Yacovone Preaches on UVM Spending From Deep Left Field

by Hamilton E. Davis 

   Arguably the single largest barrier to the full maturation of Vermont’s health care reform project is that it is so widely misunderstood. The press, such as it is, is basically clueless. The Scott administration supports the principle, but has provided no political leadership. The legislature is pretty much a health policy desert. There is simply no way, therefore, that the public can follow the twists and turns as reform moves ahead, or just sits there.

   A few weeks ago, Eric Shell, a national class expert on hospital policy who runs a consultancy out of Portland, Maine, told the Green Mountain Care Board that the Vermont project is the most advanced such effort in the United States. Shell, who advises health policy experts in three dozen states along with the federal government, said no other state reform effort is even close to Vermont. Shell did not seem to grasp the extent to which reform is an orphan here. Shell doesn’t know David Yacovone.

   Yacovone is a state representative from Morrisville and a member of the House Appropriations Committee, an influential post. He has had long experience in health-related fields. On Aug. 12, Yacovone published a commentary on VTDigger under the heading, “Who will protect the rest of Vermont’s health care system.” The piece cast the University of Vermont Medical Center’s plans to expand some of its services as a threat to the rest of the health care system.

   The commentary was occasioned by the UVM Medical Center’s plans to build a new outpatient surgery center, at least part of which would replace the ORs that were lost at the Fanny Allen site. The UVM announcement did not include details; the specific action will be to seek state permission to plan the facility.

   The UVM statement conflated changes contemplated at both its Medical Center in Burlington and at other sites in the UVM Health Network, which includes the Central Vermont Medical Center in Berlin and Porter Medical Center in Middlebury.

   The network said that “over the next several years,” it will upgrade the Emergency Department at the Medical Center, expand its neonatal intensive care unit, and move its ophthalmology (eye care) and dermatology services to Tilley Drive in South Burlington. A critical piece of the long-range plan will be to build an inpatient psychiatric unit at the Central Vermont Medical Center in Berlin.

   Yacavone attributed these projects not to necessary patient care, but to UVM’s desire to    bolster its strength as a business. “The Green Mountain Care Board must put a moratorium on health care spending proposals intended to rebuild the hospital infrastructure, not because they may not be needed, but because we need to be sure what we do approve is most important.”

    It is difficult to adequately describe just how preposterous that whole screed is. It is the sheerest demagoguery. The idea that you can just swap out treatment for heart disease, trauma, stroke, cancer and myriad other dangerous-to-life afflictions in order to treat diabetes and obesity is absurd on its face. Only in Vermont’s Alice-in-Wonderland health reform environment would something like that would appear in print, let alone be taken seriously. Given that Yacovone will get a hearing, however, let’s look closer at the string of absurdities that constitute his case. In no particular order:

• Even if the Green Mountain Care Board decided to rein in UVM’s spending on acute care, that does not mean the care isn’t going to be delivered. Premature babies, heart attack and stroke patients, and car wreck victims are going to get care somewhere, and if it’s not available at UVM, they will go somewhere else at a minimum 10 percent cost increase, not to mention the huge inconvenience.

• One of the fundamentals of contemporary medicine in Vermont as well the rest of the United States is that you can’t make any money on primary care. Primary care is the foundation for the whole medical edifice, but primary care docs get paid at the low end of the scale. A sustainable system essentially depends, therefore, on financial support from the hospital subspecialty community. One $800,000 a year orthopedic surgeon can keep several $200,000 primaries afloat.

• An important example of this dynamic is the UVM commitment to build an inpatient psychiatric unit at the network’s Central Vermont Medical Center in Berlin. In September of 2011, floods generated by Tropical Storm Irene washed away the state mental hospital in Waterbury, and state government never got itself together to replace it. So, in 2017, when a spike in volume at the UVM Medical Center sent an extra $20 million to the hospital’s bottom line, the Green Mountain Care Board and the hospital agreed to use that overage to build the Central Vermont unit. The unit is still in the planning stage, but the UVM system remains committed to it. No UVM, no solution to the state’s mental health facility problems.

• Yacovone claims that allowing UVM Medical Center to do a full schedule of subspecialty care means that there won’t be enough money to do the chronic stuff, like diabetes and asthma care. That is simply not true. The UVM system operates primary care clinics in Burlington, Colchester, Essex and Hinesburg. Moreover, UVM researchers contribute to medical knowledge on diabetes and obesity. And, not incidentally, the UVM College of Medicine trains new doctors in family medicine, internal medicine primary care, primary care pediatrics, and some primary care gynecology. Every dime that gets chiseled somehow out of the UVM spending will damage medicine not only in Chittenden County, but all over the state.

• Even people who might concede the above points could be susceptible to the caveat that, whatever its merits, the UVM medical system is just too expensive, wicked costly in the vernacular. That claim is as bogus as the rest. The real cost of medicine consists in what the public pays in taxes for Medicare and Medicaid, and what employers and individuals pay in insurance premiums. The direct measurement of that is the per capita cost of care in the various hospital service areas.

  As it happens, the federal government collects that information for the Medicare population across the country, and the numbers get published in the Dartmouth Atlas Project, an industry guidebook. The data for 2018 provides this quick look:

        Hospital Service Area                     Cost of an individual Medicare Recipient

Chittenden County (UVMMC)                                      $6,523.66

Bennington (Southwest Medical Center)                  $9,822.16

Randolph (Gifford Medical Center)                             $9,684.66

Rutland Regional Medical Center                                $9,631.90

The above is just a snapshot (I’ll do a full post soon on the DH Atlas findings for Vermont) but it is enough to disabuse the ordinary Vermonter of the bogus proposition that the UVM Medical Center is the big spender. In fact, in the latest data, it is the lowest, a full third below the high spenders and significantly below all the rest.

None of the above will have any impact on Yacovone and it will likewise have no effect on the dead-end opposition to reform that exists in the reform space. Yacovone is particularly interesting because his style is unusual. During the legislative sessions he speaks often, with a special kind of flair. Normally, when the representatives speak, they use a hand-held microphone. Yacovone pioneered a striking departure: instead of a hand-held mic, he arranged to use a tiny mic that attaches to a shirt collar, the way television celebrities do. That way, his arms are free to sweep wide as he offers his profundities to the multitudes in the high-ceilinged House chamber, the cathedral of Vermont’s political life. You could get a sense of that in the peroration of his commentary:                                          

   “Will the some (sic) 55,000 Vermonters with diabetes be better off with proposals like the one offered by UVM?”, he asked. “The short answer is no.

   “Will obesity be combatted with more hospital construction projects? The short answer is no.

   “Will Vermont’s rate of fatalities due to overdoses…change with more beds and operating rooms? The short answer is no.”

   Then, ominous, pregnant pause:

   “Vermont is watching.”

 Okay, well, it’s a good thing Vermont is watching. But if what they’re seeing is a health care delivery system shaped under the twisted principles espoused, then they will experience a system badly debased, both medically and financially.

Hoffer, Vermont Auditor, Goes Way off the Rails on Reform

by Hamilton E. Davis 

   Last week, the Green Mountain Care Board invited Eric Shell, a nationally known expert on rural health care systems, to give the members his views on Vermont’s health care reform project. Shell runs a consultancy called Stroudwater, based in Portland Maine. He has worked with some three-dozen states as well as the federal government on issues involving small hospitals and he has looked closely at the Vermont system.

   “I’ll say this straight out,” he said at the outset, “and I’m going to say it again at the end. Vermont is the leading state in the United States around the transformation to value-based care and a true health care system. There’s nobody close to you.”

   Shell was particularly complimentary about OneCare Vermont, the state’s sole Accountable Care Organization, which he said had markedly increased the number of attributed lives starting in 2017, thereby connecting the revenue streams of the future to primary care physicians.

    “You all in Vermont have really written the book on this through OneCare Vermont.” he said. “I am humbled by what you have done, and what you are going to do in the future.”

   Those comments stand in striking contrast to those of Vermont’s state Auditor,
Doug Hoffer, who for the last year or so has mounted a broad-based attack on the state’s health care reform project, arguing that it has cost money rather than saving it for Vermonters and building the case for abandoning the project in 2022, rather than signing up with the federal government for another five years.

   Almost every significant point Hoffer makes is simply wrong, politically motivated, or just a plain cheap shot. He knows virtually nothing about health care, and there are serious questions about whether he is overstepping his portfolio as Auditor. Yet Hoffer is getting taken seriously by a credulous press corps (read VTDigger and Seven Days) to the point where he is becoming a significant player in one of the most important policy decisions Vermont will ever have to make. Some dismiss him as just noisy, but he is more than that: He is dangerous because he could undermine a Vermont reform that could deliver the highest quality, most cost-efficient delivery system in the country.

   The Hoffer indictment, contained in two major reports and several press interviews, argues as follows:

• From 2000 to 2018, the increase in health care costs in Vermont means that Vermont is worse off than it would have been without the All-Payer-Model. To reach this conclusion, Hoffer looks at Vermont spending in that period and compares it to the same trajectory across the country.

If health care spending had increased at the same rate as the U.S. average, we would have spent roughly $1 billion less in 2018. Those savings would have more than covered Vermonters’ personal state income taxes in 2018, and the savings would have equaled $1,576 per person.

Wow, that would be a lot. And in just one year…the obvious problem here is that Hoffer has taken the inflation rate over an 18-year span when the question at hand is whether the inflation rate in the reform period, 2013 to 2018, was equal to, worse than, or better than the inflation rate that prevailed pre-reform, 2000-2009. The graph below presents the real question. And the real answer is that Vermonters under the reform structure avoided a total of $1.9 billion in hospital spending compared to their rate of inflation from 2000 to 2009.

Read my blog post about these numbers here.

There are some caveats on all the numbers bandied about here. Health care spending includes more than just hospital spending, but hospital spending is the engine that drives the broader number. Moreover, there can be some confusion about the time spans involved. We have used two time spans for the relevant analysis, 2000 to 2009 and 2013 to 2019. The missing three years, 2010, 2011 and 2012 were an anomaly because those numbers had nothing to do with any regulatory regime, pre or post reform spending in FY2010 fell dramatically because the Great Recession of 2008 hammered demand. In 2011 and 2012, the spending cap was set by the Legislature at 4.5 and 4.0, well below the historic track. None of these details, however, vitiate the policy issues cited above.

• Manipulating the Numbers: 

One of the questions thrown up by the figures above is whether the 50 percent cut in the hospital inflation resulted mostly or wholly from national trends, rather than being a result of the Vermont project. Hoffer makes that argument in his report. In fact, the national data shows a dramatic switch in the Vermont versus the national per capita health spending rates, in the opposite direction from that of the Hoffer indictment. See the graph below:

In the pre-reform period 2,000 to 2009, Vermont’s per capita health care spending ran well ahead of the per capita rates for the U.S. as a whole, 85.9 percent to 63.5. In the All Payer Model period, 2013 to 2018, that posture flipped, with Vermont increasing at a rate of 18.0 percent and the U.S faster, 22.1 percent.

• A second major thrust of the Hoffer attack is his assertion that OneCare Vermont administrative costs are higher than whatever it has saved the state, a canard that made it right into the headline of the Seven Days story. OneCare is Vermont’s lone Accountable Care Organization, and its function is widely misunderstood. In the broad sense, it is one of four major players in reform, and as such deserves a share of the credit for the $1.9 billion racked up by the All-Payer model, as shown above.

OneCare’s specific job is to assemble the spending estimates from multiple hospitals into a single fixed price to a payer to cover a cohort of patients. Example: In 2017, OneCare midwifed a contract between Vermont’s Medicaid agency and four northwestern Vermont hospitals to provide all necessary care to 31,000 recipients for $93 million. The latest figure for Medicaid fixed price contracts is about $185 million across the state, and while that number should be higher, it has already stabilized Medicaid spending. The Vermont Medicaid Agency is the only such body in the U.S. to have a grip on Medicaid spending.

Finally, the value of OneCare lies not just in the benefits it has already delivered: The big payoff will come when Vermont Blue Cross and federal Medicare bureaucrats seek fixed price contracts for their patients, all of whom are much more expensive.

In the light of these realities, OneCare’s annual $19.3 million cost is mouse meat.

• Okay, but you’re unhappy about the scale issue—we’re not getting Vermonters into fixed price contracts, fast enough. Well, that’s true, but it isn’t the fault of OneCare, which can’t construct such a contract unless a payer wants to do it. And the major payers—the federal Medicare officials, and private insurers like Vermont Blue Cross—don’t want to. Moreover, even if they did, the small hospitals in Vermont don’t want to either because rationalizing the smalls network would mean they would have to step down from full service hospitals to clinics: The small hospital business model is dead in Vermont, just like it is in the rest of the country. OneCare has a bureaucracy which serves as a convenient punching bag for reform opponents; but at root, OneCare is actually just the 14 Vermont hospitals, and if the process of reform threatens them they can simply drop out of the ACO or restrict their participation to Medicaid.

One of the most troubling aspects of the Hoffer campaign is that he indulges himself in some nasty, personal comments. For example, he routinely denigrates Kevin Mullin, the chairman of the Green Mountain Care Board, contending that he isn’t doing his job. Another case in point is his suit against OneCare Vermont to force the CEO Vicki Loner to turn over to him the salaries of all her lower level bureaucrats. Publishing salaries can have some benefits, but for the most part they are just ploys to damage an opponent in the eyes of the public. In this case, however, Loner had already provided both the Green Mountain Care Board and her contract partner, the state Agency of Human Services, with the 12 top salaries of OneCare employees. Loner’s paychecks total $408,000 per year. And the people with whom OneCare actually had a contract, the Medicaid Agency, were perfectly happy with that level of disclosure. As was the Green Mountain Care Board, the government agency actually assigned to deal with the issue.

   It’s perfectly reasonable for public officials to argue about this stuff, but it seemed a long reach when Hoffer suggested Loner is acting like she is “above the law.” There’s a disturbing Trumpian air about that. Hoffer’s language is getting close to “Lock Her Up.”

   The irony is that there is a serious question whether Hoffer himself is outreaching his legal portfolio. In a column published last February, Seven Days columnist Dave Gram raised that very issue. Gram cited two particular critics, Republican Sen. Randy Brock of Franklin County who served as Auditor from 2005 to 2007; and Oliver Olsen, an Independent from Londonderry.

   “With some portion of the population, you lose your credibility, and that relates to the perception of how independent you are, and the value one assigns (to) your opinion and the work that you do,” Brock said of Hoffer. Brock added that an auditor’s work should be something another auditor could replicate to reach the same conclusions, which he said does not always appear to be the case with Hoffer’s…

   Olsen, who served three terms in the Vermont House, asserted that Hoffer “got his math wrong” and that the “data and analysis” Hoffer used in his audits was “not readily available for public review…which makes it impossible to verify the accuracy of your analysis against source data.” 

Hoffer mounted a point by point defense against these charges, which readers can review in the Gram column. However, politics and government ain’t bean bag as Mr. Dooley has informed us and you can make too much of the above kind of give and take.

The very serious issue underlying it, however, is the whole matter of health care reform, and in particular the extent to which Hoffer is trying to seize control of the very complex process involved.

   In the service of that proposition, I offer my tiny corps of brilliant readers the following two observations:

1.  In a remarkable twist, Washington County Superior Court will get to rule on Hoffer’s effort. Attorney General T.J. Donovan has filed suit in that court to force OneCare Vermont to comply with the Auditor’s demand that OneCare deliver up the salaries of its lower level employees. The decision will support or eviscerate the Hoffer effort to control the reform process. Interesting.

2.  In a thoroughly non-legal sense, I offer A Vermont Journal’s take on the whole kerfuffle. My first observation is that the major reform players in Vermont have assembled a very extensive and expensive array of health policy technicians to support the effort.

The Green Mountain Board, which has the central responsibility for reform, conferred Act 48, has at least a dozen. So does the Scott Administration and its Agency of Human Services, which deploys the Director of Health Care reform and staff; the Blueprint for Health staff, and the staff of the Commissioner of the Department of Vermont Health Access, which directs the Vermont Medicaid program and which operates the only fixed price contracts in the United States.

The Auditor’s office has, as far as I can tell, no credentialed health policy expertise at all. As far as Hoffer himself is concerned, I offer this: Beginning in 1980, I have talked to health policy experts from one side of the country to the other, in Maine, Massachusetts, Iowa, Wisconsin, California, Oregon and California…a few months ago, I talked to Hoffer on the phone at some length, and I was astonished to discover that he knows virtually nothing about health policy, in Vermont or anywhere else.

   Hoffer is quite simply a health policy ignoramus, and if players like Kevin Mullin, the chair of the Green Mountain Care Board, and Mike Smith, the Secretary of the Agency of Human Services, want to maintain their own credibility, not to mention their sanity, they should just ignore him. The auditor can always find the ear of a gullible press corps, but Mullin and Smith should just stand up and get on with it.         

####

N.B. In my last post, I misspelled the last name of Paul Heintz, the Managing Editor of VTDigger. The spelling here is correct. The blame is mine. Apologies.

Vermont Reform Now a Dumpster Fire: Can it be Contained; Can it be Put Out?

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.

Anya Rader Wallack Returns

    The University of Vermont Health Network moved today to shore up one of its most glaring weaknesses when it appointed Anya Rader Wallack Senior Vice President for Strategic Communications.

   Wallack, who was the architect of Vermont’s health care project, will become the fifth member of CEO Dr. John Brumsted’s top management team; the others are Al Gobeille, who is Senior Vice President for operations; Rick Vincent, the chief finance officer; Dr. Claude Deschamps, who leads the network physicians; and Eric Miller, the general counsel. Wallack will replace Theresa Alberghini DiPalma, who has resigned.

   “I believe the American health care system is in crisis and can only be fixed by people who have a clear vision for reform and are in a position to improve it,” Wallack said in network press release. “I have dedicated my professional life to

improving our health care system and keeping it affordable,” she said. “The UVM Health Network has an extraordinary leadership team. I share their vision and values and am excited to join them.”

   Wallack will receive a base salary of $400,000 per year, and will take over a major responsibility in the network, which is the one of the most important health care providers in the region, along with Dartmouth-Hitchcock in New Hampshire and Maine Medical in Portland. The UVM group is made up of six hospitals in northwest   Vermont and northeastern New York. The network deploys more than 1,500 doctors and other providers across the region, and serves more than a million patients a year.

   The UVM network along with the university’s College of Medicine is arguably the most valuable asset that the state has, not only medically but economically, but it has been routinely denigrated by a witches brew of opponents—Chittenden County progressives, who hate anything big; major portions of the primary care physician community; many of the small hospitals, who see the 500-bed UVM Medical Center as  threat to them; the state auditor who attacks the state’s Accountable Care Organization; skeptical treatment by the Green Mountain Care Board, biased  press coverage….

   Reversing the negative narrative around the UVM network will be Job One for Wallack. Can she do it?

Job One

   No one can be sure about that, but I offer the following assessment to my tiny corps of brilliant readers:

     Wallack is a very unusual player, and Brumsted’s ability to bring her on board the network ship is a brilliant stroke. So, what does unusual mean? And a “brilliant stroke” why? Stay with me here:

   The health care reform movement arose in Vermont about 1983 and followed a wandering track from then until around 2010-2011, when it accelerated dramatically in the wake of federal Obamacare and former Governor Peter Shumlin’s Single Payer initiative. Over that period, a total, a very generous total, of maybe 25 or 30 people actually understood how the health care system works and what it might take to reform it.

   Of that cohort, a tiny handful, meaning mid to low single digits, could be considered national class players in the reform space. Anya Rader Wallack is one of those; John Brumsted is another.   

   Wallack grew up in Bennington, and went to UVM, graduating in 1988. Her first important job was with Kimbell and Sherman, a new lobbying firm and Wallack’s flawless management of the back office functions there helped the firm grow to its dominant position.

   Her first big break occurred almost at once. In August of 1991, then Gov. Richard Snelling died unexpectedly, and was succeeded by Lt. Gov. Howard Dean. Dean was very close to Kimbell and Sherman politically, and when the new Governor had to scramble to assemble a staff, Kimbell and Sherman agreed to let Wallack go. She started out as deputy chief of staff, at 25 years old. And she didn’t just step into the routine minutiae of the governor’s office: Dean had inherited a major health care reform initiative, and he turned it over to Wallack. He also hired a tough, experienced health policy expert named Rachel Block and the two of them steered the first big health care reform project into the Legislature. At the same time, First Lady Hillary Clinton was putting together national reform effort, and Wallack served as one of Clinton’s state level advisors.

   The reform movement that crested in the mid-1990s failed in Vermont, as well as nationally and in the half dozen states that were in the reform vanguard. In the wake of the crash, Wallack left Vermont for a hospital job in Oregon. Reform would be dead for a political generation, but for Wallack, at 29 years old, the experience would turn out to be invaluable. In the early ‘aughts, she earned a Ph.D. in social policy from the Heller School at Brandeis University, one of the premier academics centers on health policy.

   She brought that extensive background to bear in 2011 when she led the Shumlin Single Payer initiative to passage and then served as the first chairperson of the newly-formed Green Mountain Care Board. Her first move there was to write a one-page memo to a federal Medicare official outlining the Vermont reform approach, a foray that put the state at the top of the reform effort nationally. The second thing she did was to get in touch with John Brumsted, the CEO of the Vermont Health Network to begin working on reform. No reform was possible then, or is possible now, without leadership from the UVM system, which delivers half of all the care in Vermont.

