by Hamilton E. Davis
On November 16, the new Green Mountain Care Board put on the most shameful, bone-deep stupidest performance I have seen in government in the 40 years I’ve been watching it as a professional. For five hours and seven minutes, the Board harried, bullied and tormented Vicki Loner, the CEO of OneCare Vermont for her supposed failures to solve the problem of high costs in the state’s hospital system. The most amazing part of it was that the failures the Board kept harping on weren’t OneCare Vermont’s at all, they were the fault of the Board itself.
The lynch mob was led by Owen Foster, the new chairman who took office officially on Oct. 1. Before hearing a word of testimony about the OneCare budget for the coming year, Foster delivered a set-piece speech about the issues involved in which he demonstrated that he had no understanding whatsoever of health care reform.
He simply got his facts wrong: for example, he assumed that OneCare actually controls the purchase of billions of dollars of medical services whereas they are simply a middleman between payers and providers. And he was just plain abusive. He asked Loner whether she would work for a lower salary — he sounded like a prosecutor determined to show how tough he’ll be in defense of Vermonter’s money.
Foster at least has the excuse that he is new to his job. But that wasn’t true of Board members Thom Walsh and Jessica Holmes, who piled right on. Walsh has been a Board member for about a year and routinely claims to know more about health policy than the rest of the Board; and Holmes, an economics professor at Middlebury Colleges, has been a Board member since the mid-teens, who understands the issues as well or better than anyone else.
I understand this all may sound overwrought, but stay with me here. I’ll lay out the basics today, but over the next several weeks, assuming some technical problems can be solved, I’ll post the particulars, accompanied by actual clips of the Orca Media videos of the Board meeting. As I’ve pointed out earlier in this series, the economic and safety consequences of reform failures are immense; and only public awareness will move the Scott administration, the Board, the Legislature, the hospital industry, the press, the Health Care Advocate, the State Auditor, Vermont Blue Cross and Blue Shield, and others to abandon the Yahoo Playbook and get reform done.
The Basics
Scarcely anyone, including some of the most perceptive of my tiny corps of brilliant readers, and even many of the professionals that get paid to know, fully grasps what OneCare is and what it is supposed to do. Herewith another try:
We have 14 full service hospitals. The UVM Health Network units in Burlington, Middlebury and Berlin are fully integrated into a single company and operating in a sustainable way for the next decade and beyond, although they have plenty of problems. The other 11 are very small—25 beds or fewer for eight of them—or just plain small; but call them mid-size. All live in a fee-for-service world, where doctors and hospitals get paid only when they do something, which is a huge incentive to overuse; that system makes the American hospital industry at least a third more costly than it needs to be. In Vermont, that means at least $300 million of waste.
In 2010, Congress enacted the Obamacare legislation that included a device to convert fee-for-service reimbursement to pre-paid, block financing that eliminates the incentive to overuse. They called it an Accountable Care Organization (ACO). It works like this, schematically because the edges are always messy:
Take a payer, say Vermont Medicaid, which pays health care costs for low and many middle- income people. The state has roughly 30,000 Medicaid recipients in northwest Vermont, and it wants to control those costs.
The state knows who the patients are because they are enrolled in the program, and it knows the approximate fee-for-service costs because they are being paid now. So, state Medicaid takes that number, say $90,000,000 adds a reasonable inflation rate, say 2-3 percent and tells OneCare that’s what it wants to pay. So, $90 million for 30,000 people.
The total amount of money then has to be distributed to independent doctors, small hospitals like the facility in St. Albans, and the big tertiary care center in Burlington. All of those providers also know who the specific recipients are because they treat them now and how much Medicaid will pay for that care because they get rate now.
There may be some negotiation involved, but it’s minor. At the beginning of each month, state Medicaid sends a check to OneCare, and OneCare splits it up into checks to individual doctors and hospitals. Here’s the payoff, and the justification for OneCare’s existence:
Once the monthly checks have been sent to the individual provider, there’s no more money, so state Medicaid is protected from overuse in the system. For their part, the doctors and hospitals get their money up front, which makes their lives much easier.
Unforced Errors
All of this sailed right by Owen Foster, the new chair of the Green Mountain Care Board. Foster was steering his first meeting after his appointment on Oct.1, but he has known since summer that he was likely to get the job. And he obviously had plenty of time to be briefed by the Board staff. Still, his opening remarks made it clear that he was clueless about how the system works.
