by Hamilton E. Davis
The Vermont health care reform project is the gnarliest, most important issue ever confronted by the state policy apparatus—the Governor and his executive branch, the legislature, the Green Mountain Care Board, the state’s doctors and hospitals, the state’s Accountable Care Organization OneCare Vermont, the state Auditor, the state Health Care Advocate, the Press, and advocates of all persuasions. The people most affected are the 625,000 or so residents of Vermont, who pay almost a fifth of their incomes for health care, and suffer from its quality shortcomings. They are in serious trouble because the health care reform process now most resembles a dumpster fire.
There is no end of nuances, complications, bureaucratic details, but it is possible to paint a picture of the process; and one of the best places to start is with the Press because that voice is heard more widely than any other. The Press in Vermont now means VTDigger because it can reach as many as 200,000 readers a day, and because no other news outlet takes health care reform seriously. So, let’s start with Digger’s latest offering:
In an article published recently, the reporter Katie Jickling wrote that Vermont is moving toward a decision whether to extend the current All Payer Model for another five years. That decision, she wrote, rides essentially on the performance of OneCare Vermont, the state’s lone Accountable Care Organization (ACO). And that performance, she says, has been subpar.
“OneCare Vermont took charge of the state’s health care reforms in 2016,” Jickling wrote, “soon after Gov. Peter Shumlin abandoned his plan for single-payer health care.” It aimed to work with hospitals and providers to change the way health care is paid for, to incentivize high-quality health care and lower cost…but
“The trajectory has been rocky,” Jickling wrote. “The organization (OneCare) has consistently fallen short of its targets for growth, with fewer doctors and patients participating than expected…in 2021, the organization lost membership. It also faced pushback from health care providers. Last fall, several independent doctors said that participating in OneCare was more trouble than it was worth, and they left the organization. Hospital officials told the Green Mountain Care Board that the dues and financial risk made participation too expensive. In November, Human Services Secretary Mike Smith launched an improvement plan to get OneCare back on track.”
Well, that didn’t sound promising. In the light of OneCare’s performance, should Vermont sign up for another five years of the same? Can OneCare somehow get its act together? The re-up decision needs to be made in December, now six months out. The deciders will be Governor Phil Scott, his Secretary of the Agency of Human Services Mike Smith, and the Green Mountain Care Board, whose chairman is Kevin Mullin; if there is another federal All Payer Model plan, those three will have to sign it. But others will have to weigh in. Federal Medicare officials require that Vermont reformers seek input from the public and the legislature. In other words, the decision to move forward on reform is hugely problematic.
No one can predict the outcome of that process. But my tiny corps of brilliant readers need to know that the entire content of the Jickling’s Digger piece is simply rubbish—wrong in fact, biased, incompetent. Too strong? Let’s go to the tape. To set the stage, my readers need to understand that Sunday’s piece wasn’t Jickling’s first rodeo. She been doing the same thing since she came on board Digger, as I wrote about in October of 2019 and January of 2020.
Jickling starts out by saying that OneCare took charge of health care reform in 2016…It didn’t. OneCare is a cog in the reform machinery, and one of the lesser ones. The real managers of reform are Gov Phil Scott and his Agency of Human Services, who speak for the state as whole, and the Green Mountain Care Board, which has been invested by the legislature with the most formidable array of regulatory power in the country. To the extent that there have been failures of reform, it is those two players who deserve a big piece of the blame. The lack of political leadership has been particularly damaging.
On the other side of the table are the doctors and hospitals on the one hand, and the payers, including the state Medicaid agency, the federal Medicare bureaucrats, and private insurance like Vermont Blue Cross and MVP and self-insured companies. Neither Jickling, nor the whole VTDigger apparatus and much of the whole reform playing field understand what OneCare is, or what it does.
Here goes:
OneCare Vermont is basically a shell or a middleman that permits a grouping of individual hospitals and doctors to join together to negotiate with a payer to deliver all essential medical services to a big group of potential patients for a fixed price. Authorization of such a structure is a major element in the federal Obamacare law. That represents the essence of Vermont reform, which is to shift payment to providers from fee-for-service to capitation—a per capita amount. Capitation shifts the incentive in the system from overuse to only-necessary services.