       She left Vermont in 2014 for personal reasons, before the single payer aspect of Vermont reform imploded, working at high levels first in the Rhode Island state government, and then at Brown University before deciding to come back to Vermont for a final effort to reform to full maturity. To repeat: Can she do it? Well, neither broad experience nor matchless credentials can ensure success. Still, getting one of Vermont’s best ever players back on the field has to be a plus.

   I said at the outset that the Brumsted’s addition of Wallack would shore up the UVM Network’s most glaring weakness. That weakness has been a stunningly inept performance in managing its own environment. UVM Medical Center hospital has the best quality and financial performance in the state. None of the 13 other hospitals in the state can match the 500-bed tertiary academic facility in Burlington. Eight of the 13 have 25 beds or less, the rest are relatively small; only Rutland, Bennington and Central Vermont should be considered full service hospitals going into the 21st century, when American medicine gets more expensive and more complex every day.

   The anti-UVM narrative has flourished over the last five years with no effective response. It is true, of course, that much of the criticism of the academic medical center is unfair, misguided, dishonest…but UVM during that period has had on its payroll a multi-million dollar public affairs apparatus that just never worked.

   If you’re looking for evidence for that, you might consider the contrast between the political environment in northeastern New York and Vermont. In New York, the hospitals just across the lake simply asked UVM to take them over and solve their financial problems. UVM did so, and Brumsted became a hero in New York. When he realized that the failing 40-bed hospital in Ticonderoga couldn’t be saved, he gutted the facility and turned it into a clinic with strong primary care and a state-of-the art emergency room. Given the assurance that UVM would watch over the place, the New York state health department ponied up the $15 million needed to do the work.

   In Vermont, in the face of a withering campaign of vilification, Brumsted has become Satan.

   Turning that around is critical both for UVM and the cause of reform in Vermont.

   For Anya Rader Wallack, that is Job One.

A Farce with Real Import

by Hamilton E. Davis 

   Vermont’s health care reform project, now in its 11th year, has been dead in the water for months, still well short of maturity. The barriers to progress have been simmering opposition in portions of the primary care community, small hospitals, and the Democratic-Progressive left in Chittenden County, not to mention the Health Care Advocate and the press. The focus of that hostility has been the University of Vermont’s Medical Center Hospital’s dominant role in the delivery system and OneCare Vermont, which is owned by the UVM Network and serves as the proxy-scapegoat for all the shortcomings of the reform effort.

   Reform of course has moved off stage under the lash of the COVID-19 virus, but its machinery has been grinding along nonetheless, without much notice. All that changed last week when Attorney General T.J. Donovan announced that he would sue OneCare on behalf of the State Auditor, Douglas Hoffer. Hoffer is demanding that OneCare Vermont disclose the salaries of all its 60 or so employees. OneCare responded that it had disclosed most of the relevant salaries, that it had complied with terms of their contracts with payers, and that it would fight the suit.

   In substance, the suit is of little to no importance—it’s a characteristic political ploy by the auditor, who specializes in them, and it will not drive any significant change in the operation of the health care delivery system or the process of reform, no matter which way a court decides. It’s also intriguing why T.J. Donovan has chosen to participate in this farce, about which more below. Why farce? Because we already know the salaries of the top dozen executives at the top of OneCare and those are the ones matter. And even if OneCare laid out every dime of salary it disperses to its entire staff, that information wouldn’t tell Hoffer or anyone else anything about the way OneCare operates, or what it does well or poorly. The suit, in short, is just harassment by opponents of reform.

   The evidence for that is just a computer click away. The salaries of the top dozen executives at OneCare have been available since last spring to anyone who cares to access the Green Mountain Care Board website. A selection: Vicki Loner, the CEO, got paid $408,774 in 2019, around the average compensation for the president of one of Vermont’s small hospitals. Sara Barry, her top lieutenant got $253,056. Tom Borys, the finance guy, got $162, 614. Norm Ward, the sole doctor on the staff, drew $382,367 See for yourself:

   At Governor Phil Scott’s last press conference, I asked Mike Smith, his secretary of the agency of human services, how he viewed the suit and what he considered its relevance to the reform project. Smith dismissed the whole thing as a “squabble” between a couple of other players, and said that he didn’t consider it relevant to the progress of reform. To the extent that the suit throws into question OneCare’s  openness to inquiry, Smith said he was entirely satisfied with OneCare’s “transparency.” He added:

    About a year ago I pushed for release of the salaries of those in the higher levels of OneCare. I asked them a 990-like disclosure; as you know, they aren’t a nonprofit now, but I want them to act like a non-profit so that you list the salaries of the agency. I didn’t ask for the salary of the receptionist, or maybe an executive assistant and others—I asked for the top salaries of individuals. OneCare did submit that information.

   I also asked OneCare to file with the IRS as a non-profit; the IRS hasn’t done that yet…but, from my point of view, the execution of the contract we have with the ACO we have enough look-see into their financials to feel comfortable. We have a lot going on with Covid and other things so we are going to leave this between the Auditor and OneCare.

    Smith’s view is particularly apt here because his Medicaid agency is the only payer that negotiates prospective payment, fixed price contracts with OneCare. Those arrangements are the closest in the United States to full replacement of fee-for-service reimbursement by block financing, or capitation. That shift is the essence of the Vermont reform project, and the grail for reform in the country.  

If the Suit is a Farce, Why Does it Matter?

   The fact of the suit, however, serves to illuminate the hugely troubled political and social landscape that the reform effort has to traverse. Some key elements:   

• The most basic problem is that almost no one who is not a specialist knows what OneCare does, or why it does it, or how it does it. OneCare is basically just a middleman or conduit for the flow of money into the delivery system. OneCare doesn’t spend a penny on health care: the north-of-a-billion dollars a year that flow through go directly to hospitals and doctors and it is those doctors and hospitals who spend the money to deliver care.

• The reason OneCare exists at all is that federal law has decreed that the Accountable Care Organizations are the proper vehicle to enable stand-alone hospitals and docs to offer a single price for delivering care to large cohorts of patients. The size of those payments, however, is negotiated by the payers and OneCare, but how the money is spent is entirely up to the individual hospitals and doctor groups. The ACOs are also tasked with gathering quality data and encouraging things like better coordination between providers to improve both quality and cost containment.  However, OneCare has zero effect on the quality of care delivered by either hospitals or doctors.

• Beginning in the mid-teens, some Chittenden Country Progressives and left- Democrats have carried out a vendetta against the UVM Medical Center, and the UVM Health Network. The lead player in that band was then Senate Pro Tem Tim Ashe. Ashe, now gone from office, contended repeatedly that UVM was a monopoly that was gobbling up all the smaller medical players and was forcing independent doctors to leave the state. UVM had to be stopped, he argued, if Vermont is to control its costs. His lieutenants in that campaign included Chittenden County Senators Michael Sirotkin and Chris Pearson; and the thesis was picked up at various times by a range of other players, including the state Auditor.

  An intriguing element in the suit is that the Attorney General, T.J. Donovan, is throwing his hat into the anti-UVM campaign. T.J. has never weighed in on reform itself in any substantial way. A couple of years ago, he assembled all the state’s reform players in a meeting in Contois Auditorium in Burlington, and they spent more than two hours laying it all out for him. Then silence.

  Any member of my tiny corps of brilliant readers is hereby permitted to speculate whether T.J’s foray into the weeds of health care reform might be driven by a desire to position himself for campaign for a seat in the Washington delegation, if a seat opens there, or for Governor, if Scott opts not to run in 2022.

• By far the most significant arena for speculation inspired by the suit is whether the Scott Administration, in the person of Mike Smith, the AHS chief, decides to take full ownership of the overall reform project; and give it the political leadership it will need to succeed. When the Scotties assumed office in 2016, they treated the reform project like a live hand grenade. By the end of their first term, they had moved into a position of support, but without any perceptible effort to actually make things happen.

  That began to change last fall when federal Medicare officials criticized the slow pace at which the Vermont project was ramping up. Smith, who was just concluding his first year as Secretary, stepped in immediately to say that he would “reboot” the OneCare operation, and get its shortcomings remedied. That initiative made practical political sense at the time, but the reality is that Smith will not be able to “reboot” anything, short of taking charge of whole project. The reason is that OneCare itself is severely limited in what it can do. It gets its day-to-day marching orders from the UVM Network headquarters—the Network CEO is chairman of the OneCare board. And OneCare isn’t really a separate player: the ACO is simply a consortium of the state’s hospitals, and, based on the written record, the state’s hospitals want no part of reform. They fear, with good reason, that if the small hospital network is forced to justify their very expensive but low volume service lines, they will be diminished to the point that several won’t continue to function as hospitals—they’ll be forced to downgrade to clinics, and some might not survive at all.

• Two other confounding issues. One of the most important is how the Scott administration, once it gets right into the engine room, meshes with the Green Mountain Care Board. Act 48, the foundation statute for reform, confers a huge array of powers and responsibilities on the board and it isn’t clear yet whether it can function both as regulator and designer of the final form of a delivery system recast to flourish in the 21st century. The second confounder is the fact that the Legislature is under new leadership in both the House and Senate and there is no telling how they will react to anything that will affect community hospitals.

   This whole mess has to be sugared off in the next six weeks or so because the financial course for the FY 2022, which begins Oct. 1, will begin to form in the next several weeks—the hospitals are putting their budgets together now for submission by July 1; and the GMCB will have to deliver their budget guidance for that process soon.

   Moreover, the Vermont reformers will have to determine the form in which they will petition federal Medicare officials for another five-year reform waiver. The reform project encompasses all the payers, but the critical payer is fully federally financed Medicare, since no hospital can survive without it.

    The first wave of reform is running from 2017 (a trial year) to 2022, and the new one will run form 2023 to 2028. Will we need any mid-course corrections? And will the structure of reform—including the GMCB, the Scott administration, OneCare Vermont, Blue Cross and other insurers, the UVM network, and the smaller community hospitals—have to change somehow? Who knows?

   And if you are inclined toward metaphysics: how will the Legislature react to the whole thing?

   Pretty hard questions. And consider that the reform players will be massively tied up for several more months with COVID.

OneCare Vermont Shouldn’t be a Scapegoat

by Hamilton E. Davis

  No single issue in reform has been so subject to ignorance, misinformation, bias and political manipulation as OneCare Vermont, the state’s Accountable Care Organization (ACO). And none is so critical to success. The essence of reform is the shift from fee-for-service reimbursement to block financing to doctors and hospitals, and there is no way to do that without an ACO. In essence, an ACO is simply a shell or a box that allows doctors and hospitals to combine to deliver care to large groups of people for a single fixed price. This innovative device was established in the federal law known as Obamacare.

   While the basic role of OneCare seems straightforward enough on the surface, the problem now is that OneCare is being made a scapegoat for all the pressures and cross currents belaboring the reform project. OneCare is a for-profit company, so obviously it can’t be trusted. OneCare is losing money. OneCare is wasting too much money. OneCare is cutting support for primary care doctors. OneCare is getting scolded by the federal government for not enrolling enough Vermonters.  Opposition is coming from some elements in the Legislature, the state’s Health Care Advocate, the State Auditor…The Secretary of the Agency of Human Services says he is going to “reboot the system.”

   This whole cacophony is amplified by wide spread ignorance of what OneCare Vermont actually is. It is characterized as some alien growth that has attached itself to the Vermont delivery system. In fact, OneCare Vermont is nothing more and nothing less than the Vermont hospitals, along with a big chunk of independent doctors. That doesn’t mean that OneCare doesn’t have any problems—it does. But its problems are the same problems that bedevil the entire reform effort. And solving them will require the concerted effort of all the major players: the Scott administration, which has provided no real politic leadership at all; the Vermont Legislature, which has been almost entirely an intellectual desert when it comes to reform; the Green Mountain Care Board, which is struggling to manage the restructuring of the hospital system; the business community, the single biggest beneficiary of reform, which has been missing in action on that vital issue and more.

   The misapprehension around OneCare Vermont arises from three sources. The first is that its nature and function have never been adequately explained by the reformers themselves. The second is that anti-reformers have chosen to use OneCare as a club to beat the UVM Network, and they have succeeded to a large extent. That effort has been centered in the Progressive community in Chittenden County, which appears to dislike the UVM system because of its size and dominance. The third is that while the ACO is a shell that holds nearly all the hospitals and most of the doctors, the interests of the large hospitals diverge from those of the small hospitals, so that trying to find a single “provider” message is difficult. Trying to accurately unravel all of these deep forces is impossible in a single post. But it is critical to at least not fog the environment with stuff that simply isn’t true.

Expunging the Myths

   The idea behind OneCare is pretty simple. For the 50 years leading up to the launch of reform in 2013, people moved in wandering paths through the delivery system, starting with primary care doctors and rising up the complexity scale to secondary and tertiary care, the former delivered in small and medium sized hospitals and stand-alone specialists and the latter in much bigger tertiary centers, many of which are also medical colleges. At each step along the way, the patient or his insurer paid for each episode of care. The system was both insanely expensive and marked by very patchy quality. The remedy long agreed upon by the policy community is to shift to block financing, which shifts the risks of medical care from the public to the doctors and hospitals. If a person needs to get her left leg amputated, and the doctors cut off the right leg by mistake, we (the public) pays once for cutting off the wrong leg, and once again for cutting off the correct leg. Bad medical care makes more money for providers than good.

   That doesn’t mean doctors try to make mistakes—they don’t. But they still make many mistakes, and until it costs them money, rather than cost us money, those mistakes will continue to drive overall health care costs into the stratosphere.

   None of this is to suggest that there are no problems inside OneCare. There are. The interests of the small hospitals differ from the interests of the big players, the UVM system and Dartmouth -Hitchcock. But the most tenacious stresses inside OneCare arise among the hospitals themselves, not with the OneCare bureaucracy. The workers there don’t make a trip to the water cooler that isn’t approved by the OneCare board, which is led by UVM and includes representatives from all the provider sectors—big hospitals, little hospitals and primary care providers. Moreover, the gargantuan job of recasting the culture and financing of the delivery system can’t possibly be carried out by one player or another: it will depend on the concerted efforts of the players. (OneCare Vermont), the regulators (Green Mountain Care Board), the state’s political leadership (the Scott administration and the legislature), the private insurance industry (mostly Vermont Blue Cross) and, the single biggest beneficiary (large employers).

   The performance of every one of those players has been problematic to a greater or lesser extent. That B minus effort hasn’t killed the reform, but it has very significantly retarded its progress, and it could kill it yet. No one can tell yet whether reform will fully mature, or drift away into irrelevance. We could easily return to the 1995-2010 era, with a sizable bureaucracy invested with serious regulatory powers accomplishing, basically, nothing at all. At the very least, however, we should at least get the fact situation roughly correct. We don’t have that now, especially in regards to OneCare, which is currently a scapegoat for various failures and blundering around that essentially affects the entire system. For example:

• When the subject of OneCare arises, commenters seldom get far into the first sentence before they note that OneCare is a “for-profit” company, the obvious implication being that it can’t be trusted. The for-profit trope is a red herring, which doesn’t mean that it isn’t effective. When Mike Smith, the newly-minted Secretary of the Agency of Human Services made his first appearance before a legislative committee last year he said it was necessary to convert OneCare to a not-for-profit company. Actually, it isn’t necessary.

  For-profit status is a requirement under federal law. OneCare was incorporated in 2012 by the University of Vermont medical system and Dartmouth-Hitchcock Medical Center, and during its eight-year life it hasn’t had a penny of profit, or a penny of loss. The underlying reason for the for-profit status is a kink in the federal law that limits participation in the management of non-profits; and OneCare is committed to giving all elements in the medical community a voice in its operations. So, its Board includes representatives of big hospitals, medium hospitals and little hospitals, along with independent groups of physicians such as Federally Qualified Health Centers, a key element in the primary care physician community. Putting all those potential beneficiaries on the OCV board forecloses the option of making the company nonprofit. Imagine the howl that would go up if UVM and Dartmouth kept the smaller guys off the Board.

• A major chord in the anti-OneCare chorus is the claim that its performance on costs and quality is terrible. OneCare is losing money for the system, money that would be better spent on the delivery of care.

The essential problem with all of this is that scarcely any of it is caused by OneCare itself. OneCare itself doesn’t deliver a scintilla of health care. OneCare can’t provide an aspirin or put a bandage on your knee. Every single piece of medical service in the State of Vermont is delivered by doctors, hospitals and their technical support. If there is a problem with medical quality, that problem lies with doctors or hospitals. OneCare can collect quality data from providers, but the content of that data depends 100 percent on providers. If the cost performance under the fixed price contracts is subpar, the problem lies with the providers, 100 percent.

• A major challenge for OneCare is the so-called scale problem. Vermont has agreed in its contract with the federal government to enroll 70 percent of its 550,000 eligible residents in fixed price contracts by 2022.

We are running behind schedule on that, which many of the players are pleased to blame on OneCare. The reality, however, is that the number of Vermonters attributed to OneCare is entirely up to the payers—Medicaid, Medicare and private insurers like Blue Cross and MVP. Plus, large self-insured employers. In that cohort, Medicaid is basically all in, but the rest are coming in much more slowly. Still, the progress has been steady. In 2017, the first full reform year, OneCare had 31,000 attributed lives for 31,000 people. The number of attributed lives went to 112,000 in 2018, to 172,000 in 2019, and to 250,000 in 2020. The number of lives actually covered by fixed price contracts, and the ones required by Medicare, is lower than that (the actual figures are a little squishy) but they have grown each year. And none of that should obscure the key facts. The first is that Vermont is leading the country in the direction it needs to go on health care reform. There are some 850 ACOs in the United States, and just two—Vermont and one in northern California—are actually moving steadily toward block financing that places the financial and quality risk where it belongs, with the doctors and hospitals who deliver the care. The second is that OneCare has no power to force payers to enter into the payer side of a fixed price contract and likewise no power to force hospitals to enter the execution side of such an agreement.

• One of the most difficult questions in the OneCare issue is its relation to and effect on primary care. The single essential function of OneCare is to enable the shift from fee-for-service reimbursement to block financing. The second most critical function, however, is the support for primary care in Vermont. OCV doesn’t have to do it; primary care has to a significant degree stood on its own for 100 years or more. And it can continue to do so. Still, once you get past the overall costs in the system, halting the steady, decades long erosion of primary care should be your next priority. And for OneCare Vermont, it is the next priority. Which has not insulated it from the environment described in the first sentence of this post—ignorance, misinformation, bias and political manipulation. Consider the current situation:

  In 2017, OneCare developed a program to shift about $20 million a year to support primary care providers who would attribute their patients to OneCare. There are about 700 primary care docs in the state, and if the $20 million were split up evenly it would send just under $30,000 to each one. Since nowhere near all 700 are willing to fully participate in reform the amount going to each eligible doc would run somewhere between $50 and $75,000. The basic formula, obtained from 2018-2020, called for OneCare, using hospital money, to pay primaries $3.25 per member per month (PMPM). The subsidy program was very popular, especially during the Covid crisis because the doctors got the money even when the patients didn’t show up.

  A few months ago, however, OneCare announced that it would inject a quality requirement into the subsidy program for 2021. Instead of the straight $3.25 PMPM, the doctors would get paid on a sliding scale from $1.75 to $4.25 PMPM, based on their performance meeting a 13-unit quality performance test. Pandemonium ensued. OneCare was cutting primary care reimbursement when those docs needed it most, the Legislature huffed. A group of 14 independent practices announced that they would leave the program. Five advocacy groups said that OneCare Vermont should be shut down, and the state should dump the reform effort. In response, the Green Mountain Care Board urged OneCare and the independent docs to find a compromise, which they did, essentially pushing the whole issue off for a year. Ultimately, however, the primary care docs will have to decide whether they want to participate in reform as it has been constructed in Vermont. They don’t have to. But in considering that, they might recall the comment by Kevin Mullin, chair of the Green Mountain Care Board to the effect that there is another PMPM number possible. That number could be zero—no subsidy at all.

However, there is no gainsaying the seething virulence toward OneCare in the reform environment. Like many of the incremental steps taken over the last couple of years, the compromise didn’t really solve anything. The self-defeating objections of the primary physicians to the proposed subsidy revisions are emblematic of the widespread misunderstanding of OneCare Vermont, and what the organization actually is. OneCare has plenty of problems, but most of them are the same problems that bedevil the entire reform effort. And solving them will require the concerted efforts of all the players. To demonize and ultimately abandon OneCare means destroying the reform effort itself. Which will return Vermont’s medical care system to the bad old days of increasingly unaffordable prices, poor quality medicine and unequal care for Vermonters. And it would remove Vermont from the rolls of the handful of pioneers capable of reshaping medical care for the nation as a whole.

A Reprise of Health Reform Savings

by Hamilton E. Davis

One of the most fraught issues in the Vermont health care reform project is whether the project has saved any money over its tenure from 2013 to 2019, the last year of full spending data for the state’s 14-hospital system. A specific sore point has been the performance of OneCare Vermont, the state’s Accountable Care Organization. Some have claimed that OCV has had no positive effect at all.

