On Wednesday, the Green Mountain Care Board may do something it has not done before in its six years of reviewing accountable care organization budgets: make punitive cuts.
During a meeting last week, new board chair Owen Foster proposed cutting the 2023 budget of OneCare Vermont, a nonprofit that is part of the University of Vermont Health Network, by $216,219, the equivalent of its top five executives’ 2022 salary bonuses.
That amount is less than 1.5% of OneCare’s almost $15.2 million organizational budget, but its removal would send a message.
“I think it is inappropriate for the budget to include that amount of money given the lack of fiscal responsibility,” said Foster, citing the organization’s lack of patient health-related performance measures for itself. Without them, OneCare leadership cannot determine how to most effectively deploy resources and the board cannot do its job as a regulatory body, he said.
Accountable care organizations, which contract with private insurers and federal and state governments to provide health care for specific groups of patients, play a pivotal role in Vermont’s health care payment reform efforts. OneCare Vermont is the only accountable care organization currently playing that part.
A primary goal of reform has been to move health care spending in Vermont away from paying for specific services, such as visits, operations or tests, and toward rewarding health outcomes.
In Vermont’s current “all-payer” experiment, an accountable care organization — specifically, OneCare — is the vehicle for bundling payments and incentives from many different payers, including Medicare, Medicaid and certain kinds of private insurance. The organization passes those payments and incentives on to participating hospitals and other health care providers in the form of regular monthly up-front payments and end-of-year bonuses or penalties.
This is a much broader mandate than most of the hundreds of other accountable care organizations in operation across the country, which tend to contract with one type of payer, to work within one integrated health care system or with a limited number of different types of providers.
The argument playing out in the Green Mountain Care Board virtual meetings over the last month is how much more than setting up this system should the organization have accomplished by now, given the complexity of its task. How much more than simply running it is acceptable? And if expectations are lowered for its efforts, are they really worth what the ACO is budgeting to administer them?
“I don’t want to be in a spot next year where we are in the same situation where we are trying to decide if the budget is an appropriate amount of money without more granularity into the effectiveness of the programs,” Foster said during the board’s deliberative session on Dec. 14.
The Green Mountain Care Board regulates accountable care organizations in Vermont, along with hospitals and insurance companies. Its regulatory role is why ACOs in Vermont are not subject to standard federal antitrust rules. That oversight includes an annual certification and a budget review that looks at the organization’s administrative costs, as well as its progress toward meeting its payment reform commitments and providing some measurable public benefits.
Foster and two other new board members, Thom Walsh and David Murman, have expressed frustration over the past several weeks of meetings about how they should judge that progress.
The new members frequently referred to the board’s mission: to improve access, affordability and the quality of health care for Vermonters.
They said they expected to see reporting on annual performance measures from OneCare that address those goals. Instead, OneCare’s measures of progress were focused on the number of patients and providers who are participating in their programs.
“We are six years in, and you would think we would have clear answers about, ‘Here are the outcomes that matter most to Vermonters, and here are our priorities as a company, and here’s the impact that we’ve had, and here’s what we are doing to address systemic issues that are facing our health care system.’ And we just don’t have that,” said Walsh, who was appointed to the board after ACO budget hearings concluded last December. “We have an under-performing entity, and to approve the budget as submitted feels wasteful.”
OneCare CEO Vicki Loner responded to the criticisms during the public comment period at the end of the board’s discussion. “I think that there is a fundamental disconnect, maybe it’s a disagreement, on what an ACO is supposed to be in charge of in the all-payer model versus what the state, the policymakers and the Green Mountain Care Board is supposed to do,” she said.
Loner said that coordinating payments based on spending targets, care quality and health outcomes is OneCare’s core responsibility under its contracts. In an earlier hearing, she said that the organization is developing its own health outcome quality metrics that would be adopted by its board next year. The organization’s focus has been on growing participation, other managers said in November, and that expansion has made it difficult to compare patients’ health care outcomes accurately over time.
“Maybe the conversation needs to be (about): What is the board’s expectation of OneCare Vermont and its providers? Because those expectations were pretty clearly set at the beginning of this model, and we have worked in good faith as a partner with the state to help you implement your all-payer model,” Loner said.
Is OneCare’s work worth what it costs?
Whether the OneCare 2023 budget will be cut to any degree is unclear.
Longtime board members Robin Lunge and Jessica Holmes, and Murman, said they needed more time to consider Foster’s proposal — which included a reduction equivalent to OneCare’s planned 2023 spending on marketing and communications, as well as the 2022 executive bonuses.