The clearest example is the actual 2017 contract between Vermont Medicaid and four hospitals in northwest Vermont to deliver care to 31,000 Medicaid recipients from that area for $93 million. Of that amount, roughly half has to be withheld to pay for care to the region’s Medicaid population that is delivered outside the region; that has to be paid fee-for-service. The other half, however, gets paid to the hospitals in Burlington, St. Albans, Berlin and Middlebury in advance monthly payments. And for the hospitals caring for local patients, there is no more money. Hence the elimination of an incentive for delivering unnecessary care.
OneCare’s role in that process was simple. It took the hospital budgets submitted by the four hospitals for the work envisioned, shaped them into a single price for the state’s Medicaid Agency and submitted that for approval to Medicaid officials. Once that was granted, Vermont Medicaid sent a check for the agreed upon amount each month to OneCare and OneCare divvied up the money among the four hospitals. Chop, chop. OneCare’s performance of their key role has been just fine.
Okay, what about Digger’s list of failures as listed above—the primary care docs are mad, the hospitals think the fees are too high, Kevin Mullin thinks its all too slow, etc.?
There is no question that the problems cited by Digger exist. They do. But the problems aren’t the responsibility of OneCare. The blame belongs elsewhere. Let’s look at the evidence:
The most important barrier to a sustainable system—defined by high quality care at a year over year affordable cost—is established and maintained first by federal Medicare officials, and locally by Vermont Blue Cross and other private insurers.
Neither federal Medicare nor Vermont Blue Cross will permit real capitation, or the fixed price contracts that will actually drive changes in medical spending. Both Blue Cross and Medicare will make prospective payments to hospitals, but they require those hospitals to maintain a shadow fee-for-service record, and at the end of the year they reconcile the payments to the shadow system. So, if a hospital spends more than the agreed-upon amount, their payers send them a check for the difference. That drains all the cost containment out of the system.Is that the only problem? No. The only player with direct power to drive reform is the Green Mountain Care Board. In that regard it has been singularly ineffective. if Vermont hospitals think the OneCare dues are excessive, then the Board can tell them to put the money into their budgets and the Board would approve it. The first Green Mountain Care Board did exactly that. In 2013, the Board determined that Vermonters could afford to increase medical costs by 3.0 percent per year. But they set the target at 3.5 percent, if the half percent was committed to health care reform. (The Board membership turned over in 2017 with the election of Phil Scott)
Is Vermont Blue Cross with its control of health care financing a full third of the state’s population dragging its feet and hamstringing reform? Absolutely. One Care Vermont has no power at all to change that fact. The Green Mountain Care Board on the other hand has enormous leverage over the Blues because it dictates the rates the Blues can charge some of its customers. That leverage remains in the Board’s toolbox.
The Board has taken one tentative step toward real reform. In 2019, it resolved to require hospitals to draw up “sustainability” plans, the essence of which was to force hospitals to defend the costs of their services, as well as showing that on complex surgeries they were doing enough cases to keep their surgical teams sharp. I have written here that for most of the small hospitals, there is no way to meet those goals.
The “sustainability” project was proposed in 2019, and has gone exactly nowhere. The Board has two consulting firms in the field for the last six months; there will be a preliminary report on their findings before the end of the month. But no one has even spoken about the implications of those studies, which are that most smaller hospitals make no sense financially or medically; but they make huge sense politically and socially. Downsizing smaller hospitals to clinics that make financial and medical sense will be huge shock that no one in Vermont is really prepared for. In the 10-year history of reform, I have never heard public word spoken about that challenge.One of the truly surreal characteristics of the reform environment is that so many people misunderstand what OneCare Vermont actually is. In physical terms, OneCare consists of a group of a little over 60 bureaucrats who work in a third-floor suite of offices on Water Tower Hill in Colchester. In essence, however, OneCare Vermont is just a name for the individual hospitals as a group.
Over the last six years, all the other players on the field have treated and talked about OneCare like it was just a free floating alien that was “managing reform”, that it was costing too much, or was losing money, or that its quality was problematic, it wasn’t being transparent, it was “for profit” unlike the rest of medicine. The reality is that the bureaucrats have no control over any of that. In its bureaucratic role, OneCare delivers no health care at all; it can’t put on a bandage or prescribe an aspirin.
Every episode of care in the Vermont system and every dollar of cost is the responsibility of the doctors and hospitals in Vermont. OneCare can collect quality and cost data across the system, but they have no ability to determine the data itself.