  At Governor Phil Scott’s last press conference, I asked the Governor’s team whether they believe that the effort has had any financial effect. I said at the time that my analysis showed the reform efforts, by the Green Mountain Care Board, OneCare Vermont, and the UVM medical system, have saved Vermonters at least $1.9 billion dollars over the reform effort since 2013. And I asked the Scotties what their figures showed. They had no answer at the time, but they may have a response at today’s press conference. I cannot attend that session, so I thought I would simply repost the analysis I carried out in February of 2019. The whole text is reprinted below.

Thinking big numbers: guess how long one million seconds is, in days, weeks, months, years?
A billion seconds? No calculating—just take a shot.

Health care reform has had a long gestation period in Vermont, nearly 50 years, and for most of that time the galvanizing issue has been the need to get costs in the delivery system under control. Costs began their meteoric rise in 1966 with the birth of Medicaid and Medicare, national programs to pay for health care for the poor and the elderly. At that time, health care costs in Vermont amounted to 6.6 percent of the Gross State Product. The federal programs put a blowtorch under the tea kettle of demand, and costs began a meteoric rise that took health care’s share of the total state output to today’s level of just under 20 percent.

I am dredging up this history now for two reasons. The first is that the cost issue has faded from the reform environment over the last few years, which could skew the process; and, secondly, because we are now able to assess the financial impact of the reform project over its first seven years. That impact has been huge: Vermonters have saved nearly $2 billion in that time, and that is before the full force of reform has really begun to bite. The current Legislature has no real sense of that; and in fact, it’s general posture recently has been at best skeptical and at worst hostile toward the project in its current form. The negativity appears focused on the role of the UVM health network and the state’s Accountable Care Organization, OneCare Vermont. The huge savings over the last seven years could not have been achieved without the combined efforts of UVM, OneCare, and the Green Mountain Care Board.

In a previous post, I used the metaphor of climbers challenging Mt. Everest to illuminate the reform saga. We are now at Camp Three in the Everest metaphor, and one of the biggest potential obstacles between here and the summit would be some kind of harassment by the Legislature.  I'll write more about this in a future post, but for now consider that possibility as a cloud in the sky on Leg 4 of the Everest climb.

Following is my analysis of the effect to date on the financial dimensions of reform.

The first step to rein in costs came in 1983 when the Legislature established the Hospital Data Council with a mandate to figure out how costs worked in the system. The hospitals did not account for all of health care costs; other costs included sectors such as long-term care and independent physicians; and it did not even include all the hospitals—the VA hospital in White River, and the Brattleboro Retreat were left outside the regulatory tent. Still, the state’s community hospitals that were, and are, the engine of cost inflation.

In 1987, the Council issued a report showing the spending track for the period 1981-1988. It looked like this:

  In 1981, Vermont hospitals spent $149,500,000. By 1988, it was $271.1 million, resulting in a compound annual growth rate (CAGR) of 8.9 percent during that seven-year period (CAGR is like an average only better). That was clearly unsustainable. And it was playing hob with private insurance rates. Medicare and Medicaid together account for roughly half of acute care spending, and since the federal and state governments don’t pay their full share of the costs, the difference has to be made up by private payers—the dreaded cost shift.

The Data Council had no actual power to force lower inflation rates, but that changed in the mid-nineties with passage of a reform bill that gave the state the power to “establish” hospital budgets. The new regime was called BISHCA, and it regulated the hospital system until 2011, when the Legislature adopted the current reform plan. The new sheriff was the Green Mountain Care Board, and for the first time in modern era a regulatory body began to act like, well, a regulatory body.

I say that because costs roared along out of control throughout the period of the 1990s and the ‘oughts. The sole break in that trend came between 1994 and 1997, when the inflation curve flattened markedly. The change came not from Vermont regulation, but rather from nationwide voluntary restraint by the industry during the managed care era. Once managed care went away, the cost resumed their climb on the same slope as the ‘70s and ‘80s.

Our contemporary view begins in 2001, which is where the GMCB data gathering really begins. (The earlier data exists but is in the archives where it is hard to get at.) The easiest way to follow the analysis is to look at the following graph.

From 2001 to 2009 costs inflated by 8.01 percent. That figure is labelled CAGR, which means Compound Annual Growth Rate, a number that is close to a simple average, but is considered slightly more accurate by the money priesthood. In my analysis I have ignored the actual spending figures for the Fiscal Years 2010, 2011 and 2012. The reason for ignoring 2010 is that the marked drop in the inflation rate was not the result of any regulatory effort by BISHCA, but rather occurred by a big reduction in demand from the 2008 recession.

In 2010, we entered the modern health care reform era, when Pete Shumlin, a state-senator from Putney, won a very close race for Governor, first against four very credible opponents in the Democratic primary, and then an equally credible Republican in the general election. Shumlin won his long slog through difficult political terrain in large measure because he promised to solve the problems of the health care delivery system. He called his project Single Payer.

Shumlin launched his reform project in 2011, with a strong focus on cost containment by the newly established Green Mountain Care Board. At about the same time, the UVM health care system, in partnership with Dartmouth-Hitchcock Medical Center, formed an Accountable Care Organization (ACO) to attack the cost problem at its roots by shifting reimbursement to doctors and hospitals from fee-for-service to fixed price contracts that put providers at risk for the financial performance of the system they run.

The first hospital budgets considered by the Green Mountain Care Board were submitted in FY 2013. The first system inflation rate in the new system was derived from the actual spending in FY 2012 compared with the 2013 figures. The figures for the succeeding year are shown in the bottom leg of the graph, culminating in the 2019 system budget of $2.6 billion. The average (or CAGR) was 3.91%.

Beginning with the same base—the 2012 system budget of $1.99 billion, I have shown an inflation track of a 7.0% for 2012 to 2019, on the assumption that those numbers would be expected from the regulatory regime preceding the GMCB. The actual figure for 2001 to 2008 was 8.01%, but I cut it back to 7 because some of the money mavens I talked to thought that 8.0 was a little high, based on some national data. I also wanted to be as conservative as possible. Anyway, for each of the seven years I compared the actual spending with the “what-if” or “but-for” figures on the top line to get a savings for each year. The total savings came to $1.9 billion for the seven-year period.

I was frankly astonished by that number. I believe it demonstrates two realities when you are dealing with health care costs. The first is that the financial demands of health care delivery system are absolutely voracious. The second is the sheer mathematical power of compounding. An example: I used the 7.0 figure in order to be conservative and not boggle the priesthood. The 7.0 figure yielded a total savings of $1.9 billion. The priesthood, however, has no Vermont figures whatsoever to support their 7.0 view. On the other hand, the numbers from 2001 to 2009 that generate the 8.0 figure are as solid as the Green Mountains.

The savings at the 8.0 level come to $2.6 billion, a difference of a cool $700 million. To get some sense of the potential financial rewards of pursuing reform aggressively, recall that last spring the Legislature and the Scott administration collaborated in a titanic battle, involving a blizzard of vetoes, a special session, and a threat to shut down Vermont state government, over a Scott effort to save, possibly, $26 million.

Given these huge savings, it passes understanding why there is not more appreciation in state government of the results of just the early phase of reform. Nothing that either the Scott administration nor the Legislature has even thought of doing approaches the benefits that have flowed from the reform process since the passage of Act 48 in 2011. And there are a lot more savings where the last ones came from.  A brief suggestion: put the state employees and the state’s teachers into OneCare Vermont so that their health care can be delivered under fixed price contracts that keep inflation under control…

The health care numbers are so big they are literally bewildering to think about. If we used the 8.0 and found a savings of more than $2.6 billion, that figure would amount to half of the whole General Fund budget for the state. Just shifting from millions to billions is hard for ordinary people to get their heads around.

Speaking of which: did you try the test at the beginning of this piece? A million seconds versus a billion seconds.

A million seconds is around 12 days, enough for a short vacation.

A billion seconds is some 32 years, a third of a very long life.

Health care reform lives in a B for billion world.

Mark Levine: Vermont’s very own Dr. Fauci

by Hamilton E. Davis

   Among the remarkable epiphanies wrought in American life by the Covid virus is a new appreciation for reliable information on important issues. The modern world has been starved of that by the rise of the Web and the concomitant collapse of the American newspaper. Information in this new dystopia has been politicized, degraded, weaponized.

   Arising from this rubble, however, has been a new kind of player on the public stage. He or she might be a bureaucrat, a scientist, a politician, or somebody who just wandered into the frame. What they have in common is that they clearly know what they are talking about, they speak plainly, they don’t lie, they don’t talk down to people. Those characteristics shouldn’t be rare in public life, but in this deracinated environment they certainly are, so that our new players feed not only the mind but the soul: people trust them, and public trust is very hard won these days.

   An outstanding national example is Dr. Anthony Fauci, the chief federal government spokesman on the Covid-19 virus. No person in the United States has as much credibility on the pandemic as Fauci. And he has achieved that working for Donald Trump, the highest of bars. Another is Michael Osterholm, a brilliant professor at the University Minnesota, who was well known in the scientific community, but who is now teaching the whole world how to navigate a pandemic like Covid. In New York, Governor Andrew Cuomo metamorphosed a thuggish political persona into statesmanship simply by talking sense to his constituents as the wave engulfed his state.

   Vermont is a tiny player in the pandemic world, but we have our own version of this new player. He is Dr. Mark Levine, Vermont’s Commissioner of Health. Levine was appointed Vermont’s Commissioner of Health by Governor Phil Scott in 2017 after a long career in the UVM system. Health Commissioner has never been a particularly high profile role in Vermont state government, but that changed earlier this spring when the Covid virus appeared. The Vermont response team was led by Scott along with Levine; Mike Smith, the Secretary of the Agency of Human Services; and Mike Pieciak, Commissioner of the Department of Financial Regulation.  Beginning in March, the Vermont team held three open press conferences a week, and Levine played an outsize role there because he was the medical guy and the core of the crisis was the medical dimensions of the virus. Over the tenure of the pandemic, Levine was involved in something like 50 press conferences; I believe that was more public exposure for a health commissioner than all of Levine’s predecessors combined.

   The whole Vermont team performed well in the face of the virus, but it wasn’t perfect, which I’ll get into later. But through the dark days, in the view of A Vermont Journal, Levine was rock solid. Like many of my colleagues in the ink-stained space, I have become a Covid web rat, surfing constantly for insight, facts that rang true, wisdom even—anything to keep the boat on an even keel in the roughest seas I have ever seen.

   During that time, I found Levine as valuable as the Faucis and Osterholms and occasional eminences from the University of Washington at Seattle or John’s Hopkins or University College London. Levine was never uninformed, flustered, anything but measured, steady. If I could have asked for anything more, it would have been that he come down harder on the blundering of some of the players.

    And, in my own fantasy, I have wondered whether Levine might be willing to expand his portfolio to pronounce on the insanely contentious issues surrounding the much broader issue of health care reform in Vermont. If he would do that, it would be a service to the state that would resonate for decades. We need truth-telling on reform as desperately as we need a vaccine for the Covid beast.

Talking to Fauci (Levine)

    The other day I got the chance to talk on the phone at some length with Doctor Levine. Since the virus debuted in early March, the Scott administration has communicated with the public by holding first thrice-weekly, now bi-weekly press conferences, with Scott and his top lieutenants making a variety of presentations, and then taking questions from 25 or 30 members of the media. For a functioning journalist that availability is better than no availability, but it is nothing like the pre-virus days when you could talk to pretty much anybody at whatever length you needed; you could ask follow up questions, resolve ambiguities, explore interesting lines of inquiry. So, it was a breakthrough for me to have Levine take my call. Our conversation reinforced the impressions of Levine I had formed since March.

   My first questions involved two performances by the medical system that seemed problematic to me, and which I think embody the gnarly issues that form the current environment. The first was the decision by Copley Hospital in Morrisville to use antibody testing on their own employees; the second was the generation of a fake news outbreak of Covid in Manchester that turned out not to exist. The Copley situation was problematic, but not clear-cut, while the Manchester mess was just bad medicine and bad public policy. My question to Levine: if he had come down harder on the Copley situation, could that have headed off the obvious blunders in Manchester?

    As is his wont, Levine laid the whole case out carefully, while characterizing the Copley initiative in as favorable terms as he could. “To their credit,” he said, “they tried to study it as opposed to just doing it.” And they did pick up a marginal piece of useful information; namely, that using a finger stick to get a blood reading is not good enough; you have to get a regular blood drawing. Beyond that, the whole Copley caper falls apart. First, as he does regularly, Levine went to the science.

   The gold standard for testing, he said, is the PCR version--the one where they stick the swab way up your nose. It’s not totally foolproof, it can give you a false negative if there is just a trace of virus in your system. It also takes time to process. But PCR detects the presence of the actual Covid genome, and hence is the most reliable test to see whether a person has the virus. There are two other types of tests; one is a serology or blood version shows whether you have antibodies to the virus in your bloodstream. In other words, whether you have had the virus in the past. The second is an antigen test, a shortcut version of the PCR test that detects fragments of the virus in the system at the time of testing.

   The Copley initiative involved testing their employees for antibodies, and Levine explained first how limited that process is. There are two kinds of antibodies, those that the body produces on contact with the virus, which tend to fade fairly quickly; the body produces a second type of antibody which can last for a very long time—real immunity.

  “What they learned at Copley,” he said, “is that it isn’t very useful to screen for (the short-lived) antibodies because they couldn’t correlate it with any PCR (the gold standard) data and the sample size was so small they couldn’t really conclude anything—it wasn’t very useful, it’s a small place and it’s a small number, and we didn’t have a very high level of disease in the state.”

   The test could be valuable, he added, if it was done with a large enough sample to inform state policy makers about managing the virus in the future.

 “What I have been saying in my press conferences is that this is not a test we should really do to inform an individual about anything—whether they should donate their plasma, whether they should go back to work, should they get a vaccine,” Levine said. “It’s not going to be helpful for individual decision making.”

   Okay, got it. I’ll explore later whether the Copley experience was just the kind of blind alley that is common in medicine, an error of execution, a publicity stunt, or something else. We also need to know if it was a waste of money, and if so, how much. What is clear right now, however, is that nobody in Vermont should follow the Copley example. How do we know? Because Mark Levine, MD., says so. He’s our gold standard. Can he be wrong? Of course, but someone in Vermont who wants to plow new ground on pandemic medical issues should be ready to get over a very high bar. The Copley caper didn’t come close.

The Manchester Debacle

   The Copley testing was ill-advised, but it didn’t appear to cause any serious damage. The same cannot be said of the testing mess in Manchester. A pair of local doctors there ran antigen tests in the late spring and early summer; recall that the antigen test is a quick and dirty look at whether the person has the Covid virus at the time of testing. The Manchester Massacre was a perfect storm of errors and egregiously bad behavior that rippled out in all directions and illuminated just how difficult it is to manage the pandemic. That narrative is still unfolding, and I will address it in a future post. This is a profile of Doctor Levine, so I’ll just sketch Manchester here to enough to make the necessary points.

 On July 16, a Thursday, Vermont Digger published an article saying that, “A Manchester health clinic reports 59 Covid cases in a growing outbreak.” That was possibly the most striking headline Vermonters had seen, beyond the reporting of the presence of the virus. Fifty-nine cases outside of a nursing home or prison dwarfed anything Vermont had seen since the virus appeared in early March. The headline and the top of the story was enough to cause panic in the Manchester area, and deep concern in the rest of the state.

   But then the first red flag appeared. “But seemingly contradictory reports between town and state officials about the surge of cases have sparked confusion among residents and a backlash against the state on social media.” Finally, the Digger piece gets to the real news:

   “At a press conference on Thursday afternoon, Health Commissioner Mark Levine said his department had confirmed just two of those (59) positive cases and didn’t have enough information to label the incident an “outbreak.” The story added that Levine said he took the information seriously, but that “We need to let the data and information come out.” Levine is bending over backward here not to trash the locals because in fact the data is out, and the story the data tells is that the whole thing is giant botch. I mean, two out of 59 cases confirmed. Really?

   The final count was 65 positives from the antigen testing, and just four could be confirmed. That is actually a national story because the consensus of the Web tribe was that the antigen tests had very few, if any, false positives.

   By the next day, the facts were pretty much clear. A small primary care group called the Manchester Medical Clinic with just two doctors mounted a testing program to find people with the Covid-19 virus. The test was only cleared for use in mid spring, so it was unproven in operation, and it and its basic design limited its use to people who had Covid symptoms; no responsible person ever thought it would displace the PCR test that was standard all over the world. In July the clinic reported that it had found 59 cases of Covid in the area of Manchester, a town of just over 4,000 in Bennington, County, and Londonderry, a town of 1700, about 17 miles to the east. That’s a huge outbreak for such a small area, and it caused an uproar.

   In substantive terms, however, the “story” was over in not much more than 24 hours. Mark Levine said on July 17 that standard PCR testing of the 59 cases showed that just two actually had the disease. That’s a 97 percent false positive rate, which is simply preposterous. It was obvious to anyone thinking clearly that there was something wrong either with the test itself or the way it was used.

    An obvious inference, however, couldn’t keep the story from spinning out of control. The Manchester Town Manager, John O’Keefe put up the erroneous data on Facebook page, and he said later that it would have been unethical not to have done so. The direct result was several downtown businesses closed down and a retail market program was aborted.

   The lead doctor at the Manchester Clinic, Janel Kittredge-Sterling, denounced Levine for bringing up the testing issue. She was quoted by Digger as saying Levine was creating a “false sense of security that may lead ultimately to increased spread of the virus.

   “Please don’t make the blanket statement that these are false positives and that people can go about their business, because that is dangerous,” Kittredge-Sterling said. “I’m concerned that these folks don’t go out and with this false sense of ‘Ok, my second test was negative. I can go out.’”

   Meanwhile, the Digger stories noted that there was talk on social media about the “deep state”, and criticism of the state for “undermining the (clinic’s) positive results.” There was talk of conspiracy theories. Ryan Ferris, who operates an ambulance company in Chittenden Country, said his firm had carried out antigen tests on some 800 workers, only one of whom had tested positive. Yet, he blistered the state officials for “jumping to conclusions,” and suggested to Digger that the standard PCR might be inaccurate.

   “For the Department of Health to jump from ‘Oh, they tested negative to PCR’ to ‘Oh, that test must be bad,’ that doesn’t bear out nationally, and it doesn’t bear out over the results of the several hundred we’ve tested…” He added he had offered to help the state solve its testing problem, but that they hadn’t taken up his offer.

   Mark Levine barely held his own against this tsunami of medical ignorance, financial self-interest, political irresponsibility, bad press performance—all in all, a goat rodeo. After a six day run, the whole issue went away, when hundreds of real tests showed only a handful of actual infections. Its long term effect, however, remains: Vermont has a desperate need for reliable information about issues like the Covid virus. Levine isn’t the only one who understands the issue, but he is the only one people will trust to lay it out for them. Here is what the public needs to know about antigen tests.

   Levine: If you use an antigen test within the first five days of infection in an area that has a “reasonable prevalence of the virus” and the person being tested has some symptoms, then it can give you a jump on getting the person tested, isolated and treated. That’s not what happened in Manchester, Levine said.

   “Many of the people they were seeing we didn’t think satisfied the definition for Covid in terms of the victims they presented,” he said. “And on top of that they had a bunch of people we regarded as having no symptoms, and that’s not where the test should be used. And so, there were a lot of problems in execution…

   “The problem,” he continued, is that this test is now being used at work sites. People are marketing it and using it at a work site to reassure the employer that the employees are free of disease and to reassure the public facing those businesses that the employees are free of disease. And the reality is (the test) is not meant to be given to people who feel well and don’t have Covid. “

Being Mark Levine

   It may have seemed tedious, even to my tiny corps of brilliant readers, to follow the meanderings of the Copley and Manchester adventures, but I believe it is necessary to understand the environment in which Levine works, and the difficulties he faces.  A hospital goes off into an ill-advised medical adventure, a couple of emergency room docs blunder into the weeds on Covid testing—and blame Levine for introducing sanity into a public health crisis; and a business guy markets a marginal Covid test on employers in Chittenden, and trashes “state health officials” when his product is described as basically useless. And every piece of half-baked junk gets amplified by the dodgy health care reporting of VTDigger. (Example: Digger had the last word on the Manchester mess: “Testing company says Manchester tests were accurate”)

   There is nothing easier in Vermont today for people who have no serious credentials to say, in effect, ”Hey, it’s just Levine. What does he know?”

   So, my question to the Health Commissioner was, do you need to get tougher? Do you need to come down harder on the actual performance of the various players? Do you have a plan to bypass the garbage flying around so that the Vermont public gets a clear view of the issues involved? Levine said he intends to do just that.

   “That will probably happen,” he said. “I am being somewhat respectful of the process, and I want the full report by the FDA (on testing) to come out, no matter what it shows, to help guide us and explain what went wrong in Manchester, not in a shaming way, but as an example, and then be able to reiterate what I said before about who the appropriate audience for this test is, where it should be used, where it shouldn’t be used.

   “I have maintained all along that we will use these tests in Vermont…but it will be done under the right terms and the right conditions.”

   Okay, Mark, but do you have a plan to articulate those terms and conditions at the front end and thereby foreclose poor performance by the various players?