But either way, fundamental questions about OneCare’s predominant role, its abilities and the likelihood of its success as currently structured have dogged the project since its outset, and are sure to continue.
The extent of payment reform’s influence is still not large enough to make a difference in the day-to-day decisions of hospitals and providers, say skeptics like Health First, a group of aligned independent Vermont private health care practices, which was one of two other provider groups that in 2016 and 2017 considered participating alongside OneCare in the model.
Fifteen of Health First’s 26 primary care practices have signed on to work with OneCare, wrote network managers Susan Ridzon and Rick Dooley in a public comment. The monthly care coordination payments they received through OneCare were essential during the pandemic, and continue to be extremely valuable. However, they wrote, “We believe that there are more efficient and cost effective ways to deliver this support…”
On some measures, OneCare’s progress has been substantial. Around 40% of Vermont residents likely will be receiving care that is at least partially linked to outcomes-based payments through the organization next year, according to estimates by Green Mountain Care Board staff. All 14 of the state’s hospitals will be participating in some way, as will 82% of eligible primary care providers.
But OneCare contracts still only account for between a fifth and a quarter of total health care spending by or on behalf of Vermonters.
The monthly payments to hospitals and primary care providers — considered a key component — are expected to equal $438 million next year, just under 7% of what is being spent on Vermonters’ health care.
Participation by self-insured companies is purely voluntary, and the growing number of patients taking part in insurance-based Medicare Advantage plans are not readily integrated, so regulators have expressed concern about how much larger in scope the “all-payer” agreements can grow.
Murman, an emergency room physician at the UVM Health Network-affiliated Central Vermont Medical Center, joined the board with Foster in October.
“I have had this impression that OneCare is the major vehicle for cost control health reform and quality improvement in the state of Vermont. That was my impression prior to these hearings,” he said during the board’s deliberations. Now, after learning more, “I don’t expect a whole big shift in cost or quality with what OneCare is capable (of doing),” Murman said.
But if OneCare is primarily just a middleman for a subset of health care payments, is it worth the cost? The care board is likely to require the organization to provide a return on investment analysis next year.
OneCare’s funding between 2017 and 2021 totaled more than $133 million, according to the organization’s audited financial statements. Of that, around $66 million was spent on administration and software to combine and analyze electronic health records and distribute results to providers.
Around $60.4 million went toward care coordination work by OneCare or toward payments to primary care providers and other community-based health programs intended to improve care. That amount does not include around $31 million of Medicare funding, which passed through OneCare for community-based organizations involved in the state’s Blueprint for Health program, that otherwise would not have been available.
Almost $52 million, or 39%, of the organization’s total funding during that period came from Vermont’s Medicaid program, with most of the remainder from hospital participation fees. Of the Medicaid funds, at least half came from the Medicaid Global Commitment Fund, which allows the Vermont Agency of Human Services a great deal of leeway in its use.
At Wednesday’s hearing, Susan Aranoff, a policy analyst for the Vermont Developmental Disabilities Council, asked care board members to consider what else Vermont might have invested in with those funds.
“That Medicaid money … could have gone to our designated agencies and our specialized services providers,” she said, adding that it could have gone to more home-based care for people with disabilities. “I want to find a simple relationship between Medicaid’s investments and how that has benefited Medicaid’s recipients.”
For their part, OneCare’s leaders said in a November hearing that their role is and will be more than bundling payments. They share data analysis and best practices training to their member providers, which they said will improve with a transition to new software available through the University of Vermont Medical Center.
They also say their facilitation of relationships among hospitals and between hospitals and primary care and other providers was a factor in the state’s coordinated response to the Covid-19 pandemic, which had great value. A dozen of OneCare’s member hospitals and provider groups wrote supportive public comments urging approval of the budget saying the same.
But at least one expert thinks that so far the evidence of impact is not strong.
“It’s been an eye-opening several months,” Walsh said last week. “I’ve struggled to find the value that OneCare is bringing to Vermonters.”
Walsh is a professor at the Dartmouth Institute for Health Policy, where the accountable care organization idea was developed prior to the 2010 passage of the Affordable Care Act, in which the structure was introduced. He also gets paid to consult with other ACOs across the country.
“I was trained and I teach at the place that came up with the conceptual model for this. I have believed that it really can work; I’ve seen places where it’s worked. It’s not working here,” Walsh said. “How much longer do we continue to put more and more resources into it? I am struggling with that because … I would like to see it work.”
