OneCare, the nonprofit that distributes millions of public and private health care dollars to providers throughout Vermont, has asked state regulators to greenlight a $15 million operating budget — a slight decrease from this year — as part of an annual review process.
This is the first OneCare budget cycle for most members of the Green Mountain Care Board, the five-member body that regulates major players in Vermont’s health care sector, including hospitals. And the board’s new members seem keen to put OneCare executives in the hot seat.
During a five-hour marathon hearing last week, the board repeatedly pressed OneCare executives for quantitative results, whether that meant reducing Vermonters’ health care costs or improving their quality of care.
“Vermonters, either through taxpayer-funded health care groups, out-of-pocket expenses, copays or insurance, have borne the bulk of those staggering numbers,” said Owen Foster, the board’s new chair, at the start of the meeting. “And for that they deserve results.”
Thom Walsh, who was appointed to the board in December, asked OneCare CEO Vicki Loner to name the organization’s top three key performance indicators, or metrics of success. Loner declined to name any, saying, “They're going to our board to be reviewed.”
OneCare is an accountable care organization, or ACO. It’s been described as a policy experiment because it’s intended to shift the state’s health care spending from a fee-for-service model to one in which providers get a flat fee per patient, with incentives to keep people well for the lowest cost. It funnels money from Medicare, Medicaid and private insurers to health care providers across the state, ranging from big hospitals to independent primary care doctors.
OneCare has a $15 million operating budget to manage these various contracts between payers and providers and to conduct data analysis of the health care system. Its operating costs are funded by Vermont hospitals, which pay millions in fees each year to be part of the ACO.
Tom Borys, OneCare’s vice president of finance, cited OneCare’s increased enrollment as one of his top indicators of success. He argued that increased participation in an ACO model is inherently good because it changes the incentive structure behind participants’ health care.
But Walsh quickly cut him off, seemingly unimpressed.
“What I'm struggling to find is an outcome that would be meaningful to Vermonters, and you may be able to say something like, ‘reduced (emergency department) visits,’” Walsh said. “Those are outcome measures that matter to patients, and I can't find them.”
As part of this year’s budget process, OneCare submitted a study comparing it with a group of 20 similar ACOs nationwide. OneCare outperformed other ACOs on some cost metrics, including cost of inpatient and outpatient surgeries.
However, it found OneCare patients went to the emergency department at significantly greater rates, averaging 36% higher than patients in other ACOs. Vermonters in OneCare had 18% fewer visits to primary care providers and paid 30% more for prescription drugs.
In a June 2021 report, State Auditor Doug Hoffer recommended that the care board find a clear way to measure the ACO’s effectiveness, to determine whether OneCare saved Vermonters more money than it cost. The auditor said that assessment should be a prerequisite for any new all-payer agreement with the federal government, which is expected to be worked out in the next few years.
“On a high level … it’s important that any regulated entity, like OneCare going before the board, gets a good, careful review,” Mike Fisher, chief health care advocate at Vermont Legal Aid, said after the hearing. “And so I’m pleased to see the level of questioning from the board.”
OneCare executives pushed back on some of the board members’ demands for quantitative impact. They argued that changing the entire health care system takes a long time.
“How do you manage the one-year payer contract cycles and performance expectations with long-term outcomes that, our clinicians remind us all the time, it's going to take years, decades, generations to address?” OneCare Chief Operating Officer Sara Barry said.
When governments or organizations invest in big, upstream factors that impact people’s health — things such housing, walkable communities and food security — those benefits don’t have an immediate, measurable impact on the health of a group, Loner said. OneCare executives also noted that about half of the ACO’s lifespan has been during the Covid-19 pandemic.
Walsh agreed with executives that systems change is a long game but countered that six years should be enough time to at least have some way of measuring results.
“If OneCare’s role was to support through data analytics, maybe trainings and other things over time, wouldn’t there be improvements that we could point to, right?” Walsh said. “If we look year over year, and it's been going on for five or six years, wouldn't there be improvements that we could point to, even if it's just a little piece?”
About 296,000 Vermonters are “attributed” to OneCare — meaning they see a provider who participates in OneCare and is accountable to the ACO’s performance targets. These 296,000 patients are expected to generate $1.4 billion in health care spending in 2023, an expected $97 million increase from this year.
Overall, OneCare’s requested $15 million operating budget would reduce its expenses by about $248,000, or 1.6%, from 2022. The ACO cut costs by reducing its in-person workspace and by combining some operations, such as data analytics, with UVM Health Network, executives told the care board.
OneCare’s budget request includes a roughly 3% cost-of-living increase for employees. If the budget were approved, Loner, the CEO, would make more than $490,000 next year.
Aside from the organization’s operating expenses, OneCare would also be responsible for another $29.9 million, which it would distribute to health care providers throughout the state.
That money includes bonus payments for providers who reach certain population health goals. It would also fund targeted investment and programs in specific areas, such as about $212,000 for the state's five nonprofit Area Agencies on Aging.
In response to questioning by Foster, Loner said OneCare had conducted no cost-benefit analysis on how it should allocate money to particular programs or types of providers.
The proposed budget would raise hospital participation fees by 1%, generating a total of $19.8 million. If approved, this budget also “escalates risk quite dramatically” for Vermont hospitals, Borys, OneCare’s vice president of finance, told the care board.
By participating in OneCare, hospitals join a risk pool. If hospitals meet certain cost targets and quality goals by the end of the year, hospitals can earn funds from the pool. If hospitals miss these targets, they could owe money — potentially millions. Theoretically, this payment model is meant to change financial incentives, to encourage coordinated care and reduce expensive or unnecessary services.
With the onset of the pandemic, OneCare had substantially reduced how much risk hospitals took on through their shared pool, from $42 million in the pre-pandemic portion of 2020, down to about $16 million for the past couple years. The proposed 2023 budget would raise the stakes for hospitals back to roughly pre-pandemic levels, at $36 million.
At last week’s meeting, Foster asked OneCare executives what the hospitals’ risk actually means: If a hospital fails to meet certain targets and owes money at the end of the year, who ultimately pays that penalty?
“Would any executives or individuals who are responsible for that loss have, actually, any skin in the game?” Foster said.
Hospital leaders are not individually responsible to OneCare’s goals, Borys said, but they are accountable to their boards.
“In the sense that if they had to make a large shared loss payment, the boards are going to consider that when evaluating management,” Borys said.
“So if the hospitals, ultimately as an organization, would foot the bill, is it fair to say that by and large, Vermonters are paying that?” Foster said. “Given that's the source of the revenue streams?”
“I think through extension, there's some truth to that,” Borys said. “But I will also add that the complexity of health care funding is huge. And if the general belief is that every dollar that funds health care comes from individual people, which is probably fair, then I'd say the answer is yes.”
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