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Vermont auditor questions health care reform implementation costs

Published: Jun. 21, 2021 at 6:03 PM EDT|Updated: Jun. 21, 2021 at 6:25 PM EDT
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BURLINGTON, Vt. (WCAX) - A new report from Vermont’s state auditor questions whether Vermont health care reforms are saving taxpayers money. The performance audit comes ahead of an important deadline for the all-payer model.

Later this year, state leaders including the Scott administration and the regulatory Green Mountain Care Board, will have to decide whether they want to enter into another multiyear agreement with the all-payer model. It’s an experimental health care payment system that seeks to control ballooning costs of health care and improve overall population health.

Providers participating in the all-payer program are paid a flat monthly rate from Medicare, Medicaid and private insurance instead of charging patients and their insurance companies for each procedure.

“The fixed fee model rewards you for keeping Vermonters healthy,” said Agency of Human Services Secretary Mike Smith on Monday.

The all-payer model is administered by OneCare Vermont, a group of hospitals and providers which band together under the banner of an Accountable Care Organization (ACO).

A new report from State Auditor Doug Hoffer shows from 2017 to 2019, OneCare missed Medicaid financial targets by $11 million and that the state paid nearly $15 million of OneCare’s operating costs.

“As a percentage of $6 billion, that’s not a lot. But when you’re trying to save money and it’s costing you $30 million over two years and it’s just gone, isn’t it appropriate to have a conversation?” said Hoffer.

The Scott administration, however, says analyzing OneCare’s operational costs doesn’t paint the full picture of whether the all-payer model is working or saving money. They say that analysis should include the impact on overall health care spending, including quality and health outcomes.

“I want to take a look at the bigger picture of health care costs as we move forward,” said Smith.

And providing those health care services isn’t up to OneCare, as the organization itself does not provide medical care. OneCare is a collection of hospitals and providers under a single banner that funds pass through. The quality of care is up to the hospitals and providers.

The University of Chicago is conducting a full analysis of Vermont’s all-payer model, but that won’t be finished for another three years. But state leaders say we are seeing savings in Medicaid, and that the state needs to continue with its reform efforts.

“We have seen some movement since implementing the plan, it is important for us to stick with it and see more,” said Ena Backus, the director of health care reform under the Scott administration.

Smith also pointed to how fixed payments saved hospitals and providers during the pandemic when COVID-19 restrictions shut down elective procedures, and many hospitals and providers had no income. Smith says he’s committed to reform.

“I’m serious about moving in this direction,” he said.

Hoffer and Smith say there’s agreement on getting away from a fee-for-service model. But Hoffer questions whether we could be implementing it better.

“If we won’t know the answer to that for 20 years, a five-year contract and another five-year contract -- at what point do we give up even having a conversation about alternatives or whether this is working in the face of clear financial losses,” Hoffer said.

However, Smith says the state is considering a number of options going into December, including signing a one or two-year extension of the all-payer model.

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