   “I absolutely do have a plan; that’s why I want to have the support of the investigation by the FDA, because I will not say anything different than I am going to say anyway. But having that investigation will reinforce the point I want to make. That’s key.”

   Levine sounded determined to me, and his getting more forceful would be an important advantage as Vermont navigates the white water that lies between where we are now and either a vaccine or herd immunity. Enhanced oversight by Levine and the rest of the Covid team will be both difficult and important. Difficult because so many of the players are driven by ignorance, self-interest and political forces. Important because the state is already badly stressed by demographic and financial forces. The underlying issue is that Levine’s basic decency and understated style can work against him, as we saw in the Manchester case. My own view is that we can count on Levine—he is one of the vanishingly small number of national class players on the field.

   That conclusion gave rise to my personal fantasy: that Levine might move beyond his immediate concerns with the virus to the broader issues that stand in the way of driving health care reform to full maturity, and a delivery system that is sustainable into the 21st century. That question is nowhere near as immediate and visible as the Covid battle, but it is much more difficult financially, socially, politically and culturally. So, if Levine could extend, or be asked or directed to extend, his portfolio to commentary on reform issues it would an important asset going forward. Those issues abound—what services should the small Vermont hospitals deliver; should Northwest Vermont Medical Center in St. Albans build a new Intensive Care Unit with Burlington’s Medical Center nearby; should 25-bed hospitals do hip replacements, or vascular surgeries? And dozens more. Vermont seems to me to be an information desert and a reliable medical authority would be a huge help.

   Would Levine be interested in that?

   He said he would, and that he believes that the Covid emergency could drive a new emphasis on public health by governments. In the U.S., he said, governments normally spend two to three percent of their budgets on public health, while the figure in Europe is in the teens. “The pandemic should make people so much more aware of the shortsightedness of that approach,” Levine said.

  And those nasty questions attendant on reform: Should Vermont have someone who can provide medically credible advice there?

   “Absolutely,” he said. “We know we can’t spend money on everything under the sun,” he continued. “The pandemic will help drive reform based on value over volume…”

   Failure by Vermont to wring the best out of Levine’s skill and knowledge and the public trust he has engendered would be to waste one of the state’s most valuable assets. Vermont can’t afford to do that. Not even close.

Vermont Hospitals Dig in their Heels on Reform

by Hamilton E. Davis 

   In my most recent post, I suggested a solution to the most difficult challenge standing in the way of full maturation of Vermont’s health care reform project. The challenge is to right-size the state’s community hospital system, which today makes no medical or financial sense.

   The essence of the Manifesto called for maintaining and extending full hospital operations in Burlington, Rutland, Berlin, Bennington and implicitly, Dartmouth-Hitchcock Medical Center in nearby New Hampshire, which delivers tertiary care to the eastern half of the state. The remaining 10 smaller hospitals should be stepped down to clinics of various capacities, depending on local circumstances. The basic task there is to provide strong primary care and emergency services, and possibly maternity care.

   What needs to be scrubbed from the community hospitals is care, much of it surgery, that has too little volume to ensure that the doctors and support teams stay clinically sharp as well as too little volume to enable a hospital to achieve a unit price that makes sense. If your hospital is performing 27 hip replacements a year, then the cost per case of maintaining the resources to do hip replacements is a huge waste of money. A Vermont example of that was the maternity unit at Springfield Hospital that was delivering 125 babies a year, a little more than two babies per week. That mismatch was a major contributor to the hospital losing $150,000 a week on its way to bankruptcy court in Rutland. A New York example was the heart bypass operation at the hospital in Plattsburgh, which was doing 110 bypasses a year and helping the hospital to lose $5 million a year — not to mention that the quality was just plain bad. I covered this in a previous post on reform efforts in New York’s North Country.

   Despite the obvious need, executing the right-sizing effort would be hugely difficult under the best of circumstances. It will be incomparably more difficult in the face of the full-throated opposition from all the state’s hospitals, including the UVM health network, whose leadership knows, better than anybody else, how critical it is to rationalize the system going forward. After all, the network has already carried out just such an exercise in northeastern New York State: the result put a collapsing four-hospital system there on a solid footing for the first time in four decades.

   The importance of getting this right, and getting it right as rapidly as possible, cannot be overstated. Small rural hospitals are crashing all over the country because they are too small to keep up with the complexity and soaring costs of 21st century medicine. The remedy nationally is a wave of outright closings or consolidation into much bigger organizations that are converting increased size into outsized market power. Check out the stock performance of United Health Group: 2019 revenue $242.2 billion; stock price more than doubled since 2016.

   The only place in the country where that dynamic is not present is the Vermont hospital system, but the Vermont reform project, and the whole system itself, is in crisis. That squawking you can hear in the distance is every Vermont health policy chicken coming home to roost right now. The loudest squawking is coming from the Vermont hospitals themselves. It sounds clearly in letters that the hospital association chief Jeff Tieman, the CEO of the Vermont Association of Hospitals and Health systems, wrote to the Green Mountain Care Board on March 11 and August 4, and in Tieman’s testimony to the Board on July 15.

   Tieman’s basic case is that all the hospitals are needed to deliver care in their current configuration to their communities; that they have no time or ability or need to examine, explain or justify what they do; that the Green Mountain Care Board is overreaching its authority by even asking those questions; and that the Board should just give them the money they say they need. Of course, the hospitals say they are all-in on reform, but that even looking at what is actually going on is a “conversation for another day.” Have I overstated the situation? Let’s look at the Tieman case.

The Hospital Case

   Let’s start by unpacking Tieman’s March 11 letter to Kevin Mullin, chairman of the Green Mountain Care Board. Tieman is the spokesman for the hospitals, but his letters, including the March 11 version and a similar, slightly toned-down missive on  Aug. 4, were signed by all the hospital CEOs along with some other major players.

• Tieman’s first point is that the hospitals “are leading the way in reform” but that the demands of the Green Mountain Care Board are imposing an increasing administrative burden “without a clear benefit.” That is particularly difficult now, he asserted, while the hospitals are fully engaged in trying to manage the Covid-19 crisis. “At all times we must be fully prepared and adequately resourced to meet community need—even a brand new and rapidly evolving need like Covid-19,” he wrote.

  These points amount basically to lobbying against what hospitals just don’t want to do.  In the first place, the “hospitals” are not leading the way to reform. The UVM system is leading the way, but the others are just trying to keep their noses above water. The hospital association posture is driven entirely by the small hospitals, and has been since reform was first bruited eight years ago. Bea Grauce, Tieman’s predecessor, horrified by the idea of a 3.5 percent cap on annual hospital inflation, warned that the hospitals might not be able “to accomplish their mission” — the classic ‘Your Money or Your Life’ ploy. (The cap actually has worked well) The Tieman argument is squarely in the same vein.

  Secondly, the claim that the hospitals are the bulwark against Covid really doesn’t stand up to examination. All the hospitals suffered financially from the loss of revenue during the four months they were shut down, but a major piece of that damage is being made up by federal help, and the hospitals are now back to full operations. The fact is that Vermont hospitals had hardly any actual Covid traffic.  The Tieman letter also asserts that, medically, the hospitals are still fully engaged by the virus. That is just inflated rhetoric: According to Dr. Mark Levine, the health commissioner, his office gets regular reports on hospitalized Covid cases, and the number varies from zero to two. That’s for 14 hospitals. Even the statewide number for people under observation in a hospital runs to the mid-teens or less; and almost none of those actually have the disease, Levine said. If a medical organization can’t handle that level routinely it shouldn’t be a hospital. And if a community hospital has a Covid case where the life of the patient is truly at risk, it should transfer the patient to a tertiary center, or at least a facility with a full ICU.

• The hospital’s second major demand is that the Green Mountain Care Board move away from a common inflation target and judge hospitals based on their individual performance. Specifically, the Board should acknowledge factors that are beyond the hospitals’ control, including drug prices; salary and wage growth, “given Vermont’s limited and shrinking work force; expense growth owing to aging patients. Finally, the Board should “Base budget decisions on objective data and information.”

  Making hospital decisions on a case-by-case basis is a perfectly reasonable proposition, which is probably why the Board does it now. Example: in the 2019 budget hearings, the Board the allowed UVM to charge private insurers two percent more than the year before, while allowing Copley Hospital to increase the same charges 9.8 percent. Different situation, different decision. Happens all the time. Also, pretty striking for the hospitals to describe the salaries they pay as beyond their control. Who else controls them? From 2000 to 2009, every Vermont hospital doubled its budget, and the bulk of that money went to huge salary increases for bigfoot doctors and administrators. And, finally, “Base budget decisions on objective data and information?” That is precisely what the Board is trying to do with its call for sustainability plans, and it is precisely that which the hospitals are terrified of; and it is why Jeff Tieman is desperately trying to fend off the idea. He knows, and every signer of his letters knows, that the current organization of the community hospital network makes no sense medically or financially.

• Which is the reason for the main case made by the hospitals in the two Tieman letters and in his testimony to the Board on July 15. The hospitals’ main objection is to the Board’s demand for “sustainability plans” from at least six small hospitals, and possibly more. That issue has been on the table for a full year now, and the small hospitals are totally opposed because they know their current business models are, in fact, not sustainable. Tieman’s specific points in his two letters to the Board:

  • Too much information is being asked for.

  • The small hospitals do not have the ability to determine the cost efficiency of their various service lines.

  • The Green Mountain Care Board request “exceeds the reasonable statutory authority of the Board. GMCB has authority to approve hospital budgets. Any sustainability plan must fit within this context. Themes intended to be addressed by the budget process—e.g., efficient and economic hospital operation, adherence to peer group norms and provision of an integrated holistic system of care-- are lost in the proposed service line analysis.”

And the take home message on reform:

“If sustainability means ensuring each hospital can keep serving its patients and communities, then it is achieved as part of the GMCB’s already exhaustive annual budget review.

“If sustainability means planning and managing the next iterations of health reform and system transformation, that is an important but different conversation.”

   There is some more in the hospital screed, but my tiny corps doesn’t need to look much further than the last paragraph. The “efficient and economic hospital operation, adherence to peer group norms and provision of an integrated holistic system of care” are exactly what the system needs, exactly what it doesn’t now have, exactly what the GMCB needs the relevant data to pursue, and exactly what the hospitals are fighting hard to avoid giving them.

   Failure to engage with this issue now would be devastating to reform, and to the health of the Vermont system as it enters the third decade of the new millennium. There’s a big chunk of federal money now available to hospitals and it could be spent on putting them onto a sustainable track, or it could be used to just keep trying to fend off the inevitable. Moreover, when the Covid beast goes away, the “smalls” are going to find that neither the federal government, nor state government, nor private insurers will be able to pay the price for a palpably unaffordable system.

   We won’t have to wait long to see how this policy conundrum gets resolved. The Green Mountain Care Board will hold its first 2021 hospital budget hearing today. The decisions on the well-north-of $2 billion dollar system have to be reached by late September.

   Cross your fingers.

Tiny Corps Speaks; Attention Must be Paid

by Hamilton E. Davis

   My last post was a Manifesto declaring a view about how health care reform in Vermont should proceed. I said there that I would begin to publish comments on these and future posts from my tiny corps of brilliant readers. Those comments and my responses will sit on top of the piece in question. I’ll call it:

POINT – COUNTERPOINT

Toni Kaeding: Oops, Brattleboro?

Right, mistake here. I should have included Brattleboro in the small hospital group.

Bob Zeliff: This is a great and much needed discussion. We need to substantially reduce the unnecessary overhead and improve the efficiency of our hospital and health care delivery system. We have the "bones" of this in place with the GMCB and some limited consolidation done by One Care. What we need is a real vision for Vermont. Neither One Care or GMCB has done this. Both would claim it is not their job. The State leadership must step up with some prompting. Great start with your manifesto.

Zach Sullivan: After reading your most recent piece, I went back to the piece that you'd written almost exactly a year ago (August 5th, to be precise) and the North Country. I actually think that you missed the real heroes of that story - the Board members at Moses Luddington who decided to shut the hospital down (or to put it on a path where they knew it would be shut down - I don't know the particulars of it). That might be worth a little more exploration to see what needs to happen in Vermont if no one has the political will to impose consolidation from the top (which I don't think they will).

   I have written about the way the UVM health network has recast the hospital system in far northeastern New York. That initiative involved closing Moses Luddington Hospital in Ticondaroga and replacing it with a primary care, emergency room clinic. The network then integrated the Ti clinic with the community hospital in Elizabethtown and the medium size hospital in Plattsburg. It’s a strikingly effective model that could be adapted to Vermont, if anyone here was interested. I haven’t seen any such interest.

John Perry: This is a fine (not to put too fine a point on it) manifesto, but like others I have read (Marx, e.g., or Dalton Trumbo) it neglects a few details and makes other assumptions about human nature and the power of technology) It might work if, for example, we had statewide broadband and rapid public transit. It might work, also, if we relocated to the five major metropolitan areas. You know, Metropolitan Montpelier, with its massive high-rise moderate income housing developments; metropolitan Bennington with its excellent employment opportunities and industrial center; and a terrific road system (perhaps with teleportation capability) for the outlying areas (outlying, as in more than 1 hour from any of the "metropolitan areas" e.g. most of the Northeast Kingdom.) Perhaps, with enough helicopter pads at the clinics, the transportation to the megahospitals could work.

Your column, as usual, is provocative. The manifesto, as you rightfully acknowledge, needs a little work. For me, I like "socially distant" small hospitals, close enough to me and my family.

John McClaughry: Ham observes that “the problem is that the regional community hospital system was built for the Vermont of 100 years ago, and it is both medically and financially unsustainable: we just don’t have the money to pay for it. Most of the community hospitals are simply too small to provide 21st century medicine at a full hospital level. Their finances are shaky at best and they are trying to finance the things they should do by doing things that are too complex for them…”

    This point was powerfully made in 2009 in The Innovator’s Prescription, by Clayton Christensen MD, Jerome Grossman MD and Jason Hwang MD, all of Harvard Business School (2009). In it the authors analyze today’s hospitals from a business management standpoint. They conclude (Chapter 3):

“The organizational paradigm of the general hospital coalesced in an age of intuitive medicine. The entire hospital was essentially a solution shop. But today’s hospitals are substantially different. As technological and scientific progress enabled standardized processes and treatments for precisely diagnosed disorders, hospitals commingled value-adding process and solution shop activities within the same institution – resulting in some of the most managerially intractable institutions in the annals of capitalism…

Hospitals need to deconstruct their activities operationally into the two different business models: solution shops and value-adding process activities...Our biggest and best medical centers will be able to bifurcate themselves. Smaller hospitals, however, will need to focus on becoming solution shops or value-adding process hospitals, or simply expect to be liquidated through disruption.”

    Elsewhere the authors address some additional issues: location-sensitive emergency services, hospice services, and the network function of managing patients with chronic conditions (who account for seventy percent of health care spending, and require regular urging and monitoring.)
    No wonder Ham’s Manifesto has aroused the wrath of the likely disruptees.
    As I observed in my commentary of August 5, what we call “health care reform” comes down to “legislation to have the government compel somebody else to pay more of your health care costs. That ‘somebody else’ includes, variously, the taxpayers, your employer, others in your insurance pool, and the providers themselves.”
    Adopting the ACO model in effect deputized the ACO, mainly owned by UVMMC, to wield the state’s coercive hammer to control costs (every politician’s health care mantra) by forbidding or starving high-cost providers out of business. This has the great advantage of insulating “the government” from making unpopular decisions about which providers flourish and which expire, a major debility of traditional single payer schemes.

John McClaughry is a very conservative policy analyst, with broad experience both nationally and in Vermont. He is my toughest critic; he particularly hates government intervention in what he believes should remain in the private sector. Because of that it is hard for me to engage with him on reform; I once wrote that his views were frozen in the second Jefferson administration (1804-1808) and he responded only partly tongue-in-cheek that I was entirely wrong—that his views centered on the first Jefferson administration (1800-1804). If he gets free of his ideology on American politics and government, he is a surgically precise thinker.

Connie Godin: Love Copley but the skiers could def go to Burl or CVH (I'm old too many name changes) to get their broken bones fixed which has been their cash cow. Maternity should stay there with the "clinic/ER". I like your Manifesto.

Allan Ramsay: This is quite a manifesto.  Henry Tufo made a similar argument thirty years ago.  "All we need is five or six hospitals and some fast ambulances."

    Here are my thoughts on what the eight hospitals could become:

1) Regional Primary Care Hubs: focused on prevention but including urgent care, retail care, mental health, telecare, home visits, laboratory testing, and imaging. (Birthing center would be optional but the malpractice costs would probably be prohibitive.) 

2) Centralized care management and community based services. Including the "hospital-at-home" concept, home based rehabilitation and long term care, and comprehensive end of life care.

3) A hub for management of the social determinants of health including nutrition, housing, transportation, aging, and broad band access.

     I spent time in Cuba several years ago to understand how they delivered health care and achieved such good outcomes at low cost.  I wanted to set up an elective rotation for our family medicine residents.  This is exactly how their regional delivery system works. The rotation did not work out because of a diplomatic shift  (Bush called out Cuba as part of the "axis of evil"), but I learned a lot. 

Allan Ramsay is a veteran primary care doc with some four decades of practice, mostly in the UVM system. Former member of the Green Mountain Care Board. Most knowledgeable member about the workings of the delivery system, then or now. Powerful advocate for the primary care physician community. We disagree about some aspects of reform, but I think he is a hugely valuable player on the reform field. I listen to and parse every word he says. BTW, the late Henry Tufo was one of the most influential docs to work at UVM in the modern era. I consider him my mentor, and Allan worked with Henry for many years.

R. “Mort” Wasserman: Enjoyed reading this manifesto, especially the references to hospital affiliation. The state faces some difficult choices. Are you familiar with the recently published Rand study on rural hospital affiliation and its consequences?

Yes, I am familiar with Rand and the issues surrounding hospital consolidation in the U.S. I will write about that issue soon. An interesting aspect of that is how far in the weeds some key members of the Legislature are on that question.  

Paul B. Stanilonis: I am an Octogenarian and think that centralized Montpelier and gov has spent millions and has very little to show for it when looking at healthcare reform.  To think they will get it correct--- dream on.  

    Your current journalistic effort is well done and ultimately the healthcare system will implode in Vermont. It will be driven by market forces and hospitals will close in bankrupt condition. This mess will see systems fail:

1.      More and more Vermonters will be unable to purchase health insurance

2.      Vermont businesses will not be able to afford Health Insurance

3.      The cost of healthcare will continue upward driven by covid-19 demographics and ever exploding tech inventions, to say nothing about the capitalist pharmacology business model

    This whole mess is driven by the fact there are too few people paying into the money pot. The all payor model will fail without more people paying in. We need to completely redesign the business model. Vermont does not have the population to do it alone. When you were younger, Vermont and NH Blue Cross Blue Shield shared the burden. UVM Medical Center has the vehicle for reform. Capital Health Care-Kaiser Permanente all failed. Cost too high and not enough people paying in.

    Green Mountain Health Care Board will keep pussyfooting around, spending over 2 million a year while the system fails. As you well know, a shortage of providers in primary care is looming.

    Northern NY – VT – NH based on service areas should have a united business plan. How we deliver healthcare needs to be a baseball game!! Not built on golf, tennis and cronyism. Montpelier – politicians should not be the design build folks.

    Anyhow, stay well, wear your mask, stay home, wash your hands and keep writing. There are a few of us reading!!

The Right Path for Reform: A Manifesto

August 2, 2020

by Hamilton E. Davis

  In March of this year, the Covid-19 pandemic dropped a viral curtain over modern life as we have known it. The arrival of the beast coincided with the cresting of President Donald Trump’s campaign to trash American politics, cripple our national government and subvert our notions of honesty, decency and intellectual integrity. There have been myriad effects from these evil winds, but one of the most important has been the loss of focus on the reform of our health care system. That loss affects the whole country, but it has fallen with particular force on Vermont because Vermont has been in the forefront of the reform effort.

    That is unfortunate because the state is on the cusp of what I believe is the single most important policy decision it has ever made—what to do about its hospital system, and more precisely, the system’s small community hospitals. We are a state of just over 600,000 people and we have 14 ½ hospitals delivering care to them at annual cost of more than $2.7 billion. That is billion in case you skipped over it. The half a hospital is Dartmouth-Hitchcock Medical Center (DH) in nearby New Hampshire, which delivers tertiary care to the whole eastern part of the state. Forty percent of its patients are Vermonters.

   The problem is that the regional community hospital system was built for the Vermont of 100 years ago, and it is both medically and financially unsustainable: we just don’t have the money to pay for it. Most of the community hospitals are simply too small to provide 21st century medicine at a full hospital level. Their finances are shaky at best and they are trying to finance the things they should do by doing things that are too complex for them…

   The obvious question is what to do about it, a question that the whole state policy apparatus has been wrestling with one way or another since 1983, and directly since 2012. I believe the reformers need to come up with their answer by mid-September. And in my view there is only one sustainable path forward. Here it is, call it a…

Manifesto

    Vermont needs five fully elaborated hospitals—in Burlington, Lebanon, N.H., Rutland, Central Vermont, and Bennington. Smaller hospitals now operating in St. Albans, Newport, St. Johnsbury, Windsor, Springfield, Randolph, Middlebury, Brattleboro and Morrisville should be stepped down to some level of clinic, whose basis would be strong primary care, a strong emergency room, a few inpatient beds for patients transitioning from hospitals to home,  and possibly maternity services, depending on travel times in their regions. The smallest hospital, Grace Cottage in Townshend, shouldn’t be a hospital at all, a fact known to everyone except the people of Townshend. A right-sized hospital system could save Vermonters hundreds of millions of dollars a year, and its quality would be better. Failure to do so will leave us with an unsustainable medical and financial mess.

