by Hamilton E. Davis
Since 2015, a prominent theme in the healthcare environment has been the proposition that the UVM Network, and especially its flagship Medical Center Hospital in Burlington is too big, too powerful, too expensive, too dominant, pretty much too everything. The theme was born in an article in the newspaper Seven Days that marveled at how massive the building seemed, perched on its knoll overlooking the city, and remarking that it was “gobbling up” all of the smaller players in the medical field, especially primary care providers.
That banner was picked up notably by three leaders of the Progressive movement in Chittenden County—State Sens. Tim Ashe, Chris Pearson, and Michael Sirotkin, all now retired from state politics. These worthies had no particular knowledge about health care or health policy, but they focused on high salaries paid to top executives as evidence that big is bad and needs to be broken somehow.
The principal target was Dr. John Brumsted, who led the UVM Network for the first decade of the reform effort. His annual salary was $2 million, strikingly munificent in low-salary Vermont.
In fact, the anti-UVM narrative that has permeated the reform issue since the mid-teens was and is almost entirely without foundation. I have written about the evidence at length but for now consider just the salary issue. The UVM Medical Center Hospital operates in a national market. The company retains a consultant to determine the median salary for a given position, and that is what that person gets paid. As many above that level as below. Brumsted’s salary was mid-range. None of the on-the-ground evidence, however, has visibly moderated the anti-UVM narrative. There are several reform players who bear the responsibility for that, as I have pointed out before in this space.
But not all the responsibility. Part of the blame falls on the UVM Network itself. In my last post, I pointed out the deleterious early performance of Dr. Sunil Eappen, the new Network CEO, who took office in December. That isn’t much time to figure out a complex political scene on his own.
Of course, he isn’t on his own. Eappen’s senior management team has been in place for years. That team has a multi-million dollar public affairs apparatus, and it seems appropriate to ask how that corporate arm has dealt with the admittedly very challenging message environment.
Well, they have not been doing enough because the environment for the Network has been getting worse, not better. It is impossible to watch the Green Mountain Care Board’s regulation of hospital budgets without grasping that the UVM Medical Center Hospital is closer to the financial edge than it was even a year ago. That is not necessarily the fault of the senior management, but it is important to look at that:
Still the most damaging botch by senior management was the decision in the last budget cycle by Al Gobeille, the Chief Operating Officer and number two to Brumsted, to assure the public that whatever the depredation inflicted by the Green Mountain Care Board on the Medical Center budget, UVM would not cut any medical services to the public.
In fact, Brumsted had convinced Governor Phil Scott that the Network would have to cut services if it did not have enough money to pay for them. Which is exactly what the Network did when it withdrew from the project to build new mental health beds at Central Vermont Hospital. The Network had pledged to use revenues from a budget overrun to build the new beds.
The resulting Board-imposed budget cuts, however, made it impossible for the Network to afford the resulting operating costs. Moreover, the way it was handled was interpreted by some of the Press to demonstrate “gamesmanship” on the part of the Network management. The effect of the Gobeille caper was to damage, if not destroy, the Network’s credibility on the critical question of whether UVM is being starved of needed revenues.
The Gobeille issue is moot now: Al reported several days ago that he would leave the UVM facility to return to his restaurant business in Burlington. The damage remains, however, as does the question: Why was Al Gobeille, whose responsibilities involve operations-keeping the trains running on time—getting involved in political messaging, which was clearly outside his experience and skills?That question would apparently go to Anya Rader Wallack, who was hired a couple of years ago as the Senior Vice President for Strategic Communications, specifically to address the crying need for the Network to competently tell its own story to the public. I could just ask her, of course, but that is impossible, for reasons I’ll get into in a post tomorrow. But what can the public see?
In January of this year, Wallack, wrote a commentary for VTDigger asserting that OneCare has saved large amounts of money for Vermonters, as well as improving quality of care across the state
OneCare is an important piece of the health care reform puzzle, she wrote. OneCare is working. OneCare is improving the quality of care and reducing costs in Vermont…Savings for Medicare of over $50 million have been realized since 2018…OneCare’s providers have consistently scored above average on quality of care. For example, in 2021, OneCare providers scored in the 90th percentile for diabetes management.
There were two serious flaws in this effort. The first was that it was mostly tell rather than show, a high school kind of failing. There are some facts in there—so much savings for Medicare, so high a rating on diabetes—but no sources are given, so they’re just claims by the UVM Network. Moreover, and much worse, they are so misleading that their credibility is minimal.
What the actual research shows is that Vermont’s performance on cost and quality is close to 100 percent the result of the performance of the UVM Network itself, which delivers 60 percent of all the care in the state. The other 11 smaller hospitals in the state remain in a fee-for-service reimbursement model that costs a third to a half more per capita than the UVM Network. I have published that data many times; my tiny corps will recall this graph and this graph showing the huge outperformance on the part of the Network on both costs and quality. None of the cornucopia of hard evidence for Network superiority in the Green Mountain Care Board archives is cited in the Wallack effort.
Wallack points out that OneCare’s support for primary care in the state has been crucial, which is true. But when it comes to cost efficiency and quality, you won’t find it in places like Rutland, Bennington, Randolph, Springfield, Newport and the like; you need to look at Burlington, Middlebury, and Berlin.