Once you grasp that, then all the commentary by Digger and Mullin and the legislature and all sorts of people that OneCare has to do better at appealing to hospitals, and selling their ideas to doctors and on and on and on becomes just absurd. One Care Vermont is nothing less and nothing more than the hospitals themselves.A competent press corps could eliminate the problem outlined above, but no such corps exists now in Vermont, at least when it comes to a complex issue like health care reform. There is a deeper level to the OneCare phenomenon, however, that is very complex and that constitutes a threat not only to reform, but to the day-to-day operation of the delivery system.
The original theory behind modern reform structure was that the project should be “provider-led.” Since doctors and hospitals would be gathered into federally authorized Accountable Care Organizations, they could begin to function more as a block than as individual, competing entities. That shift would enable not just fixed price contracts necessary to control costs, but the kind of vertical integration that would enhance the quality of care. In modern medicine, patients move mostly up and down in the system: They go from the primary care doc to the smaller hospital, and then to the most highly sophisticated tertiary centers; and then back down again as their problems get brought under control. To be of high quality and efficient in this view, the system needed to be integrated.
When he was chair of the Green Mountain Care Board, Al Gobeille regularly described it as a “Coalition of the Willing” and he and the Board shaped their management strategies to comport with it. Sadly, what we have learned in the last five years in Vermont is that we have no such coalition. To the extent that there is a coalition it is one of the unwilling. For the interests of the small hospitals—which include at least eight and as many as 10 of the 14—diverge radically from those of the four bigger ones.
From one end of the country to the other, small hospitals are afflicted by a failing business model. Modern medicine is too complex and too expensive for small hospitals, so they are going out of business or affiliating with big systems. What Vermont’s small hospitals are trying to do is to do as many complex surgeries as they can so as to wring out enough revenue to keep their doors open. It’s a wickedly unstable system, and anyone who thinks the answer is to just vilify OneCare Vermont is talking nonsense. Of which there is no shortage.
Where Does that Leave Us?
To sum up: OneCare Vermont is fully capable of doing what it has to do. It has managed the fixed price contracts between Vermont Medicaid and the state’s doctors and hospitals with no problems. If another payer—Vermont Blue Cross, MVP, Medicare—want to negotiate such a contract with providers, OneCare can function just fine as the middleman.
What OneCare cannot do is to persuade, muscle, cajole any the various payers to move to capitation, fixed price contracts, if they don’t want to. They are effectively debarred from that role by the clash of interests between the large hospitals and the small. The muscle, persuade, cajole job belongs to Governor Scott and his minions, who have been catastrophically bad at it; and the Green Mountain Care Board, which has the formal legal responsibility for recasting the system, but which has used a minute fraction of their power to get to the job done.
A second conclusion is that VTDigger remains a fourth-rate journalism provider, whose damaging effect on health care reform has been amplified by the fact that it is the only daily, state-wide news organization. The primary responsibility for that lies with Anne Galloway, the founder and still top authority at Digger. No single player has thrown more garbage on the fire than VTDigger.
Many observers hoped that Paul Heintz, who moved from his post as the top reporter at Seven Days and by a wide margin the best reporter in the state, to the job as Managing Editor at Digger would solve the quality problems there. On the showing so far, a vain hope. Digger has announced that Katie Jickling is moving on; but we’ve seen that movie before.
In the first three years of the Digger vendetta against OneCare and UVM, the writing was done by Erin Mansfield, directed by Anne Galloway. Mansfield’s writing was so obviously problematic that it began to threaten the credibility of Digger itself; officials across state government were going bonkers and the noise became damaging to the news-gathering function. So, Galloway fired Mansfield replacing her with a local journalist named Mike Faher. For a couple of years, Faher wrote straight forward coverage of the Green Mountain Care Board, but Galloway continued to demand that he find more dirt about UVM and OneCare and Faher resigned in protest, to be replaced by a far more compliant Katie Jickling.
Heintz took command of the newsroom several months ago, and although he was fully aware of how sub-par her reporting was, Heintz left her in place, a running sore at the state’s only real “newspaper.” Jickling is now leaving to accept a prestigious assignment out of state, and the reading public will have to wait and see what Digger does about a replacement. The choice: a competent reporter who is directed and edited out of a Heintz newsroom; or a Galloway hatchet person directed and edited by the founder herself.
Digger’s long vendetta against OneCare is a sad chapter for the news site, and a first-class journalistic organization would renounce it. Going forward, however, doing it right would not be trivial. We’ll have to wait and see.