by Hamilton E. Davis
The Green Mountain Care Board will vote this morning on OneCare Vermont’s 2019 budget. The vote will almost certainly be approved with some kind of conditions to account for the fact that not all the necessary figures are available yet. The importance of the Board decision lies in the fact that the 2019 OneCare budget is an important milestone for the Vermont health care reform project, which was launched in 2011 and is now on the cusp of full maturity.
Perhaps that is the reason that a single step in a bureaucratic process has flushed out an illuminating sample of the opposition to reform that has marked the project’s environment over the last four to five years. The most important example is the recommendation by the state’s Health Care Advocate that the Board reject the budget because of what the Advocate says is a series of errors, failures and other sins by OneCare. I wrote about that last week here.
The occasion of the vote has also drawn a range of criticism from other players, however, and it is important to know where the opposition is coming from, and what it is based on. For some of the commentary is factually based, and therefore deserves to be considered on the merits. Other aspects of the critiques are entirely bogus: they are either plainly wrong, or they are shaped so as to be obviously misleading.
I call those instances “Dog Whistles”—material aimed at simply discrediting the whole idea and process of reform, and aimed at people who have, at best, limited understanding of the issues involved, and might therefore be recruited to a movement to destroy reform.
A couple of examples. The first is from last week’s post. There, Mike Fisher and his colleagues in the Advocate’s office, urge the Board not to “privilege profits” in the hospital system over cost containment. The problem with that is that there are no profits in the hospital system, all of which are non-profit entities. Big dog whistle.
A second example: Many opponents like to mention with obvious alarm that the OneCare budget is $900 million, obviously a princely sum to bestow on a couple of dozen people working in a suite of offices in Colchester.
What none of the opponents bother to mention is that more than 98 percent of that money is simply distributed to doctors and hospitals for the medical care they deliver to Vermonters. Those Vermonters have been buying that level of care year in and year out. The difference between the $900 million now and the cost of the same services we’ve been buying for years is that the 900 would be tens of millions of dollars higher in the absence of the reform project. Dog Whistle.
From the Green Mountain Care Board Website
Dr. Deb Richter: Doctor Richter is a primary care physician who has been a leader in the reform movement in Vermont for many years. Following is her communication to the Board:
I am a practicing family physician and addiction medicine physician. I am deeply troubled by the amount of public money Vermont has spent on the floundering ACO experiment while Vermonters struggle with the costs of paying for basic medical care. How can we allow Vermonters to suffer worsening health and in some cases death from preventable causes due to delayed or avoided care because patients were unable to afford their care due to high out of pocket costs? This experiment is putting the cart before the horse and should be terminated until we ensure that all Vermonters are covered with comprehensive coverage.
HED: Doctor Richter has long favored reform, but she doesn’t like the way we’re doing it. Hence the reference to the “floundering” ACO, and the implication that the reform project is contributing to the fact that health care is still unaffordable. The fact is that the ACO is not floundering. The number of Vermonters participating in contracts with OneCare has grown from 30,000 in 2017 to 112,000 in 2018 to 172,000 in 2019. And as I said in last week’s post, the reform project has already saved Vermont some $600 million. The whole statement is a dog whistle.
Julie Wasserman: Ms. Wasserman is a health policy consultant. She formerly worked for the Vermont Agency of Human Services as a policy analyst. She has submitted a lengthy statement to the Board that is broadly critical of OneCare. Two of the subject areas in the Wasserman commentary are scale, the percentage of Vermonters who are attributed to OneCare, and the performance in managing the quality of care. In each of these areas, the OneCare systems are not fully built out and probably won’t be for some time in the future. I’ll write about both of these in more depth later. If any of my brilliant readers want to dig into them further, the Wasserman statement is available on the Green Mountain Care Board website.
There is one remarkable Dog Whistle, however. It comes on the scale issue. To see it, you need to know how the attribution system works. When OneCare and a payer like Medicaid or Blue Cross contracts with OneCare, the start date is Jan. 1 and the number of lives involved are fixed on that day. In other words, you can’t add new members to the contract because the total price has been fixed. What you can do, is take names off the list. A patient may move or leave the cohort for any reason. The going-in number, therefore, can go down—and in virtually all cases will do so—but it can’t go up.
In her statement, Wasserman looks at the in-year drop in the various OneCare contracts. Here is her table showing that.
The total number of All Payer Model attributed lives as of September 2018 is 101,079. From January 2018 to September 2018, there was a decrease of -10% in the number of attributed lives due to the inevitable attrition that occurs over the course of an ACO year…Can Vermont justify OneCare’s 2019 budget, and the substantial publicly-funded costs and resources devoted to supporting the OneCare ACO Model given the small and decreasing number of Vermonters currently participating in the All Payer initiative? Participants make up only 16% percent of Vermont’s total population. Vermont taxpayers are paying for this publicly- supported project but only a minority of Vermonters is being served.
The Dog Whistle is clear right there. Is OneCare hitting its scale targets entering its third year? No, but it is far from the Wasserman claim that there is “a small and decreasing number of Vermont currently participating in the All Payer initiative.” As I noted in the commentary above, the participating levels have grown from 30,000 to 112,000 to 172,000 in a three-year period. That is not fast enough, but a 600 percent increase is hardly a decline.
At this writing, the Board has not acted on the budget, but I will conclude with the detailed prepared statement delivered by Jessica Holmes at last Wednesday’s session on the OneCare budget:
Mr. Chair, with your permission I would like to respond to some of the public comment we have received and share some thoughts on the APM and the One Care budget.
