative is on the brink of failure — as some, including myself, have argued — or is it in the forefront of national reform and one of the most important and successful health care reform initiatives in the country, as reported to the Centers for Medicare & Medicaid Services by the University of Chicago’s research group.
To answer that question, Vermonters need to differentiate between the “promise” of the health care reform initiative and its “implementation.”
The “promise” of Vermont’s health care reform is to “improve the health of Vermonters through a high-quality, accessible, affordable and sustainable health care system” administered by an accountable care organization and under the regulatory authority of the Green Mountain Care Board.
This would be accomplished by enrolling a significant percentage of the Vermont population and providers into the model; transitioning payments to providers from fee-for service payments to “value-based fixed payments; and establishing specific targets to limit the growth of health care costs over time.
These are all laudable goals, which, if successfully implemented, could significantly improve the health care system in Vermont.
There are three primary components to meeting the financial goals of the all-payer model agreement:
1) Enroll 90% of Medicare beneficiaries and 70% of eligible Vermonters into the accountable care organization program.
2) Transition a substantial portion of provider payments from fee-for-service payments to value-based payments over a five-year period.
3) Reduce the annual growth of total health care costs in Vermont to 3.5%.
Unfortunately, after nearly four years, achievement of these goals has fallen far short of the targets established in the all-payer model agreement with Medicare. The number of Vermonters enrolled in the accountable care organization program is far less than the targeted number, the overall growth in health care costs has exceeded 3.5% over the past two years, and the percent of fixed (value-based) payments to hospitals projected for fiscal 2022 is less than 14%.
In addition, the Green Mountain Care Board just approved hospital increases in net patient revenue and charges of 6.4% and 6.0% respectively.
Recent articles in VTDigger and other publications indicate that Vermonters’ access to health care services is declining and health care premiums for teachers and others continue to rise at near double-digit rates.
In defending the UVM Medical Center’s recent proposal to invest $30 million in a new surgical center, Dr. John Brumsted, CEO of the UVM Health Network, explained that “revenue from the surgical center would subsidize money-losing services, including inpatient mental health and neonatal intensive care services.” He added that “in order to provide the full range of health care services to its community, a nonprofit hospital must subsidize money-losing services with those services that produce a positive operating margin. To ignore that fact is to ignore the financial realities of medicine.”
If he is anticipating continuation of fee-for-service payments well into the future, Dr. Brumsted’s assessment would be correct. But if he truly believes that a transition to value-based payments is actually going to happen, then his primary concern should be whether a $30 million investment in new service capacity is worth the investment.
In a recent defense of the all-payer model, Vicki Loner, CEO of OneCare, noted that, “Five years from now, if we continue to build trust and confidence, most health care services could be reimbursed based on the value they offer patients. It’s a change brought on by necessity — as costs under fee-for-service outpace our collective ability to afford them — but I believe value-based care better serves our communities and our providers alike.”
So, is this a statement of optimism that the all-payer model is working, or is it a warning that it will be another five years until we see the benefits of the model, assuming the accountable care organization continues to build trust and confidence among Vermonters, something it appears not to have done to date.
The ACO All-Payer Model Agreement with Medicare was negotiated and signed in 2016. It is now approaching five years into its implementation phase and the CEO of the organization is suggesting that it will be another five years until Vermonters might realize full benefits.
In the meantime, the Green Mountain Care Board has just approved price increases for the state’s largest hospital, and its affiliates, that are nearly twice the targeted growth rate of the ACO All-Payer Model Agreement and Vermont’s hospitals appear to be more invested in maintaining the status quo than confronting the changes in their business plans necessary for success in a reformed health care environment.
Are these Green Mountain Care Board decisions and hospital strategies contributing to or in contradiction with the steps necessary for the success of the All-Payer Model reform initiative.?
So, is Vermont’s health care reform initiative on the verge of success or failure? Maybe it’s time for the governor, the secretary of human services, the Green Mountain Care Board , and the leaders of OneCare, the Hospital Association, and BlueCross BlueShield Vermont to publicly address that question.
