by Hamilton E. Davis
The Vermont Legislature is now marking the 13th anniversary of its history-making healthcare reform project. In its early years, former Governor Pete Shumlin’s Single Payer project riveted the health policy community in Vermont and nationally; but since the late teens the project has faded into irrelevance, the victim of a lack of political leadership, regulatory incompetence, and opposition from vested interests in the medical community, among other forces.
Tracking the delamination of the project is difficult even for specialists, but every once in a while, something pops up that illuminates the intellectual bankruptcy that permeates the reform environment. Case in point: on February 1 of this year, the Addison County Independent, a weekly newspaper in Middlebury, published an interview of the Green Mountain Care Board’s Jessica Holmes by its reporter, John Flowers.
The Independent has a natural interest in Holmes’s views. She lives in Cornwall, just southwest of Middlebury, and she is a tenured full Professor of Economics at Middlebury College. Moreover, she is the longest serving member of the Green Mountain Care Board, and to many of those who watch the Board’s proceedings, she is that body’s intellectual leader. Hence, John Flower’s question:
“The Independent has been covering a lot of school budget deliberations of late,” Flowers said. “Here in the Addison Central School District, they’ve budgeted for a 16 percent increase in employee health insurance premiums. It seems like there are double-digit increases each year.
“What’s your reaction to this” Flowers continued, “and is there anything the GMCB or other state officials can do about it?”
In her answer, Holmes briefly reviewed the national situation where many rural hospitals have gone out of business, or been forced to join larger systems. Most of them, she said, have trouble bringing in enough revenue to stay financially viable. Then this:
Many rely on commercial price increases to achieve positive margins, with larger hospitals and health systems commanding the highest price given their leverage with insurers.
Well. What to make of that? Holmes is right about big hospitals and health systems in the other 49 states, but Flowers wasn’t asking about them—he was asking about the Addison Central School District.
In Vermont. Where the big hospitals and health systems have no leverage whatsoever with insurance companies. The reason: The Green Mountain Care Board has total control over how much hospitals and health systems can charge insurance companies, which Holmes knows perfectly well since she has been casting her vote on those questions for years.
For example, in the Green Mountain Care Board’s deliberations on the current year’s hospital budgets, the Board authorized the University of Vermont’s Medical Center Hospital in Burlington to increase its revenue intake by about 10 percent. However, when the Board shifted to the amount it would allow to increase its charges to Blue Cross and other commercial payers, the Board limited the increase to about 3.5 percent. The effect was to cut UVMMC’s FY2024 revenue by some tens of millions of dollars.
If those numbers sound a little mushy, it’s because they are—the result of the continuing failure of the UVM Network’s public communications apparatus to tell the Network’s story.
That is a story I’ve told before and will do so again, but the point for today is that the Green Mountain Care Board is responsible not only for overseeing reform but also for the day-to-day performance of the delivery system itself. And the Vermont system is far from healthy. The small and medium-sized hospitals are spending far more than is necessary, and their quality is dodgy at best. That is not simply my opinion. It flows from national analysts’ reports in the Board archives.
Anyway, to get back to Holmes, when I brought up the Addison Independent story at a recent Green Mountain Care Board hearing, in what I assume was a rebuttal, she simply read from the Indy story. The only thing my comments at the hearing left out was a line in the story saying that there had not been any formal studies of the budget process under consideration.
The kindest thing I can think of to say about that is it’s disingenuous. Of course, it’s true there is no such study because there is no need for one. People carry out studies to gather information they don’t have and need to know. In the case of the GMCB’s use of its statutory powers to limit hospitals’ charges to insurance companies, all the players—especially insurance companies and hospitals—know all about the “commercial ask” because they face it in every annual budget session, and they live with the consequences every day…
What Holmes was doing in the article is what she has been doing for the last six years: Sounding very measured and wise, while bailing out every time the tough decisions come up or fail to come up.
In 2019, it was Holmes who initiated and persuaded the Board to adopt a “Sustainability” project that would challenge each service line at a Vermont hospital to show that it could meet the most basic tests of cost efficiency and medical quality. A half dozen nationally credentialed analysts studied those questions and reported their findings in the fall of 2021. Those findings were stunning.
By far, the highest quality and most cost-efficient medicine in Vermont is being delivered by the UVM Health Network hospitals—the Medical Center Hospital in Burlington, the medium-sized Central Vermont Medical Center in Berlin, and Porter Medical Center, the small hospital in Middlebury. The per capita costs in the other 11 hospitals in Vermont were a third to a half higher. Moreover, the quality of care in the UVM Network was far better than anything else in Vermont…
Well, you get the idea. The point is that these critical data have been assiduously, not to say religiously, ignored by all the major players, the Green Mountain Care Board the Scott administration, the Legislature, the Press, the Health Care Advocate, and the Vermont Auditor.
And with a dollop of irony—by Jessica Holmes herself.
So, a sad 13th birthday for Vermont’s reform project, the most promising such effort in the U.S. And the most advanced, now dead in the water.