   If the solution is that obvious, why don’t we just do it? Glad you asked. Because it’s complicated? Nope, it’s actually hideously complicated. But it’s also essential to the physical and financial health of the entire state, so Vermonters need to step up. I suspect that some of my tiny corps of brilliant readers will help lead the way, whether they agree with me or not.

   The Vermont reform effort was launched in 2012, and has achieved a significant level of success over its eight-year tenure. By using its regulatory power, the Green Mountain Care Board has cut the annual inflation rate in the state’s hospital system in half, saving Vermonters half a billion dollars in the process; and, working together, the state’s hospitals and doctors and the Scott administration have built the infrastructure needed to shift the flow of money through the system from fee-for-service to fixed price contracts. Fixed price contracts are the only reliable route to a high quality, cost efficient and hence sustainable health care delivery system for the 21st century.

   However, every step along that path has been difficult, often tortuous. The initial machinery to control costs in Vermont hospitals was put in place in 1983, and that machinery, strengthened along the way, accomplished nothing much over 30 years; we didn’t get serious until 2013. And shifting to fixed price contracts is incomparably more difficult. Our first execution of that final step took place in 2017, and there has been too-slow, but nonetheless steady progress since.

   The process, however, requires tearing up not just the financing in the health care delivery system, but the culture of medicine itself. Every single doctor and every single hospital has grown up in a medical environment where the more stuff you do, the more money you make. Moreover, the implications of the reform effort reach beyond medicine to the social and political structure of the state. The Vermont project makes perfect financial and medical sense, but it would have very severe social and political consequences. The local hospital is often the biggest employer in town, and the medical and management bigfeet take home huge paychecks by Vermont standards. CEOs get paid $400 to $600,000 a year; an $800,000-a- year surgeon could support a whole town’s Little League program out of petty cash. Vermonters should know, however, that if they continue propping up their failing rural hospitals with the current financing scheme they will be opting for care that is wildly overpriced and of questionable quality.

   That issue has been seething under the surface since the onset of reform, but it is rising to the top this summer. The vehicle carrying it there will be the Green Mountain Care Board’s annual hearings on the hospital budgets for Fiscal Year 2021, which begins Oct. 1. Within that framework, the central question will be whether to require the hospitals to prepare and defend “sustainability” plans. What that means on the ground is that they will have to show that their high revenue service lines garner enough patients per year to ensure that those medical teams do enough cases to meet at least the threshold quality requirements; and that their unit costs make sense. The Green Mountain Care Board wrote that requirement into the budget orders for six of the hospitals last September, and they are considering whether to extend it this year to all hospitals.

      Despite the glaring need to right-size the system, the Vermont hospital association has gone into full-throated opposition mode. In a letter to the Board on March 11 of this year and in testimony on July 15, Jeff Tieman, the president of the association, said that the sustainability effort was a terrible idea. It isn’t needed, he said, it can’t be done, and, in any event represented “regulatory overreach” by the Board. The letter was signed by all the hospital CEOs in the state, including Dr. John Brumsted, the CEO of the UVM health network, and Dr. Steve Leffler, the President of the UVM Medical Center, Vermont’s academic medical center, which delivers half the care in the state. The UVM network also includes Porter Medical Center in Middlebury and Central Vermont Medical Center in Berlin—adding those to the Burlington center runs the UVM dominated portion of Vermont care close to 60 percent.

   Tieman said that the sustainability initiative was doubly unfortunate in the light of the damage that the Covid virus had inflicted on hospital budgets. The reality though is that the sustainability initiative was discussed at length last summer, months before the virus appeared, and the small hospitals were just as hostile to the idea then as they are now. They saw it then, as they see it now, as financial suicide: if they are forced to deliver only care that is very low risk medically and makes financial sense, they won’t be able to stay in business. Of course, many of them are having trouble staying in business, offering every lucrative service line that can draw even a trickle of patients.

   Still, the Tieman broadside appeared to have a strong effect. At its July 15 meeting, the GMCB could have voted to affirm the detailed format for the sustainability push, but Board Chair Kevin Mullin pulled if off the agenda quickly. The Board can’t afford to delay the issue any more though, and they will have to face it at their meeting on Wednesday.

   Even if they vote to go ahead, which I suspect they will, the real test will come in the way the Board steers the individual hospital budgets. And in a very real sense, it isn’t up to just the Board. The whole policy apparatus, including the public at large, will have a voice in the ultimate outcome; and they should make their voices heard. That is how the best public policy gets made.

   It will not escape the notice of my tiny corps that I have made a big bunch of assertions here, but I haven’t actually proved a damn thing. I know, I know. But, hey, it’s a manifesto after all. In any event, there is plenty of evidence available, and I will lay it out to the best of my ability over the next month and a half. A Vermont Journal will follow the process as closely as possible; and while the above has been a panoramic view, I’ll shift now to a very tight focus. The issues will get a vetting in every hospital budget decision. The same analysis needs to be made of the performance of all the major players—the Scott administration, the Legislature, the UVM network, OneCare Vermont, the hospital association, Vermont Blue Cross, the state auditor, the Health Care Advocate, the business community, the federal government’s Medicare apparatus, and the press.

   Finally, in a departure for A Vermont Journal, I’ll publish any comments from my tiny corps of brilliant readers that I think make a contribution to the debate. My own views on these matters will be evident, but I am confident that my tiny corps will weigh the evidence carefully and come to their own conclusions.

So, as always, Caveat Lector.

The Right Path for Reform: A Manifesto

by Hamilton E. Davis

   In March of this year, the Covid-19 pandemic dropped a viral curtain over modern life as we have known it. The arrival of the beast coincided with the cresting of President Donald Trump’s campaign to trash American politics, cripple our national government and subvert our notions of honesty, decency and intellectual integrity. There have been myriad effects from these evil winds, but one of the most important has been the loss of focus on the reform of our health care system. That loss affects the whole country, but it has fallen with particular force on Vermont because Vermont has been in the forefront of the reform effort.

    That is unfortunate because the state is on the cusp of what I believe is the single most important policy decision it has ever made—what to do about its hospital system, and more precisely, the system’s small community hospitals. We are a state of just over 600,000 people and we have 14 ½ hospitals delivering care to them at annual cost of more than $2.7 billion. That is billion in case you skipped over it. The half a hospital is Dartmouth-Hitchcock Medical Center (DH) in nearby New Hampshire, which delivers tertiary care to the whole eastern part of the state. Forty percent of its patients are Vermonters.

   The problem is that the regional community hospital system was built for the Vermont of 100 years ago, and it is both medically and financially unsustainable: we just don’t have the money to pay for it. Most of the community hospitals are simply too small to provide 21st century medicine at a full hospital level. Their finances are shaky at best and they are trying to finance the things they should do by doing things that are too complex for them…

   The obvious question is what to do about it, a question that the whole state policy apparatus has been wrestling with one way or another since 1983, and directly since 2012. I believe the reformers need to come up with their answer by mid-September. And in my view there is only one sustainable path forward. Here it is, call it a…

Manifesto

    Vermont needs five fully elaborated hospitals—in Burlington, Lebanon, N.H., Rutland, Central Vermont, and Bennington. Smaller hospitals now operating in St. Albans, Newport, St. Johnsbury, Windsor, Springfield, Randolph, Middlebury, and Morrisville should be stepped down to some level of clinic, whose basis would be strong primary care, a strong emergency room, a few inpatient beds for patients transitioning from hospitals to home,  and possibly maternity services, depending on travel times in their regions. The smallest hospital, Grace Cottage in Townshend, shouldn’t be a hospital at all, a fact known to everyone except the people of Townshend. A right-sized hospital system could save Vermonters hundreds of millions of dollars a year, and its quality would be better. Failure to do so will leave us with an unsustainable medical and financial mess.

   If the solution is that obvious, why don’t we just do it? Glad you asked. Because it’s complicated? Nope, it’s actually hideously complicated. But it’s also essential to the physical and financial health of the entire state, so Vermonters need to step up. I suspect that some of my tiny corps of brilliant readers will help lead the way, whether they agree with me or not.

   The Vermont reform effort was launched in 2012, and has achieved a significant level of success over its eight-year tenure. By using its regulatory power, the Green Mountain Care Board has cut the annual inflation rate in the state’s hospital system in half, saving Vermonters half a billion dollars in the process; and, working together, the state’s hospitals and doctors and the Scott administration have built the infrastructure needed to shift the flow of money through the system from fee-for-service to fixed price contracts. Fixed price contracts are the only reliable route to a high quality, cost efficient and hence sustainable health care delivery system for the 21st century.

   However, every step along that path has been difficult, often tortuous. The initial machinery to control costs in Vermont hospitals was put in place in 1983, and that machinery, strengthened along the way, accomplished nothing much over 30 years; we didn’t get serious until 2013. And shifting to fixed price contracts is incomparably more difficult. Our first execution of that final step took place in 2017, and there has been too-slow, but nonetheless steady progress since.

   The process, however, requires tearing up not just the financing in the health care delivery system, but the culture of medicine itself. Every single doctor and every single hospital has grown up in a medical environment where the more stuff you do, the more money you make. Moreover, the implications of the reform effort reach beyond medicine to the social and political structure of the state. The Vermont project makes perfect financial and medical sense, but it would have very severe social and political consequences. The local hospital is often the biggest employer in town, and the medical and management bigfeet take home huge paychecks by Vermont standards. CEOs get paid $400 to $600,000 a year; an $800,000-a- year surgeon could support a whole town’s Little League program out of petty cash. Vermonters should know, however, that if they continue propping up their failing rural hospitals with the current financing scheme they will be opting for care that is wildly overpriced and of questionable quality.

   That issue has been seething under the surface since the onset of reform, but it is rising to the top this summer. The vehicle carrying it there will be the Green Mountain Care Board’s annual hearings on the hospital budgets for Fiscal Year 2021, which begins Oct. 1. Within that framework, the central question will be whether to require the hospitals to prepare and defend “sustainability” plans. What that means on the ground is that they will have to show that their high revenue service lines garner enough patients per year to ensure that those medical teams do enough cases to meet at least the threshold quality requirements; and that their unit costs make sense. The Green Mountain Care Board wrote that requirement into the budget orders for six of the hospitals last September, and they are considering whether to extend it this year to all hospitals.

      Despite the glaring need to right-size the system, the Vermont hospital association has gone into full-throated opposition mode. In a letter to the Board on March 11 of this year and in testimony on July 15, Jeff Tieman, the president of the association, said that the sustainability effort was a terrible idea. It isn’t needed, he said, it can’t be done, and, in any event represented “regulatory overreach” by the Board. The letter was signed by all the hospital CEOs in the state, including Dr. John Brumsted, the CEO of the UVM health network, and Dr. Steve Leffler, the President of the UVM Medical Center, Vermont’s academic medical center, which delivers half the care in the state. The UVM network also includes Porter Medical Center in Middlebury and Central Vermont Medical Center in Berlin—adding those to the Burlington center runs the UVM dominated portion of Vermont care close to 60 percent.

   Tieman said that the sustainability initiative was doubly unfortunate in the light of the damage that the Covid virus had inflicted on hospital budgets. The reality though is that the sustainability initiative was discussed at length last summer, months before the virus appeared, and the small hospitals were just as hostile to the idea then as they are now. They saw it then, as they see it now, as financial suicide: if they are forced to deliver only care that is very low risk medically and makes financial sense, they won’t be able to stay in business. Of course, many of them are having trouble staying in business, offering every lucrative service line that can draw even a trickle of patients.

   Still, the Tieman broadside appeared to have a strong effect. At its July 15 meeting, the GMCB could have voted to affirm the detailed format for the sustainability push, but Board Chair Kevin Mullin pulled if off the agenda quickly. The Board can’t afford to delay the issue any more though, and they will have to face it at their meeting on Wednesday.

   Even if they vote to go ahead, which I suspect they will, the real test will come in the way the Board steers the individual hospital budgets. And in a very real sense, it isn’t up to just the Board. The whole policy apparatus, including the public at large, will have a voice in the ultimate outcome; and they should make their voices heard. That is how the best public policy gets made.

   It will not escape the notice of my tiny corps that I have made a big bunch of assertions here, but I haven’t actually proved a damn thing. I know, I know. But, hey, it’s a manifesto after all. In any event, there is plenty of evidence available, and I will lay it out to the best of my ability over the next month and a half. A Vermont Journal will follow the process as closely as possible; and while the above has been a panoramic view, I’ll shift now to a very tight focus. The issues will get a vetting in every hospital budget decision. The same analysis needs to be made of the performance of all the major players—the Scott administration, the Legislature, the UVM network, OneCare Vermont, the hospital association, Vermont Blue Cross, the state auditor, the Health Care Advocate, the business community, the federal government’s Medicare apparatus, and the press.

   Finally, in a departure for A Vermont Journal, I’ll publish any comments from my tiny corps of brilliant readers that I think make a contribution to the debate. My own views on these matters will be evident, but I am confident that my tiny corps will weigh the evidence carefully and come to their own conclusions.

So, as always, Caveat Lector.

GMCB St. Albans Decision Telegraphs Reform Issues

by Hamilton E. Davis

   The Green Mountain Care Board last week unanimously denied a request by Northwestern Medical Center for a 14.9-percent rate increase. The decision on the St. Albans facility’s plea was based on the Board’s sharp criticism of both the hospital’s strategic decisions, and the way that the hospital’s case for the request seemed to change over time. The hospital’s response was equally sharp: its spokesperson said that the decision would inflict significant damage to the hospital’s financial status and to its services. He described the Board action as “not responsible.”

   The Board decision increased the heavy financial pressures weighing on Northwestern (NMC), which has lost money the last three years. It also illuminated a range of issues that affected all the community hospitals in Vermont; those issues will come to a head over the next six months as the Vermont delivery system confronts the financial damage from the Covid virus as well as the challenges of the final stages of the health care reform project in the state.  

   According to hospital officials, Northwestern was on track to lose $9.6 million this fiscal year, which ends Sept. 30. The proposed increase would have generated $3.8 million in the remainder of the year, reducing the loss to $5.8 million. The hospital attributed the loss to two major factors. The first was a drop in revenue stemming from the installation of a new electronic medical record system: learning the new system meant that doctors saw fewer patients each day. The second was a roughly four-fold increase in the money needed to pay outside nurses to fill in gaps in the staff.

   It is important to note that the appeal for a higher rate was made before the advent of the Covid crisis, which flared in March. Like all the hospitals, Northwestern incurred large new losses in the wake of Covid, but those cannot be quantified because they are being offset by a direct flow of financial aid to all the hospitals by the federal government.

   The Board’s analysis assumed that the Covid upheaval will be a one-time event while issues generated by the rate increase will drive the hospital’s business model going forward. And that analysis amounted to a powerful indictment of the hospital’s case as well as its performance.

The Case Against the Increase

   The case against the appeal as well as the hospital’s performance was led by two of the five Board members—Jessica Holmes and Maureen Usifer. Over the course of several hours of public discussion, beginning last December, Holmes, Usifer and the other Board members made the following arguments:

• An overarching complaint by the Board was that members didn’t have a clear picture of what was going on at the hospital. In a series of presentations, both oral and written, beginning late last year the hospital officials gave vague or contradictory statements about such critical issues as patient volumes, and the financial implications of the hospital’s business model. Also in general terms, all the Board members commented that it makes no sense to approve a huge rate increase to Northwestern now when the 2021 budgets will be due in July; and the Board can consider the Northwestern issue as part of the systemic problems at all the hospitals.

• A major problem was that the hospital was never clear whether the expenses arising from the electronic medical record were permanent or transitory. If they were transitory, then the money would come back as the staff got more familiar with the system. In that case, it would make no sense to bake those costs into the fee structure going forward. A one-time expense requires a one-time fix, like taking money from the hospital’s cash pool.

• On the last issue, the Board members noted that Northwestern has the second highest level of cash on hand among Vermont hospitals. The median level of that standard financial metric is just under 120 days, whereas Northwestern’s is north of 180 days. The hospital could get the cash equivalent to the rate increase for the current fiscal year by using 15 days of its cash on hand, the Board said, adding that the hospital would still be well over the Vermont median in cash on hand.

• A related issue on the loss of volume was whether the hospital had lost doctors. In the hospital’s written submission in April, officials said they had lost 10 doctors, a quarter of their staff. If that many doctors were gone, then the loss of volume would be permanent and the whole business model would have to be recast. The problem was that in the last hearing, hospital officials said that they didn’t think they had lost that many, possibly just a few. The hospital never came up with an actual number. The loss, they said, was the result of doctors who would normally see, say, 20 patients a day could see only 18 or 19 because they were struggling with the new record system.

• The amount of the increase was huge, bigger than anything the Board had since its inception in 2012. And It wasn’t just the 14.9 percent amendment to the budget—the original budget passed last fall authorized a rate increase of 5.9 percent. Total is 20.8 percent for the fiscal year. The full year cost for the 14.9 ask would have been $9 million; the five month cost would have been $3.7 million. Moreover, the entire tranche of new money would be paid by private sector payers, mainly Vermont Blue Cross—state and federal governments, which pay half the system cost, would pay nothing extra. This feature would exacerbate one of the Board’s perennial concerns: whatever the merits or demerits of any particular line item in the budget, the overall cost of health care was already too expensive for Vermonters to afford.

• One of the most troubling implications of the rate increase was that it would be used to support a fully elaborated Intensive Care Unit (ICU). The hospital now has a few beds in what it calls an ICU, but it said in its appeal that its nursing staff is not currently trained to the level necessary in a unit whose purpose is to manage the most dangerously ill patients. The hospital said it would fill that gap by hiring ICU-trained traveling nurses, reinforced by a telemedicine tie to the ICU at Dartmouth-Hitchcock. The hospital said that it wasn’t denigrating its “tertiary partner,” the University of Vermont’s Medical Center Hospital; but that appeared to be the implication. UVM says that it can accommodate any St. Albans patients that need an ICU. In any event, the Board pointedly questioned why Northwestern would assume the very high costs of an ICU when there was a fully-credentialed unit 30 miles down the Interstate in Burlington.

• The Board also wanted to know whether, in beefing up the capability of the ICU, the hospital had calculated whether it would lose or make money on the unit. The buzzword for that element in accounting land is “contribution to margin.” In English-speaking land that means that if you take the cost of building and running the service, and divide by the number of patients you expect, will you get a unit cost that makes real-world sense. The hospital said that it could calculate contribution to margin, but it didn’t actually do so.

• In its line of inquiry, the Board tied the issue of contribution to margin to the reform project, which in its final stages is facing the question of the long-term structure of the small hospital system. In its budget orders last fall, the Board directed several small hospitals to develop “sustainability” plans to address that issue. In a March letter to the Board, the hospital association mounted a broad-scale attack on the whole Board agenda:

  “It is not currently possible for the majority of our hospitals to accurately calculate a contribution margin on a particular service line. Many factors and assumptions are involved, which differ from hospital to hospital. For example, expenses can be differently allocated across service lines.” The Board said it was interesting and encouraging that NMC could do just that.

• The Board expressed strong disappointment that the hospital’s cost cutting strategy eliminated elements of its population health program, like the community exercise program Rise Vermont that had been a high priority in its list of community priorities, while allocating new money to a sleep program that hadn’t been mentioned on the priority list at all.

• The Board’s questioning reflected obvious impatience at what it saw as a tendency on the part of the hospital to change its narrative and response to questions through the year, beginning with back-and-forths with the Board late last year, and in February and April of this year. A particular sore point, in addition to the loss of doctors, was the issue of the hospital dues to OneCare Vermont. The hospital said some months ago that the roughly one million dollars annual dues was one of the causes of its financial difficulties. The later communications, however, dropped the OneCare issues in favor of the loss of volume in the medical practices and the cost of travelers.

  The Hospital Responds

   The following response was provided by Jonathan Billings, vice president for community relations who worked for the hospital for more than 30 years. I have tried to line up his responses with specific points the Green Mountain Care Board set forth to explain its rejection of the hospital’s request for a 14.9 percent mid-year increase in the rates it charges commercial payers. In no particular order:

• In the overall sense, Billings said the hospital was very disappointed in the Board’s response to its plea for help. Northwestern was one of the earliest and most enthusiastic proponents of the reform project in Vermont, he said. The hospital was the only facility other than the UVM network to join in the capitated risk contracts that are the engine for reform. Billings said the hospital understands that costs need to be constrained, but that the Board needs to decide what services are needed where; and then ensure that those services can be adequately funded. For example, he noted, the Board approved the for-profit surgical center in Colchester that drained off a significant volume of NMC surgeries, which contributed to its losses. He added that NMC will continue to seek a rate increase as part of its sustainability plans in the upcoming hearings for the FY2021 budgets.

