The state’s sole accountable care organization is asking regulators to approve a $1.36 billion budget. The spending proposal represents a 33% increase over last year.
OneCare Vermont, which is jointly owned by the University of Vermont Medical Center and Dartmouth-Hitchcock Medical Center, submitted the budget Oct. 1.
The company will present the budget to the Green Mountain Care Board on Oct. 30. A final vote by the regulatory board will take place in December.
OneCare is supposed to create savings in the health care system by focusing on preventative primary care.
But the company is losing money. And the for-profit is demanding that the state prop up the program with a $13 million payment from Medicaid. OneCare leaders say the state investment is necessary to keep the program going.
At the same time, OneCare is looking to increase the number of patients in the program by more than a third, from 160,000 to 250,000 patients (about 40% of Vermont residents). It also wants to double the amount of money from private commercial insurance companies.
OneCare officials say the additional participants in the program will ultimately improve health outcomes and lower costs.
The all-payer system, which was launched in 2016, pools money from Medicaid, Medicare and private insurance. Through OneCare, hospitals and doctors are paid a flat annual per patient fee instead of reimbursements for specific treatments.
The OneCare program has been held up as the answer to Vermont’s health care crisis. The system is designed to incentivize doctors and hospitals to invest in preventative care.
But two and a half years into the all-payer system experiment, lawmakers worry that OneCare is not delivering on its mission. The number of Medicaid patients using primary care services has dropped, for example. In addition, OneCare is not able to realize enough savings to stay afloat on its own and is asking the state for support.
By 2022, when the OneCare Vermont program is fully rolled out, the goal is 70% participation of all eligible Vermont patients, excluding residents who are uninsured or who are covered by federal or veterans’ health care. At that point, the program will also control most of health care spending in Vermont.
In 2017, the last period for which data is available, Vermont’s health care spending was $6 billion. That’s roughly equivalent to the operating budget for state government in 2020.
As the budget process unfolds over the next few months, Mike Fisher, health care advocate for Vermont Legal Aid, said he’ll be asking questions to ensure that OneCare’s budget projections are “reasonable” and that the results will be well-documented and tracked.
“There are substantial resources at play here,” he said.
Medicare, Medicaid and commercial insurance providers, which make up the all-payer system, each have their own administrative costs. On top of that, so does OneCare. In 2020, OneCare’s budget for overhead and salaries will be about $19 million, up from $16 million last year. Nearly $12 million of that total would fund 77 staff members, which includes teams that analyze data, manage finances, and work with hospitals.
OneCare director of finance Tom Borys said the administrative budget increase is a sign of “this network taking another step” toward full implementation of all-payer.
“The big number at the top of the page is showing how committed we are to this model,” Borys said.
Tenuous Results
Thus far, promises of improved care and lower costs have yet to materialize, according to 2018 results published in the budget. The organization reported a loss of $1.5 million in the Medicaid program in 2018, and a projected loss of $8 million in 2019. OneCare also hasn’t met goals for participation in the program: The target for this year is 50% of “eligible” Vermonters — roughly 261,000 people. The current total number of patients is about 160,000.
The company has also not yet produced any evidence that the initiative has made people healthier. In fact, OneCare performed worse in 7 out of 10 Medicaid quality scores in 2018. For instance, a smaller proportion of Medicaid patients were screened for clinical depression and engaged in drug or alcohol treatment in 2018 than were in 2017.
In an interview, OneCare leaders returned to their standard talking point: it’s too soon to draw firm conclusions on the model’s success. OneCare director of public affairs Amy Bodette said it’s “too early” to count on those numbers.
“The quality measures are designed to be aspirational,” said Borys, OneCare’s finance director. Weight loss for hypertension or drug treatment takes multiple years to lead to lower health care costs in the system, he explained.
It takes three to five years to get results, said OneCare CEO Vicki Loner; some of the programs are only in their second year. OneCare can report “significant process improvements,” Loner said.
Green Mountain Care Board chair Kevin Mullin agreed. “This model can’t really be judged until it reaches scale,” he said.
