GMCB Survey Blows Up The Ashe Argument

by Hamilton E. Davis

      There has been a vacuum of political leadership of health care reform in Vermont since early in 2015, when the last of former Gov. Peter Shumlin’s credibility on the issue slipped away. The only effort to fill that gap has been mounted by state Sen. Tim Ashe, the Chittenden Democrat/Progressive who chaired the Senate Finance Committee in much of the design phase of reform, and now leads the Senate as President Pro Tem as we enter the execution phase.
  Ashe’s effort, which runs directly counter to the reform design adopted by the Legislature in 2011, is based on a straightforward, fairly simple argument. It runs essentially like this:
   The health care system in Vermont is now dominated by hospital-based doctors, especially those at the University of Vermont, but its real future should lie in building the strength and influence of independent physicians. These physicians now get paid less than their academic counterparts for essentially the same services, and because of that disparity, many are retiring or leaving the state. That trend must be reversed if the Vermont system is to thrive in the future.
   The Ashe theory is invalid on virtually every dimension normally considered by the health policy community, but it is very powerful in Vermont, for several reasons: one is that it appeals to the common American view that competition is the answer to all issues of cost containment; another is that it invokes natural sympathy for the David-versus-Goliath aspect of the case; still another is the near- total absence of competent press coverage that should be a natural corrective to political fantasy.
   The single most important factor, however, is the total success of opponents of reform to paint the University of Vermont as a malignant influence on health care in the state. That argument has been pressed hard by Ashe and some of his Senate colleagues; by some of the primary care community in the state, and by VtDigger, the web news site that carries out the only press coverage of health care reform.
   A result of this dynamic is that the Ashe plan, if I can call it that, dominated the 2017 legislative session. The only reform issue considered, or even discussed, by lawmakers was the effort to reduce or eliminate any payment differential by insurance carriers to academic physicians and independents.
   Which brings us to the Green Mountain Care Board. The Legislature (the Senate, really, because the current House has no visible presence on health care reform) demanded that the Green Mountain Care Board adopt as its principle thrust the so-called pay parity issue. The Board has utterly failed to do its job on this issue, the Ashe argument ran, and they better get it solved now and provide an answer by Oct. 1.
   In response to these pressures, the Board carried out a near journal-quality research project in a three-month period—and simply blew the whole Ashe fantasy to smithereens.
    I have never seen anything quite like it. It was sort of--actual science, which few government bodies ever attempt. The architect was Board member Jessica Holmes, the Yale-trained economist whose day job is teaching at Middlebury College. Holmes designed a survey of doctors in the state and got 404 responses. The key takeaway was that the pay disparity issue at the center of the Ashe theory was, at best, a minor issue.
   The Board’s staff presented the survey findings Board members at their meeting on Aug. 28. The following were the “Takeaways” from the survey listed in the report:

1.      Independent clinicians like the autonomy and flexibility that running their own practice provides while employed clinicians like not having to deal with the burden and high costs of running their own practice.

2.      Both independent and employed clinicians are frustrated by the administrative burdens.

3.      Independent clinicians identify the uncertainty of their income as a frustration whereas employed clinicians identify the level of their income as a frustration. (emphasis is in the report)

4.      Whether independent or employed, the greatest threats to practicing in Vermont are seen to be regulatory/administrative burden, health care reform payment models and Medicaid reimbursement.

5.      Even with these frustrations, most clinicians plan to continue practicing in the coming years as they are today.

   Pay particular attention to four and five. The problems facing independent docs are paper work, potential changes in their industry structure, and the uncertainty—not the level—of their payments. And so far from leaving the state, most of them aren’t going anywhere. To the extent that some independents decide to affiliate with hospitals, it’s basically to deal with those problems, rather than resentment about pay disparity with the UVM network.

   The data looked like this for independent physicians:

Frustrating factors:
Administrative burden                    68 percent
Uncertainty of my income              49 percent
Burden of running own biz.           46 percent
Technology problems                     30 percent
Level of my income                        22 percent
Responsibility for practice costs    21 percent
Long hours                                      21 percent
Limited time with colleagues         9 percent

A slightly different cut at it:
Greatest Threats to Independent clinicians:
Admin burden                          44 percent
Health reform models              34 percent
Medicaid reimbursement         33 percent
Commercial reimbursement    31 percent

   That last figure is the only one that gets at what could be the Ashe theme. But Holmes said in the interview that the burden of the survey is that recasting the commercial fee-for-service rates would have no chance to affect the outlook for independent physicians in the state.
   Fascinating. Ashe and his allies in the Senate are wearing no togas, at all.
   That wasn’t the end of it, however. The Board members, having heard a staff presentation of the survey findings, discussed it at length. And in the process disclosed the political tensions that lie at the heart of health care reform.
   Jessica Holmes led off the discussion by suggesting that since the survey had shown that the pay discrepancy was not a major factor for independent physicians, and further that trying to regulate commercial payment rates was highly complex and could easily have unintended consequences; and still further, that since the state is already moving toward a system in which reimbursement by rates is already giving way to block payments, that it might be wise not to “monkey around with it…this is a house of cards.”
   Con Hogan said that he agreed. “I would not want to do anything that would get in the way of the ACO,” he said. He was referring to OneCare Vermont, the Accountable Care Organization that is the vehicle for moving from fee-for-service to capitation. Robin Lunge also seemed sympathetic to the Holmes suggestion. But then the Chair, Kevin Mullin, stepped in.
   Deferring action until more of the system is under capitation “is just not going to cut it,” he said. He asked the staff to reread the “statutory charge” from the last Legislative session, which directed the Board to take action now to reduce or eliminate the pay differential. That pretty much derailed the Holmes suggestion, at least for now.
   If the survey was an extraordinary development in a complex situation, so was the reaction to it. The whole Ashe campaign is wrong-headed, but he still controls the Senate. So, the survey threw into sharp relief a critical question: what happens if the Legislature essentially tells the Green Mountain Care Board to abandon the shift to capitation and turn back to fee-for-service? It was illuminating in this regard that when Mullin asked to have the statutory charge read, neither he nor anyone else on the Board thought to note that the recent legislative directive is not the only one.
   The far more important charge by the Legislature is the one issued in Act 48, the original health care reform legislation. That charge was to get the system to sustainable costs by moving to capitation, and overseeing the necessary restructuring to meet that goal…directing commercial carriers to pay providers in a certain way does nothing to further the real reform project.
   The Board discussion of the survey does not conclude its management of this issue. The staff and the Board members will continue to mine the survey further and could add to or modify their conclusions before they submit their report to the Legislature on Oct. 1.
   Still, the survey moved the needle on the reform project. For the first time in two years there is hard evidence to show that anti-reform, pro fee-for-service argument is fatally flawed. How much effect that evidence will have on the reform project, however, is still impossible to tell.