• On the issue of the workforce at Northwestern Medical Center (NMC). Billings said that the maximum capacity of the hospital is 43 beds, but that the number of staffed beds runs around 30 to 35, depending on patient flow. That figure is bigger than the eight facilities in the state that are rated Critical Access Hospitals, which are limited to 25, but it still ranks well below not just the UVM Medical Center Hospital in Burlington, but also Rutland and Bennington and Central Vermont in Berlin. It is a very small hospital.

  As to whether NMC changed its story on whether its problems with patient volume came from a loss of staff, Billings said that any given number would be a “snapshot in time”, that doctors come and go, and the effect on volume changes depending on whether the doctors are new and just building practices, or are locum tenens (hired docs to fill a vacancy on a temporary basis) as opposed to well established physicians. The result, however, is clear—reduced revenues.

• On the addition of a sleep disorder service, Billings said that was really not a new service—it was a natural extension of the pulmonology service at the hospital that had been temporarily suspended owing to a doctor retirement.  It made sense, he said, because the new pulmonologist was experienced in sleep issues, and there is a long waiting period for sleep disorder treatment at UVM in Burlington.

• On the Board’s suggestion that the hospital use its large block of cash on hand to make up the $3 million shortfall for the next five months, and resubmit its request in the 2021 budget, which is due on July 1, Billings said NMC will resubmit its request, but that it needs to be prudent about its use of cash to fund losses. The reason, Billings said, was that hospital officials are worried about the trajectory of the number of days of cash on hand, which is an important metric when considering the solvency of a business. A few years ago, Northwestern had 350 days cash on hand, and, given its recent skein of losses, the projection for the current year is around 150 days. If that drops another 15 days, Billings said, the hospital would be getting too close to the 100 days level, which would trigger its bond covenants and eventually threaten its existence.

• On the issue of whether NMC should operate an ICU when there is a fully manned ICU 30 minutes down the Interstate in Burlington, Billings said the hospital believes that its approach to the ICU issue is measured and reasonable. The ICU has four beds. In response to the Board suggestion that they might not need an ICU at all, Billings said that the physicians stratify care according to what they can safely do, and they send worse off patients to Burlington or even Boston in extreme cases. Small numbers of critically-ill patients make it difficult to retain ICU trained nurses, forcing a reliance on travelers, who are more expensive. The telemedicine tie to Dartmouth will help address that shortcoming.

• On the issue of the financial viability of high-intensity service lines, Billings said that his hospital has the cost accounting capacity to test those service lines, and that it does so all the time. A specific example is spine surgery performed by a single member of its orthopedic team for several years; for the past several years, Northwestern has been the only small hospital to carry out spine surgery with a single member of the staff. Billings said that NMC is careful to limit its physicians to things they can competently do. He added that the Green Mountain Care Board is going to weigh in on what service lines a hospital will offer, it will have to decide what it wants the entire small hospital network to look like going forward. If small hospitals aren’t allowed to do medically appropriate services that are financially beneficial, they won’t be able to survive, Billings said.

The Virus Papers, Part 6: Looking Good So Far, but the Horizon is Still Misty

by Hamilton E. Davis

    A Vermont Journal embarked on these Virus Papers less than a month ago on the assumption that my lengthy apprenticeship in health policy might enable me to make a contribution to the process of fending off the Covid-19 threat to our Green Mountain Home. It has been a wild ride, but I think the fundamental issues of epidemic management have been solved. That doesn’t mean the battle is over—it isn’t.

   But it seems time to sum up; to lay out the lessons learned and what the run-out looks like over the next few months, beyond which no one has a clue. So, what did the Virus Papers amount to, and where do we stand now?

   As of the week of April 20, Governor Phil Scott, to use his own metaphor, is opening the spigot a quarter turn at a time—permitting operations by such relatively manageable categories as small construction crews, lawyers, and accountants. The Scott team has wrapped this move in a blanket of exhortations to Vermonters to maintain their vigilance by social distancing, wearing masks and the like. The Scotties are terrified (not too strong a word) by the risk that lifting the pressure on the brakes too early will generate a resurgence of the virus. That worry is justified, since we don’t fully understand the virus itself, let alone how to manage into the summer and fall.

   Still, it seems clear to me that the Scotties have a pretty fat margin of error. The original yield from the epidemiological model was a trio of curves denoting the unconstrained progress of the virus (catastrophic), most likely scenario (manageable by the health care system), and best case scenario (matching South Korea, which would be out of reach). In fact, it now appears that we are on a track (535) below the best-case scenario.

   I say appears because the state reporting on the output of our own epi model has shifted away from the backside of the curve and the run-out, which would show where the new hospitalization for new cases approaches zero. The actual data is obviously valuable, but so are the projections of the model; if they are not, we shouldn’t be paying for the damn thing. (We are already in the zone where we are spending money we don’t have). I would be willing to bet that the model shows a statistical return to normal--zero or very near zero on the x-axis for the key metrics--by June 1. (more about this below)

   Moreover, the actual data still conflates the presence of the virus in totally contained populations like the inmates of state prisons and nursing homes and the general public. That is ridiculous. The prison inmates are obviously highly vulnerable because they are closely packed in, but they aren’t going anywhere because they are being guarded, literally, by people with guns. The situation with nursing homes is equally clear. So why isn’t the real-world data available to the public? Speaking of which, why has Mike Pieciak, the Commissioner of the Department of Financial Regulation and the chief wrangler of the epi model, been absent from the trice weekly press conferences?

   None of this means that Scott should exceed his very cautious “quarter turn of the spigot at a time” approach, but the fact is that we cannot avoid some risk in getting our state economy back in action. And the Scott team, which obviously has the run-out curves from the model, should share them with Vermonters. The Scott team has been doing a good job, but it is the people of the state who are doing a lot of the heavy lifting every day and they should be partners with the Scotties in the effort. The Scotties are sharing some of the output curves from its model, but not the model itself.

   The relevance of this distinction can be seen in the two figures below. The first shows what seems to me the most informative curve from the Department of Financial Regulation web site. It shows hospital beds occupied by Covid patients trending toward low single digits over the next several weeks. That is the dashboard reading available to the Governor as he contemplates the next quarter turn of the spigot.

   At least part of the risk, however, could be found in Wednesday’s New York Times, which compared the output of several models in use across the country. They included epi versions from MIT, Columbia University, lmperial College (London) and Northeastern University. Our model is Northeastern, and to the inexpert eye (mine) it looks like our model is the most optimistic one in use. Someone should ask Mike Pieciak whether he is concerned about that. The Times survey is national, however, and the actual data from Vermont looks every bit as optimistic as the model is showing…still, worth thinking about.

Credit: New York Times “What 5 Coronavirus Models Say the Next Month Will Look Like” 4/22/20

Further Reflections

• Re: contact tracing: It has been a winding path, but we now have a clear picture of where we stand on the one of the most critical tools available to the virus managers. In full-on contact tracing, you interview anybody who has the Covid disease about anyone they have had recent contact with.

  And then, you test those contacts, all of them.

  That is how the South Koreans stopped the virus in its tracks, and it is what Germany is doing now. In a recent press conference Dr. Mark Levine, the health commissioner, said that in the Vermont effort, they interview the contacts and then recommend that those people self-quarantine for 14 days. That is a good thing, and a clear advance on the pre-tracing situation, but it is not full-on contact tracing.

  The obvious hole in the donut is the asymptomatic carrier, not to mention the inevitable leakage in self-quarantining: “Well, I had to get some milk and my car is out of gas…” The asymptomatic carrier is the core of the core of the problem going forward. In a recent report, The New York Times said the reason the federal Centers for Disease Control shifted its position on the wearing of masks by the public was the asymptomatic carrier. The problem, of course, is that testing all the contacts would require a dramatic increase in the use of the testing reagent, which Vermont doesn’t have. New York Governor Andrew Cuomo made the point last Friday: “You have to develop a testing capacity that does not now exist.”  So, Vermont is doing the best it can with what it has available. But, contra Doctor Levine, it is not full contact tracing, and, contra Mike Smith, the testing program is not “robust.” Were it so…

• The Dartmouth-Hitchcock conundrum: When the Scotties first laid out the medical capacity available to deal with the virus, they toted up the number of hospital beds available, the number of ICUs and the number of ventilators. They did not, however, include the resources potentially available at Dartmouth, which is just across the Connecticut River in New Hampshire. There were two reasons for that. One was uncertainty about whether the State of New Hampshire, in the face of an emergency, might force D-H to limit their capacity to New Hampshire residents. A second, I believe, was that the Scotties were trying to build in all the redundancy and fat margin capacity they could to aid both in the management of the virus, and the state of public morale in Vermont.

  Now that we are on the downhill side of the curve, it is critical that the Scotties figure out and regularize the role of D-H in the Vermont delivery system. The whole eastern part of the state, and a not insignificant part of the rest of the state, utilizes D-H, mostly for high end, tertiary services. Forty percent of Dartmouth’s patient traffic consists of Vermonters. Yet, we know almost nothing about it. That is a hole in the management of the health reform project; but it is also a vital element in post-virus planning. To that end, we need to see and understand the flow of Covid patients into D-H over the last month. How many Vermonters went there for Covid treatment? Was it stratified—that is, did more serious patients bypass local hospitals in Vermont to get to D-H? What was the D-H ventilator capacity, and what percentage of that was used by Vermont patients.? ICUs used?

• A related issue: We’ve had relatively little actual medical reporting on the virus. There has been some of that nationally, but it was thin there also. The disease attacks the lungs, but in an idiosyncratic way. And it’s tricky—it can also affect other organs; a victim may need kidney dialysis, for example, and it apparently can cause heart problems. And sneaky: I have seen stories about patients failing to understand the seriousness of their symptoms because the oxygen levels in their blood had dropped, without other symptoms being evident.

  We haven’t seen what percentage of confirmed cases need a ventilator; and it would be good to understand the qualitative outcome for ventilator patients. The national press and the web have carried stories about patients surviving the ventilator, but at a catastrophic cost in quality of life.

• Government: To an unusual degree, the Covid crisis has given Vermonters an intimate view of their own state government. That sense was amplified when the Vermont State College debacle broke into public view a few days ago…So, my general view is that Phil Scott has done an excellent job steering the ship through the virus challenge; I think the same is true of his team, not withstanding my caveats about whether the Scotties could bring their game up even more.

  On a longer reach, however, I think that the combination of the virus management with the uproar about closing the two northern state colleges has illuminated a pattern in the performance of Phil Scott as Governor. In brief, it looks like this: Scott’s performance differs markedly depending on the type of problem he has to confront. On clear-cut, dramatic public issues, like the virus and the earlier problem about the threat of a possible shooting in a Vermont school, Scott stands right up—calm, firm, strong, gutsy. His performance on the guns issue was striking: he abandoned an earlier hands-off posture, advocated an important gun control, and then went out on the state house entrance to sign the bill, facing a very hostile crowd of gun advocates.

  On the other hand, Scott’s reaction to the state college was the kind of mushy, evasive posture that marked his performance on earlier dust-ups, like his battle with the legislature over health insurance for school teachers. In the current state college issue, Scott said he didn’t support the proposal by Jeb Spaulding to close three northern institutions, but that he didn’t have any proposal of his own. The governor got a break in the form of a very short public notice on the issue by Spaulding, but that was just luck. A three-day notice. The horror!

  In fact, it wasn’t a three-day notice; it was a three-year notice. The state college mess has been building for years; 25 years ago the faculty got paid less than high school teachers. So, even before the virus took over center stage, the Governor and his team had to know that the fiscal crisis for the colleges was cresting; and that nobody in town had any answer to it. The brute force answer: levy the taxes necessary to pay to keep the northern colleges running in a collapsing educational market. Scott contemplates that the way he would blowing a head gasket and all four tires when driving his race car at Thunder Road. Of course the usual subjects in the legislature went into full on hyper-ventilating mode…puffing themselves up, calling in the cameras.

  The reality, however, is that nobody has the faintest clue how to make the state colleges dilemma go away, and after wasting a lot of time, and probably a lot of money, they’ll end up pretty close to the Spaulding plan. The lone note of sanity that I’ve seen was a comment to VTDigger by State Sen. Philip Baruth of Chittenden County:

  “If anybody believes that we’re going to move this decision into the Legislature to vote to keep these campuses open and get away without a price tag of hundreds of millions of dollars you’re kidding yourself,” Baruth said.

  The broader point is that Vermont lacks the capacity to deal with truly complex problems, like a declining rural population, the attendant drain on elementary and secondary education, the need to recast the community hospital system, the lack of modern telecommunications in rural areas, and, of course, the state colleges. On all of these hairballs, neither the Governor nor the Legislature has any idea what to do.

  It used to be at least somewhat different. Governors used to have a fully staffed planning office to develop solutions to difficult problems, and very serious people worked there…that all gone now. As for the Legislature, it is amateur hour. The members are part-time, and they have no staff. The leadership of the House and Senate each have an assistant or two; and there is a small Joint Fiscal Office group that mainly serves the interest of the most powerful legislator. There can be very strong players in the various departments, but at the upper reaches of the executive there is no credible policy making expertise, especially on issues that cross department lines. Something to ponder.

• Variation on a theme:

  As we have seen in the past (I won’t bother with any more links), failures by the press can be extremely troublesome. In my last post, I cited the claim by Joe Woodin, the CEO of Copley Hospital, that the antibody test he was running on his staff was a “breakthrough, a game changer.” This claim was amplified by worshipful coverage in VTDigger. Others may be tempted to make the same claim. They may want to consider the warnings published over the last week or so.

  From the Washington Post, April 19:

  “Testing experts warn the risks of inaccurate testing are high. A wrong result could, for example, indicate individuals have immunity against the virus when they don’t, potentially resulting in behavior that would endanger themselves and their families…Even for high quality tests, scientists say, they don’t know the level of antibodies to make someone immune from the virus or how long the protection might last.”

  From The New York Times:

  In a story about the dangers and misuse of the antibody tests, the Times story said the little federal guidance on the use of antibody testing “is so confusing that health care providers are administering certain tests unaware they may not be authorized to do so. Some are misusing antibody tests results to diagnose the disease, not realizing they can miss the early stages of infection.

  “People don’t understand how dangerous this test is,” said Michael T. Osterholm, an infectious disease expert at the University of Minnesota. “We sacrificed quality for speed, and in the end, when it’s peoples lives that are hanging in the balance, safety has to take precedence over speed.”

So, what do we still need to know? Probably a lot of things, but there are a few things that should be easy. They include the record of hospitalization of Covid patients by hospital, not just county; that information will be critical to health care reform going forward. And Mike Pieciak should disclose the inside of the black box of the Northeastern epi model. And given the very strong likelihood that both Dartmouth and UVM are running their own models (they couldn’t train infectious disease doctors or epidemiologists or virology specialists without them) the Scotties ought to disclose those also.

The Virus Papers, Part 5: Cognitive Dissonance for the Covid Era

by Hamilton E. Davis 

   As we transition from the winter of our discontent to our spring of who-the-hell-knows, A Vermont Journal thinks that we are at an inflection point in the arc of Covid-19’s passage through our Green Mountain home. We have been hunkered down for a couple of weeks now with the expectation that the “surge” will be upon right about now. And that’s what it looks like. In fact, the surge may be over.

   The trace of both total cases and new cases per day are flattening, and I will argue below that for the general population, as opposed to potential hot spots like prisons and nursing homes and aircraft carriers, we may well already be on the backside, the downhill side, of the epidemiological curve. Of course, even if that supposition is reasonable it does not support a letup in our defensive posture; I believe that Governor Phil Scott did the right thing in extending the shutdown for another full month. Still the numbers are the numbers and they look very encouraging to me.

   In any event, it seems like a good time to assess the performance of the Scott administration’s Covid team over the period of the epidemic in Vermont. That process will get my tiny corps of brilliant readers to the dissonance part.

   On the front end, I believe that the Scotties have done very well to date. The team is led by the Governor himself, who has done a terrific job. He has assembled a strong team, and led it well: he has been calm but firm in outlining his strategy and candid about the difficulties ahead.  An important piece of evidence for that is the response of Vermonters themselves, whose voluntary acceptance of the Scott regimen has not just moderated the growth of the virus, but has driven it well below the ‘most likely” track generated by the epi model. By my rough calculation, the “reality” track moved half the distance down to the “best case scenario,” which is defined basically by the performance of South Korea. South Korea has established itself as the gold standard for democratic countries in the Covid management biz.

   The day-to-day management of the Vermont response has been led by a troika made up of Mike Smith, the Secretary of the Agency of Human Services; Mike Pieciak, the Commissioner of the Department of Financial Regulation; and Dr. Mark Levine, the Commissioner of the Department of Health. The Commissioner of Public Safety, Michael Schirling, weighs in when needed.

    The Scott team holds a press conference every couple of days. Smith plays a dual role in these efforts. In general terms, he speaks for the Governor and the whole administration; he tends to elaborate on and pound home the Governor’s message about the need for vigilance—social distancing, closing down all but essential activities. He also speaks specifically to any problem in the prison system, of which there have been many. Corrections is a part of the AHS portfolio. He also plays a role in the regulation of nursing homes. And Smith acts as quarterback, handing off some questions to Levine or Pieciak.

   Mike Pieciak, the DFR commissioner, pretty much owns the whole technical side—the state’s modeling of the virus effects—as well as the data that moves every day, the total number of cases, the number of new cases, etc. Pieciak, not as well known to the public, speaks quietly, but radiates a steady sense of competence. His agility with the numbers comports with his day job, which includes regulating the insurance industry. That process involves the efforts of actuaries, who forecast the movement of the kind of numbers that lie at the center of the virus models.

   Mark Levine, MD, the health commissioner, actually also works for Smith as AHS boss, but he has an outsized role by virtue of the fact that he is a doctor. All the other players, including the Governor himself, tend to defer to Levin for that reason. My conversations with a variety of policy players over the last month or so reflect a consensus that Levine has played well; he has developed a valuable amount of political capital in the process. 

Sounds Good, Where’s the Dissonance?

   A preliminary note:

   The work the Scott team is doing is really, really hard. Nobody on the Scott team, and nobody off it for that matter, has done anything quite like this before. The team members have to juggle three balls at once. They have to decide, in the face of great uncertainty, just what to do next.  Then, they have to communicate it by providing the public with adequate, credible information. And they have to avoid scaring the bejesus out of the public in the process.

   If my tiny corps will forgive a sports metaphor, you can watch 10,000 basketball, football or hockey games and not have the faintest notion what it’s like to actually play in one of those games. In the game underway now, anybody not actually playing is a member of the peanut gallery. And modesty, humility and empathy become peanuts…still, the peanuts have their role. Hence:

   The Scotties have played well, but I think they can play somewhat better; and, moreover, I think they need to because there is a second wave coming. The second wave is already guaranteed and it’s huge—not the virus, the cost of the virus. More about that later. First, playing better:

• The most difficult challenge once we are able to keep people alive is how to restart our economy. Scott has talked about that several times, but in generalities. It won’t be all at once, he says. “We’ll turn on the spigot slowly, a quarter turn at a time.” We can do different industries and different regions at different times…

  That all sounds good, but actually doing it will be really tricky, and will require a very sensitive reading of the epidemical curve. The Scotties may have such a reading, but they are not sharing it with the folks anywhere clearly enough. Most of the data they are pumping out stops each day. The only data is actual data. But the whole reason to have an epi curve in the first place is to get the best possible fix on where the system is going. It costs serious money to build the epi model and then refine it as the data flows in. Not many people will care enough about the track and fewer will be able to assess it; but that number is not zero.

  The peanut gallery needs humility, but so does the Scott team. As a practical matter, there are people in Vermont, a not insignificant number among them members of my tiny corps of brilliant readers, who know more about epidemiology than Mike Pieciak, more about medicine and biology than Mark Levine, and more about how to run a state than Mike Smith. It would be very smart of Phil Scott to make sure that his team guards against exuding a sense of—don’t worry your little heads about these technical complexities, we’re the experts, you can trust us. If you want to see an example of a guy doing it right, check out New York Governor Andrew Cuomo’s performance. It’s really good.

  So, I believe, and some people who understand these issues better than I do believe, that we are already on the backside of the curve. Are we wrong? Possibly. But let’s see the full run-out of the model.

• A further modification to the model that seems obviously necessary to me is to split the rate of new cases into two categories, the first from obvious hot spots like prisons and nursing homes, and the second from the general population. A particular marker came about a week ago, on April 10. The new cases for that day showed an increase of 33 in Franklin County. The other 13 counties showed no new cases at all. I believe that all or most of those 33 came from a state prison in St. Albans.

  It seems obvious that the management of nursing home residents and prisoners is very different from managing the virus that lives in the general population. Prisoners and nursing home residents don’t generally have to go to work, shop for food, go out to the movies, or drive to Boston to see the grandkids.

  Managing the virus inside prisons and nursing homes is obviously difficult, but the job is perfectly within the capability of Mike Smith and his AHS team, and we ought to leave it to them. The central issue to reopening the economy is the general population, and Mike Pieciak ought to let us all see what the runout curve looks like when the confined populations have been stripped out.

• Virtually every action taken, and every word spoken on health care over the last month has been tightly focused on defense against the virus. No attention has been paid over that time to the health care reform project that has occupied a major swath of state government since 2011, and which was entering its critical stage when the virus intruded.