Wallack compounds this failing when she claims that “OneCare has made significant progress toward” the reform goal of shifting reimbursement from fee-for-service to capitation, or block financing. In fact, the business model of the 11 small and medium hospitals remains steadfastly fee-for-service, and OneCare is scared to even talk about it to those members.
The reason is that membership in OneCare is purely voluntary, and if OneCare management leaned on, say, Rutland, to drop the price of a routine baby delivery, Rutland could just walk. And so could any other community hospital because they think they need every big-ticket surgery they can get in order to keep their doors open. OneCare has no answer to that and neither, at this point, does anyone else.
The above assessment needs some cautions. OneCare Vermont is separate from the UVM Network, although that is pretty much a fig leaf. The Network owns OneCare and selects its management. A second issue is that Wallack bases some of her claims on the fact that most care delivered to Medicaid patients is paid for in fixed-price, capitated contracts. The significance of that is reduced in the reform space by the fact that Medicaid is the most parsimonious payer in the field. There is no capitated payment for Medicare or private insurance patients. Conclusion: no real help there.The most recent UVM Network effort at messaging came from Allie Stickney, chair of the UVM Network Board. Stickney endeavored to explain one of the most significant structural shifts in Vermont medicine in the modern era—the creation of a single integrated company out of six hospitals in Vermont and northeastern New York. The Vermont units are the UVM Medical Center Hospital in Burlington, Central Vermont Medical Center in Berlin and Porter Medical Center in Middlebury; the New York facilities are in Plattsburgh, Malone, and Elizabethtown.
Beginning on Oct. 1 of 2022, the local boards in Berlin and Middlebury in Vermont and Plattsburg, Malone and Elizabethtown in New York ceded all their strategic and operational powers to the Network headquarters in Burlington. That step was the most important hospital structural shift in our region in the modern era. I wrote about it here.
In her Commentary on VTDigger, Stickney described the shift as a “clearer division of labor, with less overlap. The seven partner boards will focus on quality, access, diversity, equity and inclusion, determining community need, and fundraising to meet those needs through improved facilities and programs.
The Network Board will focus on finance and operations, working to further integrate network services, aiming toward improved outcomes for the communities we serve. Network and local boards will share the work of strategic planning.
I am struggling here to describe just how far out in La La Land the Stickney document is. The significance of the action taken last fall lies in the fact that, so far from “eliminating overlap” and other fantasies, the constituent Boards of the two Vermont affiliates and the three in New York voluntarily ceded all of their financial and operational authority to the Network executives in Burlington.
Hiring and firing affiliate hospital CEOs, determining their salaries, determining what medical services to offer, setting the local hospital budgets—all shifted to the UVM Network in Burlington. Raising money from local sources remains possible for the local board and they can watch over and report on quality efforts, but all the local power and authority is gone.
Which is a very good thing. The UVM Network now is a single, integrated company that delivers 60 percent of the acute medical care in Vermont. They do so at a third to a half lower cost than the other 11 hospitals in the state, and at quality levels that are twice to three times better than the smalls. Local boards have demonstrated no ability whatsoever to make competent judgments about 21st-century medicine. It is simply too complex and expensive for the local car dealer, and perhaps a retired high school principal. Moreover, it isn’t just the small hospital boards that can’t manage modern health care; the boards of the big players like the Network and UVMMC really can’t either. They all—big and small—rely on the professional judgment of the heavyweight doctors and administrators in their administrations.
The out-performance by the UVM Network didn’t emanate from its Board, it was driven by Dr. John Brumsted, who led the Network for a decade prior to his retirement last December. Brumsted was one of the most innovative healthcare leaders in the United States, which is why the UVM Network is the national pacesetter in reform. He was not, however, a national-class political leader, which is one of the reasons why the Network is in such a mess now.
The Vermont hospital system is now entering a five-month interregnum. All the hospitals are now completing their FY 2024 budgets, which must be submitted to the Green Mountain Care Board by July 1. It will take the Board staff five or six weeks to analyze those documents, and the Board will hold hearings on them in late August. The Board will announce its decisions around Sept. 15.
Anything could happen over that period. Sunny could right his own ship. The Green Mountain Care Board, whose performance has been appalling, could decide to address the needs of the Network—or not. The Legislature could become an effective player, which it is not now. The Press could get real about health care…the Biden Administration could get real about setting the Medicare system on a sustainable track.
The most potential possible shift would be the knowledgeable engagement of the Vermont voters; they could get engaged in the real issues of reform. It is the voters who will be the primary beneficiaries of getting to a sustainable system, and the victims of failing to do so. Moving voters is hard to do, especially given the lack of press coverage, but voters and legislators in Vermont are remarkably close, connecting regularly in supermarkets and schools. A legislator who gets three calls about an issue is on the alert, and if the calls go past five it’s a firestorm.
Another source of potential political pressure is the business community, which has been missing in the health reform space for years. Finally, a competent public relations apparatus should be able to mobilize public support at least in its own service area, which for the Network’s Medical Center in Burlington amounts to well over a quarter of the whole state population. So far, however, not happening.
So, impossible to say now where this all goes. We’ll know much more by fall.