Since 2018 OneCare Vermont has had a full accountability budget of over five billion dollars. And with this year’s budget nearly $ 6.5 billion dollars.
Okay, he’s in less than a minute and he’s deep under water. The only money OneCare is actually responsible for spending is its own operation budget, and the Board should apply a fine-tooth comb to that. The real money, however, the items that start with a B for billions, just passes right through OneCare to the hospitals that actually spend it on medical care.
Having misstated the financial realities, Foster continued on, telling Vicki Loner he didn’t think much of last year’s OneCare budget presentation, that she should provide nothing but specifics about performance and that she get the whole thing done in an hour, or preferably 45 minutes. He then concluded:
As I’m sure you can all understand, you are entrusted with enormous sums of Vermonters’ money and there are huge responsibilities that come with that. You’re under oath, your responses should directly answer the questions. And you should strive for candor. Obfuscations or misleading responses are detrimental to this Board’s review…
Finally, after his nine-minute speech, Foster turned the floor over to OneCare. Following the budget, Foster returned to the attack. For example, he pressed OneCare hard about how they decided to use the UVM Network to manage some data for them. His point there was that the relationship between OneCare and the UVM Network was close and not arms-length, and more than that, that it might be a mistake to trust UVM Network with all that patient information. It was this series of exchanges that justifies the “bone-deep stupidity” phrase in my opening.
Of course, the relationship is not arms-length, and there is nothing wrong or questionable about that. The whole ACO structure assumes it—the ACO, in this case OneCare, is designed to include hospitals, and it is hospitals that generate all the medical data worth bothering about. As for the UVM Network being suspect, the Network treats more than a million patients a year, including 60 percent of all care to Vermont residents. The Network needs that information to treat those patients; patients can die if it isn’t there.
There’s more to the whole OneCare, ACO issue, which I’ll get to. But I also want to justify my “shameful” assertion in the top. Foster segued from the standard Yahoo playbook into personal abuse. Here is how it sounded:
The CEO compensation (Vicki Loner’s) is projected to be $491,000 in FY 23, and I understand from responses to the staff that that includes bonuses. Does it also include retirement benefits? Any sort of severance package? Or any other financial benefits…
Do you think you are adequately compensated? Do you think that if you were compensated more generously you would be more incentivized to achieve outcomes for Vermonters or would it not make a difference…would you serve as OneCare’s CEO if you received less compensation?
These are just snippets, of course. There was more in the same vein, which my readers will see when I can get the Orca Media video up. I said in my opening that the Foster hatchet job was shameful and stupid. I would now add cowardly and disgusting. And GMCB member Thom Walsh picked up the Foster banner.
The Walsh Conundrum
Since the original five--member Green Mountain Care Board was appointed in 2012, there have been by my count 16 total members over the decade of the reform project. There have been some quite good ones, a few losers, most ordinary. There have been just three medical doctors over that span—Allan Ramsay and Karen Hein in the first group, and now, as of Oct. 1, David Murman. Ramsay and Hein were two of the very best, in my view—they had decades of in-the-trenches experience taking care of sick patients. I never saw them wrong-footed, and neither ever fell for some of the goofier trends that regularly infect the reform space. As for the newly appointed Murman, he was the only member of the Board in the recent OneCare brouhaha who wasn’t pushing his way into a clown car.
One of the most enigmatic, and problematic, of this roster is Thom Walsh. Appointed about a year ago, Walsh is a physical therapist, not a medical doctor, but qualifies as a “provider” on a body that badly needs them. Moreover, he has a Ph.D., which tends to impress, and he has a bulky resume, which includes ties to the Dartmouth Health Institute and a similar unit at Boise State. In the recent GMCB hospital budget sessions, Walsh completely out maneuvered the interim chair Jessica Holmes and Robin Lunge to get control over the decision on the UVM Network budget. The Board ended up cutting the UVMMC budget entirely on Walsh’s terms.
In his year-long tenure, Walsh has been a relentless critic of the UVM Network system. His core contention has been that whatever the merits of a particular case, if the system makes health care too expensive then less well-off patients will simply avoid care and suffer serious harm therefrom. He avoids any mention if the billion or so dollars spent every year by the smaller community hospitals which are riddled with overly expensive and questionably quality care. He makes it clear regularly that he doesn’t think much of the other Green Mountain Care Board members. He instructs them about how they should evaluate the Dartmouth Health Atlas data, and tells them what is going on “in the consultant space.”