  That issue needs to move back to center stage now, for a very good reason: the finances of Vermont’s hospitals, as well as much of the broader health care delivery system, have collapsed. The federal government is providing an infusion of money to help. Some of that money is in the form of loans to hospitals, the remainder is in the form of outright grants. It isn’t clear the extent to which Vermont state government has any voice in how the money is split up among the various facilities.

  The importance of that issue lies in the way the onset of the virus coincided with the final phase of the state’s health care reform project. The core of the reform project—the last big step needed for full maturation of the project—lies in the recasting of the state’s small community hospitals. That effort has been manifested in the Green Mountain Care Board’s orders to a half dozen smaller hospitals to produce a “sustainability” plan in conjunction with their FY 2021 budget submissions. The common problems they faced—pre-virus—included falling patient traffic, expenses rising faster than revenues, and negative bottom lines, year after year.

  Just shoveling money into that system with no clue whether the recipient hospital’s business model makes sense medically or financially will be to just waste it. And by next fall, when the virus is reasonably under control, the financial tsunami will be devastating not just for the hospital system, but Vermont state government itself. Every taxpayer dollar, state or federal, needs to be spent as wisely as possible because the surest thing in the current situation is that there won’t be enough of them. The Scotties need to be thinking about that now. And they need to begin preparing the public to think about those issues also, because the public’s money is what they are playing with. A suggestion to Mike Pieciak: we will need to see a day-to-day listing of the Covid patient loads not just by county, but by hospital. Trust me, that data will be crucial when we hit the Class 6 white water that lies just downstream. Thanks.

• I think that Mark Levine could bring his game up a bit. He’s obviously fully professional and the whole state is riding on his judgments, but I’m uneasy about some of them. In a direct answer to my question a couple of press conferences ago, Levine said that the Scotties were going to begin contact tracing, which is actually now a term of art rather than a general posture. The issue is whom you test for Covid-19, and when. I wrote about this in an earlier post; I called it tracking then, because I hadn’t heard the new term. The idea is that whenever you test somebody and find them infected, you isolate and treat them; but you also talk them and find out who they have had contact with. Then you find and test those people—even if they don’t have symptoms. That is the way you get beyond obvious hot spots like nursing homes, prisons or aircraft carriers; the hard nut to crack is the penetration of the virus into the general population.

  That is how South Korea knocked the virus flat in two months. Their extensive contact tracing took them right into the body of their general population looking for every version of the Covid beast. Their ability to do that depended not just on an aggressive strategy, but on the availability of all the testing reagent they needed. We don’t begin to have that. Real contact tracing in Vermont would require turning half of Shelburne Bay into testing material, which I believe my tiny corps would agree is not likely. When discussing the management of nursing homes and prisons, Mike Smith occasionally uses the term contact tracing to refer to a decision to test everybody in a nursing home if some residents already have the virus. Given the hairball Smith has to deal with every day, I don’t care what he calls it. But the Scotties need people to understand that our defensive toolbox does not include contact tracing. And the guy that ought to explain that clearly is Levine.

  A more serious complaint:

  A short time ago, VTDigger published a report that Joe Woodin, the president of Copley Hospital in Morrisville, had taken a breakthrough step by utilizing a test to determine whether his staff members were carrying antibodies that would render them immune from the Covid virus. The Digger story on this piece was a typically overwrought piece of sloppy journalism, which I’ve dealt with before (see my posts from Oct. 22, Jan. 7, and Feb. 18), and I would have just written it off as such. What jumped out at me, however, were the Digger quotes from Dr. Mark Levine.

  Digger paraphrased Levine as saying he was supportive of the Copley effort, but advised caution in adopting the test more widely.

  “This is an important strategy, and there will be a point during this unprecedented public health event when we will want to [know] if people interacted with the virus – whether they were aware of it or not,” he said in an email. “This would probably be in the deceleration phase of the virus in Vermont (which we have not yet reached).”

  Levine said the state doesn’t yet have the testing materials to roll out serology testing for the population at large, nor does he have confidence in the accuracy of the tests.  With serology tests, “there is a risk of false positives and false negatives which can lead to false reassurance or false alarming,” he argued. 

  I stopped there. If Levine didn’t have confidence in the tests and he understood that the risks of false positives and negatives, then why was he supportive? If Woodin tests one of his staff members and he gets a false positive (the person appears to have antibodies to Covid) that amounts to a get-out-of-jail-free card and the worker is free to go anywhere in the hospital…if the test is wrong, then that worker could turn a hospital into a nursing home: Joe Woodin could spawn his own personal Typhoid Mary. It would be difficult to get more irresponsible than that. There were more typical Digger machinations in the rest of the story. But I couldn’t get by the Levine quotes.

  So, in a subsequent press conference I asked Levine about it—what did he think of the Woodin caper? Lo and behold, he was still supportive. I didn’t tape his answer, but I understood him to say he didn’t have a problem with the Copley move, it involved small numbers and we might learn something from it. OMG!

  I then did what I usually do when confronted with something like this: I called around to some of the industrial strength docs that I have known for years, and they were amazed at Levine’s posture on Copley. “Bad idea” was the consensus. Those conversations were private, so I won’t name them here. But if my tiny corps is concerned that my view is not that of a doctor, which they should be, I offer this recent interview in the Washington Post with Eric Topol, a cardiologist and geneticist at the Scripps Translational Institute at LaJolla, Calif. 

  “The antibody test is challenging because there is (considerable) cross-reactivity between Covid-19 and four other coronaviruses, some of which cause common colds. Moreover, antibodies may or may not protect a person from spreading the virus or getting a second infection, and we have no idea how long they last.” Sounds like Topol and Levine read the prospects for the serology tests the same way.

  It sounds to me as though Levine agrees on the science with Topol, and many others whose views flood the web. Which makes the Health Commissioner’s imprimatur questionable at best.

  Phil Scott and his quarterback might think about that.

The Virus Papers, Part 4: Scott Administration Takes Aim at the Best Case Scenario

by Hamilton E. Davis 

    A kind of miasma is hanging over Vermont as this is being written on Sunday afternoon. We’ve been pretty much locked down for a couple of weeks now, which actually feels like a couple of months. Many of the lockees have little to do but stew about the coming surge, expected over the next couple of weeks, and worry on a longer reach about when we can get to a more normal place. A tsunami of information from the web is washing over us, but we somehow don’t feel that we know very much.

   In fact, however, there is a lot of movement under the surface. One of the most important developments, entirely unremarked as far as I know, is that Vermont state government has embarked on an effort to move its virus management strategy closer to that elusive target—the best case scenario. The vehicle for that effort is something called “contact tracing,” which I described in an earlier Virus Paper as “tracking.” Contact tracing is the policy scalpel South Korea used to carve the virus right out of the guts of their country.

   The idea is simple enough, although the execution is fraught. It works like this: when a person gets the virus you isolate and treat him or her. But then, you interview that patient to determine who he or she has been in contact with in the previous couple of weeks. Then you seek out and test each one of those contacts. If there are 15 and three of those tests positive—with or without symptoms—you isolate them and treat them till they test negative; meanwhile you interview the three positives to determine whether they have the virus and repeat the whole process.

   Managing the virus across the state like this amounts to a huge effort, but it enabled China and South Korea to stop the beast in its tracks. China isn’t a model for us because it is an authoritarian country, but there is nothing to prevent Vermont from following the track laid down by South Korea. The Scott administration has produced a model of how it might work, and the potential benefit if it does, even partially: 

   The top line in red looks like Mt. Philo in Chittenden County, and it’s real scary—it blows right past our medical resources over the next two or three weeks, by a factor of four or five. The capacity in this view of the situation in this graph is shown by the horizontal line labeled 622. Fortunately, we’re not going there. The putative capacity is 622 beds and there are also caps on the available Intensive Care Units and ventilators; there has been some speculation that the latter two caps could be breached. The capacity numbers, however, have a fat margin of error because they do not include any of the resources available at Dartmouth-Hitchcock Medical Center (DH) in nearby New Hampshire. I’ll get to the DH in another Paper, but in normal times 40 percent of DH’s traffic comes from Vermont, and it is unlikely that DH’s management would ignore that…

   In any event, the shallow green curve immediately below the horizontal is the track we are on now; it is the product of a function called an epidemiological curve, and it is dramatically different from the exponential curve that we have been riding on since early March. Over that three-week stretch, the number of confirmed cases were doubling every three days or so. I am working with Easton White, Ph.D, a researcher on biological monitoring at UVM, and White spotted the shift in function on March 27, when the doubling period itself doubled, from just under three days to just under six.

   In Mathland, the early exponential track is well within the capacity of a high school student, but the epi curve is anything but. Even my tiny corps of brilliant readers will be forgiven from taking a pass on that; it will take the corps from high school math, a cinch for them, to the cold mists north of ordinary differential and integral calculus. I have looked at the generic epi formulas; and, trust me, one of those could wreck your whole day. Even the pros, like White and the team of experts now working for the state, aren’t running these calculations on the backs of envelopes—they are dumping their data into computer programs that can do things like evaluate an integral that would make your head hurt.

   Anyway, it’s that middle curve that will control our lives until we get by the virus—specifically, it will tell us when it is safe to begin re-igniting our economy. At this point, the curve shows us getting close to normal by June. However:

   It is absolutely critical to note that not a single point on the green curve is guaranteed past April 2, the day it was published. Vermont’s performance has been solidly within the relatively optimistic range, but that performance depends on continuing the rigorous passive defense we have mounted so far—shutting down human contact as far as possible, closing businesses, etc. If we take our collective foot off the brakes, however, there is nothing to prevent moving the green line in the wrong direction, to the unforgiving red slopes of Mt. Philo.

   The sermon for today though is about a cautious reason for real optimism, the potential to move the what’s-actually-happening green line to the lower blue line, the best case scenario. The full potential of such a move can be seen in the numbers listed on the two lines. At the peak, the green curve shows us needing 521 hospital beds. The blue curve at the same time shows us needing just 170, a three-fold improvement. And the slope of the blue line moves asymptotically to normal quite rapidly. Just looking at that curve evokes for me the recent headline on a New York Times piece by Maureen Dowd, “Let’s ‘Kick Corona Virus’s Ass’.”

Can Vermont Actually Do That?

   Well, the Scotties are taking a shot at it, to their great credit. The story of the American response to the virus is a chronicle of blundering and mismanagement, from the patent absurdities coming daily out of Washington to the buffoonish maunderings of the nitwit governor of Florida. So, Vermont is punching well over its weight on the Covid challenge, but that doesn’t guarantee anything—just escaping a train wreck will be hard enough.

   In fact, I was flabbergasted that they are trying. I asked the Covid team about it in a recent press conference and I thought it was pretty much a throw-away question. I swim in the ocean of crap that floods the web every day and I had seen no sign of tracking in other states.  But the Scott team jumped right on it.

   “Yes,” said Health Commissioner Mark Levine, without hesitation. (paraphrasing  slightly.) “We are working on it now.”

   I asked the obvious questions—can you do enough testing, and do you have the people necessary to do the interviewing?

   Levine didn’t say yes exactly to either one, but the replies amounted in my view to a real effort. The state has considerably more testing reagent than it had earlier, Levine said, which means that it can go well beyond the earlier constraints that led to testing only people who had all the symptoms. Okay, that’s good. How good? Good enough apparently to begin testing non-obvious people, based on the interviewing of people with confirmed cases. That allows the managers to get deep into the sizeable potential that exists in the whole population. How deep? Impossible to say, but it’s reasonable to expect some inflection of the green line in the direction of the blue.

   In fact, a few days later came what looked like a spike—I think it was 70 some new cases in one day. That was almost certainly an artifact of increased testing, rather than a movement back toward exponential increase. And I found it noteworthy that the World Health Organization (WHO) had recommend a 90 percent cold rate for testing: If you test 100 people and get more than 10 positives you aren’t testing enough. My calculations are that in recent days, the Vermont rate has been right around 10 percent, pretty much on the WHO target.  In any event, Levine sounded determined to ramp up testing significantly. The testing isn’t that hard, however; you just need reagent—testing kits in the earlier vernacular. But the second half of contact tracing seemed intractable to me—who would do all that seeking out of exposed individuals, the interviewing.

   Levine didn’t even slow down for that. The work would be done by personnel from  the Department of Public Safety, AKA the Vermont State Police.  Levine, I think, said they had 40 cops ready to go. (You can’t easily check anything in Lockdown Land). OK, perfect. Crime and traffic should be down, and state cops could basically do what they always do—go out and talk to people and find stuff out. They can worry less about burglaries and guys testing out the Porsche at 140 on I-89 east of Brookfield, and more about who is walking around undetected infecting other Vermonters.

   Will it work? Nobody can say for sure, including the Scotties team. But it’s a gutsy effort, and every Vermonter ought to wish them well. They deserve it. And every increment that the green line can be leveraged in the direction of the blue will redound to the benefit of the whole state.

   I am recommending that every one of my tiny corps of brilliant readers go out on his or her front porch and launch a cheer into the clear air in favor of contact tracing. It’s the most hopeful tactic we have.

The Virus Papers, Part 3: Duck and Cover, or a Punch in the Nose

by Hamilton Davis 

   It’s a bit embarrassing to admit that I had trouble taking seriously some of the injunctions from experts about how to cope with the virus. Don’t get close to people and sneeze virus droplets all over them! I was okay with that—made perfect sense. What frankly didn’t make sense to me was the constant yammering about washing your hands. Of course, people need to wash their hands, as well as brush their teeth, and change their sheets every couple of months. But this Covid beast has driven the whole world to its collective knees, and you’re telling me we can stop it with hand washing. Really?

   It evoked for me the early 1950s, when elementary school teachers all over the country were drilling their second, third and fourth graders to “duck and cover, ” to dive under their little wooden desks and hold their heads to protect themselves against an atomic bomb attack. I was in high school in the early 1950s, and I have no memory of that particular idiocy at all—any high school teacher who tried it would have sacrificed any credibility he or she had.

   But those little kids were hitting the deck on every signal. The one enduring lesson they might have taken away would have been an early appreciation of how ridiculous adults could be if they were terrified of the trip to instant oblivion promised by a nuclear war between the U.S. and the Soviet Union.

   Anyway, I sort of washed my hands a little more than usual, although I could never get into any of the singing songs as a mnemonic for how long the process should take; and I never even considered stuff like training myself not to touch my face, which some serious people I knew were doing. What the hell, I thought, maybe if I get it I’ll survive it…

   This minor league irresponsibility lasted until a week or so ago, when I read an amazing piece in the London Review of Books, one of my favorite sources of very high quality, idiosyncratic journalism, for which the Brits are justifiably famous. The Brits can really write, like the French can really cook. The author of this essay enabled me to actually envision the virus as a perfectly familiar archetype, the schoolyard bully, big, strong, nasty and potentially dangerous, but with real weaknesses. The best way for ordinary kids to survive the schoolyard is to understand weaknesses.

   The essay was written by Rupert Beale, a researcher at the spectacularly-credentialed Francis Crick Institute in London. Beale’s specialty is teasing out the pathways by which viruses, particularly corona viruses, invade and take over mammal cells. So the Covid-19 beast looming over us now is right in his wheelhouse. Much of the piece is a fast-paced overview of the current world state of the Covid battle, coupled with a pretty dense primer on the biology and genetics of viruses. Beale doesn’t dumb down the science, and even though he is as good writer on the subject as you are likely to find, it’s easy to get lost in the interplay of DNA and RNA molecules in the dance. In fact, your faithful correspondent was a wallflower at that dance, and a quick Googlized tour through the genetics didn’t help much. Those of my tiny corps who lack background in propeller-head biology and genetics will have to invest an afternoon to figure it out.

   What did jump out at me and set me off on my schoolyard metaphor was Beale’s description of the virus itself, with a focus on its size. He introduces his piece by recounting his introduction to coronaviruses 20 years ago. Coronaviruses are RNA viruses.

   “Their special cunning” Beale writes, “is in the huge length of their RNA genome. RNA is much less stable than DNA, so RNA viruses tend to be short. We measure them approximately in kilobases (kb) of information. Polio is a mere 7 kb, influenza stacks up at 14, (Covid-1) is 30 kb.” That is close to the limit of information for RNA, he adds, “about as long as a strand of RNA can be without collapsing.” Okay, so there we have really big size, but I am reading “close to collapse” as weakness.

   Beale confirms that toward the end of the piece.

   “For all its huge genome and clever tricks,” Beale writes, “(COVID-19) has significant vulnerabilities. It has a fairly feeble fatty envelope, which it needs to sneak into cells.” Then Beale came right at me:

 That’s destroyed by soap, and by alcohol—so washing your hands carefully or smearing them in alcohol hand gel will kill the virus…expect to be bored to tears over the coming months by pious injunctions to wash your hands. It doesn’t seem like much, but it’s going to reduce the risk at least somewhat.

   OMG! Who knew? We’re going to have to learn to love pious injunctions. As an aid, I am choosing to think of hand washing as a punch in the bully’s “fairly feeble fatty” nose, the last resort for an ordinary kid when the big guy’s got his mitts on you.

   If that new mindset doesn’t work for you, however, Beale offers you a second mental refuge. Here it is, in full:

   The second great vulnerability of the virus is that it has to take great pains copying its genome. All RNA viruses (influenza, for example) have a special enzyme that copies RNA into RNA. These RNA-dependent RNA polymerases are usually very sloppy copyists. They don’t bother with proofreading, and make huge numbers of errors. This high mutation rate enables them to evolve very rapidly; that’s one reason we need a new flu vaccine every year. Coronaviruses (one type of RNA virus) have to be much more careful, or else their huge genome will accumulate too many errors. Their mutation rate is therefore lower, so we may be to develop a fairly effective vaccine—though it will take a year or two, assuming it’s possible at all.

   I read that last sentence as a marginally hopeful augury—its huge size reduces its mutability. But as for the rest of it, I have no clue at all. If any of my tiny corps of brilliant readers can render it in English, send it to me. I’ll share it with the rest of the corps. We could even send it to Phil Scott and his friends and the denizens of the Legislature.

The Virus Papers, Part 2: Is the Best Offense a Good Defense?

by Hamilton E. Davis

   Things to cogitate on in Green Mountain Lockdown: none of us has ever experienced anything like this before, and it’s interesting to wonder what we will learn from it, as individuals and as a society. Some lessons are obvious already—it’s sub-optimal for example to have a venal and incompetent national government; and it’s likely that we won’t soon forget that it was unwise for federal officials (not the Trumpies) to forget to restock the national supply of surgical masks. Yet, the ambition and reach of the current virus is taking us to places we’ve never been before.

    One of the most important things we all have to figure out is the extent to which we can depend on a passive defense against a dangerous virus. The two countries that hammered the beast into submission in a relatively short time were China and South Korea. They did so using two basic tools—virtually unlimited testing, and aggressive tracking. The formula: test everybody you possibly can. When you find an infected person, isolate him or her, and then interview that person to find out others with whom the infectee has been in contact. Then test those people and carry out the drill all over again. What it amounts to is chasing down every edition of the virus and starving it of new hosts. That is an active defense.

   It will be argued, of course, that China cannot be a model for the United States because of its brutal social and political control, and its indifference to suffering on the part of its people. South Korea, however, is a democratic society, and the active defense there seems to have worked. At a minimum, the South Koreans flattened the virus curve far better than any western country, including Italy, Germany, the UK and the United States. Could we emulate the South Koreans?

   There is certainly no intrinsic barrier to getting enough testing material. Our failure to accomplish that was simple incompetence, which can be corrected. We will pass at least two generations before we make an error that stupid again. A much harder question is actively tracking each individual virus through the population. We would have to do so without sacrificing individual liberties; and even assuming we could devise an acceptable algorithm in that regard, it is hard to imagine the human tracking machinery necessary to follow the winding path each individual virus takes through a population of more than 300 million people.

   Still, it shouldn’t be impossible. And for those who would bemoan its cost and complexity, I would suggest: Take a look around. The virus has blown our economy to smithereens. We’re all sitting around in lock-down, our businesses, our educations, our lives on hold. Those of us not on lock-down are tearing around trying to keep us alive and risking their health in the process. The total cost is already in the trillions of dollars, and we haven’t hit bottom yet, the narcissistic fantasies of Donald Trump to the contrary notwithstanding.

   The other side of that conundrum is the final accounting we will have to make of the efficacy of our passive defense. We have implemented what feels like draconian steps to limit individual contact and hence the speed of virus movement through the population. It is a serious question whether those steps were taken soon enough, but they are clearly here now—there’s no evidence yet, however, that they have shifted the doubling curve. In my first Virus paper, I showed the raw data for the increase in infected patients, starting with the first couple of cases and topping out at 75. When plotted on a graph, the trajectory was exponential, which means that the numbers were doubling over some period—a day, two days, three days, a week…when those data were graphed by the logarithms of the raw data, they fell into a straight line on a doubling rate of three days. Easton White, a research associate at the University of Vermont has updated the graph of the raw data, and logarithmic treatment that shows the doubling interval.

   The number of Vermont cases as of Thursday morning was 123, which is still roughly on the three-day trend, so there is not as yet any indication that our passive defenses have bent the curve downward.