First a genuine thank you to the staff for all of their hard work reviewing this budget. I know they have spent hundreds of hours ensuring that we have the necessary information to make important decisions about how we pay for and deliver health care in this state. So Thank you. I also appreciate the carefully considered recommendations the staff has made today. As I review the ACO budget again this week, I will keep those recommendations in mind.
I will also keep the following in mind, and I hope others will too.
The first is patience. Patience has become a lost virtue in our society. With one-click we can instantaneously see any movie we want. We can swipe right and find a date for tonight. We can post a picture and within an hour get the instant gratification of 200 likes. That works for some things but not everything.
We cannot radically change the health care system with one click or one swipe. Nor should we.
Innovation takes time. Fundamental system change takes time. We need to be patient. It is important to remember that we are in Year 1 of a 5-year model. Despite the unrealistic expectations of some critics of the APM, it may take years before we see significant quality and financial results. And achieving scale will take time—and it should. That does not mean that the APM idea is bad or that implementation is not going well. What it means, as any successful entrepreneur will tell you, is that innovation requires a willingness to take risks, constant iteration, testing, and pivoting and above all, patience. We need to take the long view here.
The second thing we need to do is stay focused on the vision we had when we signed the APM agreement. The key question will be whether this ACO budget helps us get closer to achieving a better health care system for all Vermonters.
About two weeks ago, I asked my “Health Economics and Policy” students to describe the features of an ideal health care system. Smart kids--they said an ideal system should ensure access to care; it should emphasize population health; it should reward high value, evidence-based care such as preventative care, early intervention, and disease management; it should discourage wasteful overutilization of low value care and the costly duplication of services; it should incentivize the development of innovations that both save lives and save costs; it should promote better care coordination; and it should recognize that a holistic approach to health care must extend beyond medical care to include the social determinants of health.
Then I asked them how the current system of FFS measures up against those ideals. They unanimously agreed that FFS fails along almost every dimension. They also agreed that the ACO APM model with its shifting of risk from payer to provider through capitation and its quality accountability has the greatest potential to move us closer to our ideal. Again-Smart kids.
The APM incentivizes care coordination and the utilization of the most cost-effective treatments. It promotes preventative care, early intervention and disease management which both save lives and lower costs. (Contrast that to FFS which does not distinguish between good care and bad care – under FFS all care is incentivized, so you get lots of utilization, even the kind that does absolutely nothing for you or even worse, harms you. And complex care mgmt….well, that is not reimbursed so why bother under FFS.)
In an APM, technological innovations that deliver high value care at low cost will be rewarded and adopted. (In FFS there is no incentive to develop cost-saving innovations because high costs are easily passed through to payers/consumers).
In an APM, providers are held accountable for quality—not volume—so what a provider does, not how much she does, really starts to matter. So population health should improve at lower cost. And as costs come down and waste is eliminated, access should increase for all Vermonters. Ideally, the APM is better positioned to achieve the triple aim than FFS, which many of us, including most health care experts, agree is failing along all dimensions.
But again, the APM requires a complete overhaul of our payment and delivery system. While we monitor the entities we regulate, we need to be patient with the ACO, and with the providers, hospitals and payers who must completely transform their business models. Operations have to be reengineered…provider practice patterns have to change…IT systems have to be developed to allow better flow of information…THAT ALL TAKES TIME!
And yes, the system needs to be regulated and fortunately, because of the GMCB’s statutory oversight, we have one of the most highly regulated health care systems in the country. But I urge us to regulate patiently as the system transforms itself.
Innovation is risky but fortune favors the bold. I find it particularly disappointing that the state’s Health Care Advocate has chosen to ignore the steps we’ve taken and the progress our state has made towards a better health care system, with unsubstantiated and misleading accusations, including a claim that the UVMHN is “exacerbating Vermonters’ affordability challenges and undercutting the success of the all-payer model.” To the contrary, the All-Payer model would not have been possible but for the leadership of the UVMHN. And in fact, the communities in the UVMHN have among the lowest per capita Total Costs of Care in the state.
Healthy skepticism is important but for naysayers, change will never be fast enough or indeed welcome. For those patient observers who remain optimistic and are willing to support the hard work that needs to be done to bring necessary reform to an unsustainable system, we are already seeing signs of change.
Hospitals that once survived by maximizing tests, treatments and lengths of stay are now working with their provider networks and community partners to find new ways to keep patients healthy and out of the hospital. We are seeing hospitals hire care managers and social workers for their EDs; they are embedding providers directly in schools, subsidizing the costs of housing and nutritious food for their most vulnerable patients; and they are investing in service lines like mental health, cardiac rehab and palliative care that would be revenue losers in a FFS world.
The model is showing early signs of success and we should be grateful to the early adopters such as UVM, Porter, CVMC, NW, Springfield, and Brattleboro and payers like DVHA who are leading the change... The health care delivery system is changing in the ways we hoped when we signed the APM agreement. And the ACO is facilitating that change. An ACO I might add that must be the most highly regulated in the country. Despite misleading comments by the Health Care Advocate and others about the ‘lack of transparency of OneCare’, no other ACO budget could possibly have undergone such careful regulatory and public scrutiny as this one.
So, as we analyze the ACO budget for the final time over the next week, the public should know that my colleagues and I have the best interests of the 625,000 Vermonters in mind. I will be working to ensure that this budget reflects a responsible use of our scarce health care dollars and also that the ACO’s programming continues to encourage the types of system change that we envisioned and committed to when we signed the APM, and I’m certain my colleagues will be doing the same.
And I would urge all stakeholders in the room, particularly those working for state agencies, to consider ways in which their organizations can help move the APM forward, for the sake of all Vermonters.