In the case of the OCV budget, Walsh spent his time pressing Loner and team to provide this, that and another piece of “data.” I am not going to burden my readers with direct quotes demonstrating this, partly because I didn’t understand the questions myself but mainly because I don’t think it really matters what OneCare does about data. The data that matters is generated by payers who provide the money and the doctors and hospitals who spend it. OneCare Vermont has no power whatsoever to move either one.
What Walsh did succeed at brilliantly was making the OneCare team look inept. Which fit right in with the tone and tenor that Foster set.
The Holmes Style
Jessica Holmes piled on too, not with hack-handed bullying like Foster and Walsh, but in her academic-seminar style, sounding technical and sympathetic, but slipping the knife in when it would be most effective. Let’s watch it happen in a transcript of the hearing:
Her first question involved a OneCare survey of the extent to which primary care doctors are engaged in the reform effort. She noted that 78 responses seemed pretty low, given that there are probably more than 500 such doctors in the state. Then:
Did this survey instrument include questions that gather specific examples of how OneCare’s investments, data analytics and payment incentives have fundamentally shifted how those providers actually deliver care? Is there evidence in that survey being collected about meaningful and measurable delivery system transformation that’s directly to OneCare specific efforts?
Those were a remarkable two sentences. The first thing they do is to sign on to and drive home the Foster and Walsh contention that OneCare bears the responsibility for transforming the health care delivery system in the state. As we’ve seen above, that isn’t the case, except as a cog in the broader machinery. So, the real answer is that there aren’t any specific system changes accomplished by OneCare, as Holmes knows far better than most. Moreover, as the prime mover of the GMCB’s Sustainability project, Holmes knows about the mass of consultant data that sits in the GMCB vaults.
Something that has weighed down on me in the past year is that we have been celebrating our relatively low total cost of care, and perhaps we should but I want to ask you about our wait times. So, our wait times are excessive in Vermont, particularly for specialty care, which is disproportionately used by seniors, so has…OneCare Vermont assessed the role that wait times and access might play in OneCare’s Medicare cost performance?
Wow, the sheer pious hypocrisy of that is breathtaking. In the first place, OneCare bears no responsibility for the “wait times and access challenges.” Holmes is talking here about wait times at UVM’s Medical Center in Burlington, which are very serious, but a direct responsibility of the hospital itself.
OneCare’s only direct role in the state’s Medicare cost performance is very limited but entirely positive: OneCare is the transmission link between Vermont’s Medicaid and all OneCare’s member hospitals that enables fixed price contracts between payer and provider. Which is all to the good. But if there are deficits at any individual hospital, OneCare Vermont has no power at all to order changes there. Under federal law, no hospital has to belong to an ACO, so any aggrieved Vermont hospital can just walk away.
Let’s conclude for now with the pious hypocrisy thing. The wait times at the UVM Medical Center are hugely damaging to Vermont patients, and to the hospital itself. One of the places to look for a cause is the Green Mountain Care Board, which has hammered the Medical Center’s budgets for six out of the last seven years. The Board did it again in the budget session that concluded in September. Jessica Holmes voted for every one of those cuts.
Where was top management?
It was dispiriting to watch Vicki Loner get hammered like that. She just didn’t have a chance. On the one hand, she gets her marching orders from her Board of Managers, which includes a bloc of UVM Network people, but also has an important admixture of members representing the small hospitals in the state, which are petrified by any “transformation” that forced them to match the quality and cost efficiency of the UVM Network. On the other, she gets huge pressure from reform elements in the state as well as the federal government to gin up stuff like scale of participation, care coordination, quality monitoring and a bunch of other bureaucratic stuff that the UVM Network already has and nobody else wants.
Finally, it’s time to admit that the UVM Network, which has a multi-million-dollar apparatus to manage the political environment it lives in just isn’t getting it done. The toxic anti-UVM narrative born in 2015 is still alive, and apparently getting worse. Anyone who doubts that ought to watch the Orca Media’s video of the GMCB meeting a week ago on the OneCare budget, which I’ll post as soon as possible.
N.B. Today’s post concludes the current series. After the holiday, we’ll look at the few remaining elements in the full of picture of Vermont health care reform as we continue into the new millennium.