    A significant problem with these data is that there is no way to tell whether the daily progression of the numbers is being driven by the testing pattern, or by the increase in the absolute number of cases—or both. In Mathland, the problem is there is no “counterfactual,” which means that we have no way to tell what the rate of increase would be if we weren’t reacting to the virus at all. Italy has sent a strong message that we would be much worse off, but “worse” is not a number.

   In the last 24 hours, Gov. Andrew Cuomo of New York has said he thinks that the rate of increase of new cases in his state, principally in New York City, is easing a little, which could imply that the passive defenses are beginning to bite. But it is too early to draw any firm conclusions on that yet. In Vermont, we’re still exponential. The first optimistic sign here will be a marked increase in the doubling period, to, say, a week or more. But even there, it will take some time to wash out the counterfactual problem.

   When the waters finally recede, we will be able to tote up the cost and efficacy of the passive defense. We can consider then whether we should build an active defense capability, which will be a fascinating policy discussion, in Vermont and the rest of the country. Think about it, for most of us there’s not much else to do.

The Virus Papers, Part 1: The Coming Surge is Just Too Big

by Hamilton E. Davis

   The assault on our species by the COVID-19 virus has inspired me to wonder about how my tiny corps of brilliant readers is coping with it, now that its full impact looms over our Green Mountain fastness. I don’t remember how or when I came up with the tiny corps formulation; it seemed at the time like a harmless, tongue-in-cheek acknowledgement that my audience is small. The more I have used it, however, the more it has struck me that my tiny corps isn’t really tongue-in-cheek anymore—it’s still tiny but I’ve come to believe the “brilliant” part. The reaction I get from my readers tells me that they really appreciate efforts at serious journalism. And I suspect that that hunger is the stronger because serious journalism is hard to get, especially in Vermont. Hence, a new formulation—The Virus Papers.

   The fact that the flow of information to the public amounted to pretty thin gruel struck me a week or two ago, and it wasn’t limited to Vermont. I kept reading, in places like the New York Times and Wall Street Journal as well as the usual web suspects, that there “weren’t enough test kits” to determine who had the virus and who didn’t. For several days, it seemed like it was “test kits, test kits, test kits” all the time, set in a context that included huge failures by the Trump administration, turf wars between the Centers for Disease Control and the Federal Trade Commission and a surfeit of political back-and-forth between Democrats and Republicans. It wasn’t difficult to follow the national trends, or the political thrust and parry in Washington, but I was particularly anxious to figure out just where we were in Vermont. 

Where are we on March 24?

As far as Vermont was concerned, I began looking for what seemed to me would be the basic information you would need to figure out what was going on. How many staffed hospital beds do we have? How many ICUs, because the virus attacks the lungs? How many ventilators, for the same reason? And when you mush all of that together, how many beds do we have for very sick people?

   Beyond that, what would the experience of other countries, as well as other states in the United States, tell us about what we could expect in Vermont? And still further beyond, what could we do in Vermont to deflect the beast?

   Until about the middle of last week, it seemed very hard to get what I think is basic information about our armamentarium, number of beds, etc. Governor Phil Scott and other officials were urging people to keep a distance between individuals, avoid crowds, wash their hands. Schools and colleges were sending students home, restaurants and other gathering places were shutting down. But the virus was continuing to build and I still couldn’t get the basics.

   At that point, however, things started to move. Scott held a news conference that I called into and in the wake of the governor’s remarks, Mike Smith, the Secretary of Human Services began answering pointed questions from the press. Like, how many ventilators do we have? Smith just answered it, around 210, which answered one of my questions—would state officials avoid specifics in an effort to avoid scaring the public. Nope, the number was 210, with no sugar coating, even though that number was far below what any surge number of cases would require. The Seven Days weekly magazine carried some of the specifics, albeit without much context; but on Sunday, Mar. 22, VTDigger cobbled together the best picture yet available on what we have available medically to deal with the expected surge of patients over the next few weeks.

   It looks like this:

   961 total hospital beds, 99 intensive care unit (ICU) beds, 210 ventilators

That is the baseline of the capacity that exists in the state. A key question is what percentage of those beds would be available for virus patients. Hospitals can postpone stuff like elective surgery, but they will have to continue to care for patients coming in with routine medical problems—heart attacks, strokes, cancer care, accident victims, and so forth. In a recent press conference, Mike Smith, Secretary of Human Services, said that number was 500 beds. Hospital managers have been planning to open up new spaces for virus beds, but it isn’t clear how much that will help: the ceiling is more the equipment available, like ventilators, and even more importantly the people to deliver the care.

   When you start to put together all the available information it quickly becomes clear that Vermont can’t handle a surge of cases that is not just likely, but virtually certain. Jeff Tieman, the president and CEO of the Vermont hospital association, put it succinctly:

   It is literally not possible to be ready for something at the level we’re facing right now.

   So, what do we know about the virus at this point, and can we foresee when the growth in the number of infected patients will exceed the capacity of our health care system? In looking at this question, I am working with Easton White, Ph.D., a research associate at the University of Vermont. White is a biological modeler whose research specialty is quantifying how populations change over time, including examining the movement of disease through animal groups. “Working with” means I ask him questions and he figures out the answers.  

   As of the end of the day Monday, March 23, the number of infected Vermonters stood at 75. The first Vermont case was reported in early March. The raw data looks like this:

Raw Data

  Date               Cases

2020-03-16            12

2020-03-17            12

2020-03-18            18

2020-03-19            22

2020-03-20            29

2020-03-21            29

2020-03-22            52

2020-03-23            75 

   When you graph that, it falls into the classic mathematical pattern of exponential increase. Exponential increase means simply that the rate of growth is proportional to the population size. If you start with 2-squared, for example, you get 4, 8, 16, 32, 64, 128…an exponential track starts out looking not-too-bad and then goes up really fast after you get out a ways. Here is a graph showing the track of the Vermont data from the table above. It’s exponential, like most if not all of the United States, and the worst-hit countries in other parts of the world.

   A critical question in trying to suss out the impact of the virus trend on Vermont is to determine the doubling interval, the time it takes for the number of cases to double. The longer you can stretch out the doubling interval the better chance the medical system has to deal with the patient load without crashing. The way you get at the doubling interval is to express the raw data in logarithmic form, which converts the track of the raw data to a straight line, whose slope can be measured, and the slope is used to find the doubling interval. Hence: 

   White’s calculations show that the Vermont doubling period is every three days. If we stay on our current track the number of virus victims in the state will blow by Vermont’s hospital capacity sometime in the second week in April. Can that crux point be stretched out, or even suppressed enough that the health care capacity never gets breached?

   The Digger story wanders around quite a bit but read all the quotes: what all those professionals are saying amounts to—we hope so, but we have no idea how. And the few I have talked to believe the chances are slim to none. We all have to be prepared psychologically for the doubters to be right.

N.B. I’ll post some further editions of the Virus Papers over the next few weeks. Coming tomorrow—why we can’t match Korea.

In Digger’s Health Care Reform, No Good Deed Goes Unpunished

by Hamilton E. Davis

   In his January 24 budget address, Gov. Phil Scott took one of his most significant steps in support of the Vermont health care reform project since he took office in 2016. Scott said in his speech he was confident about moving ahead with the project based on reports showing that the state’s hospitals had spent well under the contracted level for 2018 for a piece of the Medicaid population. The providers working under the terms of fixed price contracts performed markedly better than those hospitals and doctors did in the fee-for-service reimbursement system in the past. Every word in Scott’s statement was true, including the punctuation. VTDigger’s response was to call him a liar.

   Digger didn’t use the word liar. Its report said the Scott statement was “Mostly false.” And you can’t check that out because Digger took its report down after three or four hours and replaced it the next day with a new claim that the Scott statement was only half false. What are we to make of this mess?

   The first thing to understand is that the Digger reporting is just as bad now, or worse, than it has been since it began its newest phase last October.  It is also becoming clear that Digger is determined to remain on its current course in reporting on the health care reform project. What is new in the last week or so is that Digger now has an association with PolitiFact, a national organization whose mission is to test the veracity of statements by politicians and public officials. The Digger article is cast within the PolitiFact framework that establishes five categories—True, Mostly True, Half True, Mostly False, False and Pants-on-Fire. You have to wonder about PolitiFact’s due diligence taking Digger into its tent, but that’s a story for another time.  Anyway, let’s look first at the Scott move.

The Significance of the Scott Move

   The Governor said that in 2018 providers working under fixed price contracts spent $7.7 million less than they would have if they had been paid under the fee-for-service system that had been in effect previously. The same under-spend showed up on a much smaller scale in 2017, the pilot year of the reform effort. Scott also said the 2019 figures, which are not yet fully available, are trending in the same direction.

“The challenge,” the Governor said, “is changing the way we pay for something that is 20 percent of our state’s economy without making it harder to access care, adding new costs or reducing quality. For these reasons, many Vermonters are skeptical,” he continued. “I know I was—and still am, somewhat, because we’ve seen firsthand that there’s no quick fix or political promise to make healthcare more affordable. But the early results give me reason to be cautiously optimistic.”

   The Governor didn’t provide much context, and I’m not sure whether he could have without turning a couple dozen sentences into a health policy seminar, which would have taken up the whole budget address and probably several other addresses as well. So, here is what I believe my tiny corps of brilliant readers need to know: the dynamic he was welcoming was limited to the Medicaid population in the state; Medicaid is the only payer now prepared to take advantage of fixed price contracts. Medicare is not there yet, and neither is the private insurance industry, although Vermont Blue Cross is discussing it with OneCare Vermont.

The fixed price contract for Medicaid in 2018 was set at $75 million, and the actual spending was $67.3 million, $7.7 million under that. That number is known because both payers and OneCare Vermont are keeping records of what the fee-for-service payments would have been under the old system—shadow payments is the buzz phrase. The state didn’t save the $7.7 and Scott never said it did.

    The significance in the finding lies in the prospect that future fixed price contracts can come in at savings of 10 to 11 percent, or more, less than fee for service. That savings can amount to several hundred million dollars a year. And that is just a start. Extending the new payment model to Medicare and the private insurance system would save Vermonters billions of dollars out into the future and would constitute the first sustainable delivery system in the United States.

   The barriers still to be overcome, however, are formidable. That fact is what lends added significance to the Scott comments in his budget address. When Scott took office in 2017, he treated health reform like a ticking bomb; it had cost his predecessor, Pete Shumlin, his promising political career and Scott wanted no part of it. Within a year, however, Scott had come to believe that reform could work and he began to lend his support. But quiet support is not the same as political leadership, so it was important that the Governor stepped out from behind the curtain.

   The importance of that cannot be overstated. The progress of reform has been strikingly good, given the intrinsic difficulty of the task. But the political environment has been toxic, with powerful opposition from many quarters, most notably the Vermont Senate; and the opposition has been amplified by the coverage from VTDigger, Vermont’s only active daily press organ.

Fact Checking Digger’s Performance on the Scott Statement

Is Scott a Liar, Half a Liar or an Innocent Victim?

   The central issue in the Digger coverage was reporter Katie Jickling’s claim that Scott had falsely told the public that OneCare Vermont had saved the state $7.7 million in health care costs in 2018. That was the claim in the first Digger story on the Scott budget address. That story went up sometime during the day Sunday, Feb. 2. By the end of the Super Bowl game, it was gone, only to appear in rewritten form on Monday afternoon. The judgment in the PolitiFact lexicon had changed from “Mostly false” to “half true.”

   In an editor’s note, Digger said that its previous article had been revised after the governor’s office had reached out “clarifying his statement as focusing on the Medicaid patient pool. This made the statement more accurate—we changed the ruling from mostly false to half true—but Scott still left out important context about overall costs associated with the One Care program.”

  In the recast piece, Jickling picked up the thread of Digger’s thinking: referring to the putative $7.7 million savings, she wrote, “That savings figure jumped out at us,” she wrote. “Our research on OneCare has found mixed results—and an open admission from health care officials that the program has not yet created the savings they hope to achieve, Did we miss something?”

   Did they ever! The whole mess is a tissue of mistakes, sleazy writing, and deliberate misinformation. Too extreme? Here are the facts:

   The whole modern reform movement in the United States, under the general rubric of “Obamacare,” was launched in 2010 with a clearly defined track.  There was a sort of warmup period from 2013 to 2016. In 2017, ACOs like OneCare would be allowed to pilot new reimbursement systems, with the first fully operational year coming in 2018. The target results were supposed to be achieved by 2022—a five-year span. Given that reality, let’s consider the Digger claim that OneCare hasn’t achieved the results it had hoped for. Keep in mind that that under federal law the first full reform year was 2018. The Digger claim here is pure garbage.     

   The fact is that no one knows what the performance track is because it is impossible to tell that from one year’s results. No one will know even the most preliminary results until we see the 2019 results, and they aren’t available yet. Even then, it will be difficult to project what is likely to happen in 2020, 2021 and 2022. And what really indicts the quality of the reporting here is the statement that it’s based on “an open admission” from health care officials.

   There was no such “admission”—everybody involved in the reform project has been bending over backwards not to claim more than can be fully justified. The so called “admissions” were simple statements of fact, and describing them as admissions is just sleazy writing. Moreover, the results so far, while less than fully proving the validity of the reform concept, have been good, not bad. The system performance on Medicaid was positive in 2017, and even better and more encouraging in 2018. We don’t have the 2019 results, but Scott has access to the figures for most of that year, and he said they look good too.

   What’s left of the Digger judgement is that Scott did not include the administrative cost of OneCare in the savings figure of $7.7 million dollars, and that he had implied that the Medicaid performance also covered the performance of the other contracts, the ones with Medicare and the insurance carriers. The whole admin cost stuff is just silly, and not worth time. The issue of whether Scott was clear about the scope of the performance, however, is clearly substantive, although basing a half-true rating on that alone seems overdone. For me, the more interesting element there is what it reveals about the Digger style, as well as its editing performance.

   The whole piece is predicated on the call that a Scott spokesman made to Digger in the wake of the first, erroneous piece, the one that got taken down on Sunday night and rewritten. The spokesman “reached out with additional information clarifying his statement as focusing on the Medicaid patient pool.” That sounds both reasonable and innocuous. Based on my 60 years in the journalism and policy world, I would urge my tiny corps to look behind to see the real weaseling by Digger.

   Jickling’s reporting was based on an interview with Ena Backus and Alicia Cooper of the Agency of Human Services staff weeks before the two stories went up. Backus and Cooper are seriously credentialed specialists in the health policy biz. Backus has a masters degree from Brandeis University, and Cooper has a Ph.D in health policy research from Brown. No serious person could talk to those people without learning that the 2018 results were from Medicaid only, not Medicare or Blue Cross. Nor that the results were encouraging, without being fully dispositive. The reason I know that is because I talk to them about the same stuff myself, and that’s what they told me.

   What obviously happened here is that once the Diggers figured out that they were turning a guy who hadn’t spoken a single false word into a liar, they realized they had to climb off their original judgment and try to cobble together enough other stuff to avoid total embarrassment by calling him only half a liar…After all, it was Digger’s maiden voyage on the good ship PolitiFact.

   Sound too contentious? Possibly. If so, my tiny corps should suspend their own judgment on their faithful correspondent. My next post will demonstrate an even worse performance by Digger, one that poses a threat to the whole reform process itself.

Health Reform: The Summit is in Sight

by Hamilton E. Davis

   It was about this time of year in 2011 when Vermont’s health care reform project was born. The Harvard professor William Hsaio was ready to bring his plan for a radical new delivery system into the Legislature. The plan had been commissioned in the final years of the Douglas administration, but a new governor, Peter Shumlin, had been elected the previous November. Hopes were high for the Hsaio plan because it was a so-called Single Payer proposal, and Shumlin had won both a difficult primary election and a very close general on the strength of his support for exactly such a policy.

   However, the Hsaio plan died a quick death, and Shumlin turned the problem over to a new architect, Anya Rader Wallack, and a new political manager, the former lobbyist Steve Kimbell. Working with the Legislature, the Shumlin team came up with a new plan that passed quite easily given its far-reaching significance, and went into effect on July 1 of that year.

   At the time, I wrote an analysis for VTDigger suggesting that the Shumlin reform effort could succeed, but that it would have to travel a very long road to get there. In fact, the road has been longer than I expected, and far more difficult than I anticipated. Yet, here we are—close to a financially and medically sustainable reform system.  We can now see what such a system looks like but getting there will be very hard. We will begin to see just how hard by the legislative crossover deadline in early March. Over the last couple of weeks, the reform technocrats have been trekking up to the state house to tell legislators where they think we are and where reform is headed. I have very little confidence in that process, partly because after watching it for the last eight years I have seen no evidence that the Legislature understands health care at all; and further, because the press, a.k.a VTDigger, has done a terrible job writing about it, a view I have already expressed at length. In any event, herewith my take on the reform effort:

What has Reform Accomplished So Far?

The reform effort has done two critical things so far. The first is that it has effectively cut annual inflation in the 14-hospital Vermont delivery systems in half. The graph below shows that progress. The graph shows an inflation rate of 8.0 percent over the period 2001 to 2009. I call the rate in 2010, 2011 and 2012 the anomaly period; the drop in 2010 was clearly caused by a drop in demand flowing from the 2008 financial crash, and the 2011 and 2012 rates were set by the Legislature as part of the transition to the establishment of the Green Mountain Care Board.

 The important number today is an inflation rate of 3.9% from 2013 to the current year. Those gains resulted almost entirely from conventional downward regulatory pressure on hospital spending, although the situation among the small hospitals is unsettled, about which more later. The second major accomplishment of the project is the establishment of OneCare Vermont, the consortium of doctors and hospitals whose purpose is to allow those providers to deliver a full range of care to large cohorts of Vermonters for a fixed price. The key words there are fixed price.

   The consensus in the health policy community is that changing how doctors and hospitals get paid is the key to moving health care costs from super-heated inflation that took health spending from 6.6 percent of the U.S. Gross National Product in 1966 to more than three times that today. The fee-for-service engine that has driven spending has to be changed. The knotty question at the heart of health reform is—how?

What’s Going on with OneCare?

     No single entity has been more vilified over the course of the reform gauntlet than OneCare Vermont, the state’s single Accountable Care Organization. The only possible exception is the University of Vermont’s health network; and, in fact they should probably be considered together, because much of the opprobrium that flows over OneCare is really aimed at UVM, which is a co-owner. The result is that neither the public nor the legislature have been able to get a fix on it. So, the basic questions:

• What exactly is an ACO, and what good is it? An ACO is simply a corporate structure, roughly akin to a cooperative or coalition, that allows a group of doctors and hospitals to provide necessary care to a big bunch of patients for a single price. Consider Sally Smithers, who might live in Swanton. If she has a medical problem, she could go to her primary care doctor, who might solve the problem. If not, the doctor could send her to the community hospital in St. Albans, and if the doctors there couldn’t fix it, they could send her to to UVM Medical Center, or to Dartmouth-Hitchcock, or both, or somewhere else. In fact, patients pinball through the system like that all the time. The ACO simply draws a line around all those hospitals, and establishes a single price for the care they provide. At the same time, it encourages the elements in the system to work together to solve the basic problem—returning Sally Smithers to full health. We need the ACO to accomplish the Vermont reform plan, which gets patients like Sally back to health more efficiently medically, and at a price we can afford.

• But why is OneCare, our ACO, doing so badly? It isn’t doing badly; it’s doing just fine. In fact, basically every important piece of data bearing on its performance has been positive. To pick just one: The OneCare budget for 2020 showed that in 2018, just eight percent of the enrolled Medicaid patients were in fixed price contracts, as opposed to the much softer cap of the group cost targets covering the remainder of the Medicaid population. The naysayers and reform opponents jumped all over that—a clear portent of failure they said. But then the 2020 figures came out, and they showed a 10-fold increase, from eight percent to 88 percent. Another positive metric: Vermont Blue Cross, which either insures or manages the health insurance for just north of 200,000 residents, announced recently that they would attribute all of their patients to OneCare. That cohort is not yet enrolled in fixed price contracts, but that’s where they are headed.

Finally, one of the most important metrics ever has just become available. The Medicaid figures for 2018 showed that the fixed price component of spending for that year was set by contract on Jan. 1 of that year at $67,254,681. Facing that discipline, the state’s hospitals and some independent physicians brought that cohort in at $59,591,372, which is $7.7 million below what was expected. The significance of that number demonstrates the potential for fixed price contracting to save real money—the percentage under was 11.5 percent—across the single most important sector of heath system costs. This is a very complex subject, which I will get into more fully in my next post, but it is striking how much is going right with reform now.

   I don’t wish to seem Pollyanna-ish about this; there some issues out there, like the total number of Vermonters enrolled across all payers, which is not yet up to scale, but that challenge is manageable. The fact is that OneCare is now fully in place and operational, and while it is not perfect, it is going as well as the other major players, like the Green Mountain Care Board and the Scott administration.  Those three pieces of governmental machinery are not obviously parallel things, but they all have to play well and play together to accomplish the reform goal.

   As I said at the outset, however, the easy money has already been made. Getting the system fully sustainable will be far more difficult. The last 15 percent of a very heavy lift like health care reform is always the hardest, and so it will be here. And none of the players is really ready for the final push yet. My tiny corps of brilliant readers will note that I haven’t described what the final push will look like, but it is coming—soon.