More Medicaid money
The most controversial request in OneCare’s budget is the $13.1 million in Medicaid funding — money from the state that can only be approved by the Legislature in March after the Green Mountain Care Board votes on OneCare’s budget in December. The figure is $6.7 million more in federal and state money than has been requested in previous years, Bodette said.
“We do not have money lying around everywhere to make requests like these easy,” said Senate Pro Tem Tim Ashe, D/P-Chittenden.
“The largest health care organizations are used to getting everything they want financially,” he added, of the cash request. “There’s a reason they take that approach, because it usually works.”
Ashe worried that spending more Medicaid money could affect the state’s global commitment cap, the federal limit on the state’s Medicaid spending. The $13 million figure is far below Vermont’s $148 million limit, but Ashe said that if drug prices rise or if a recession hits and more people go on Medicaid, that could be in jeopardy.
OneCare should show tangible results, Ashe said.
“Before we put any more taxpayer dollars toward a bureaucratic organization that doesn’t provide direct care … we’re going to need to be more confident in the value of the dollars we’re spending,” Ashe said.
Rep. Anne Donahue, R-Northfield, vice chair of the House Health Care Committee, echoed that concern. The request raises the question “whether the creation of this huge new bureaucracy can ever actually be counterbalanced by savings” from cheaper, more efficient care, Donahue said.
She said the ask is “a significant concern” and would merit investigation from the Vermont Legislature.
“If the numbers of participants does not grow significantly, but the costs of the overhead on the other hand are growing beyond what expectations might have been, we are moving towards a potential failure of the project, rather than what we were hoping to see,” she said.
OneCare representatives said more money from Medicaid would take the burden off the hospitals. They’re the ones currently bearing the brunt of the administrative costs for the all-payer system, said Borys, the finance director.
“We can’t rely on the hospital funding forever,” he said. “We have to continue to invest in the programs that will yield success, while being mindful of the prices put on the backs of hospitals.”
Both regulators and state officials said they didn’t have concerns about OneCare operating on the assumption that they’d get additional taxpayer dollars for administrative costs — even though the program is supposed to save money and function on its own.
While Gov. Phil Scott said last month he didn’t want to allocate more Medicaid money to OneCare, Vermont’s director of health care reform Ena Backus said the state could be open to the possibility. “I don’t think the letter rejects that idea out of hand,” she said.
Backus also said OneCare’s budgeting process is “very transparent.”
The uncertainty over state approval of the additional Medicaid funds wouldn’t affect the Green Mountain Care Board’s approval process, according to Mullin. The regulators would take OneCare at its word that it can secure the money, Mullin said.
Open questions
OneCare is still in the process of ironing out contracts with insurance companies and hospitals, and questions remain about how many doctors and patients they’ll be working with come next year.
OneCare expects to add 75,000 more participants from private health insurance-plans from Blue Cross Blue Shield and MVP Health Care to the mix. But those additions are still up in the air; OneCare won’t confirm its contracts with those companies until early 2020, Loner said.
The Green Mountain Care Board will spend the next two months trying to get answers. The board will hear presentations from OneCare and receive public comment before making a final decision.
“To me there’s a lot of unanswered questions,” Mullin said.
OneCare hasn’t helped in that process; the company has thus far refused to open up its books to public scrutiny and fought a change in state statute that would have given the state auditor expanded access to financial information. It has not published the salaries of top earners and as a private company, it has no obligation to respond to public records requests. That means OneCare’s finances remain largely obscured.
There are even more questions for those unfamiliar with the lingo and bureaucratic machinations of the health care system, said Fisher of Vermont Legal Aid. At the hearings, he said he plans to press OneCare and the Green Mountain Care Board to explain the implications for Vermonters on the ground.
When OneCare reports savings or losses, “one of my fears is that it’s going to be hard for any of us to understand what it means,” Fisher said.
“We need a clear way of evaluating success on this.”
Correction: An earlier version of this story referred imprecisely to the screening of Medicaid patients for clinical depression in 2018 compared to 2017. A smaller proportion of such patients were evaluated that year, not fewer of them.