Legislative Update on Health Care Payment Reform:
the All Payer Model
Rep. Anne Donahue
October 27, 2016
There is so much discussion and focus on the
agreement that Vermont has just signed with the federal government for an “All
Payer Model” for health care reform that – having sat through a lot of
testimony before the House Health Care Committee – I thought I should share
some comment and clarification.
For those who followed my legislative updates last
spring, this is not something being sprung on the public out of nowhere, and it
has not happened without involvement of the legislature.
That doesn’t mean it is good, or will work as
intended; it just means that there was some process behind it.
So here are the clarifying points:
In terms of Medicare, Act 113, as passed by the
legislature last spring, says that a condition of the authority of the Green
Mountain Care Board and governor to sign was that the agreement cannot reduce
Medicare covered services, increase Medicare patient cost sharing, or alter
Medicare appeals processes.
In terms of the money, the language is that there
can be no “conversion, appropriation, or aggregation” of Medicare money by the
State of Vermont – Medicare money still must go directly to providers or
provider organizations (Accountable Care Organizations), as it does now.
These organizations were created by the federal
government, already exist and will continue to exist regardless of the “All
Payer Model.” What the state is doing is including the ability for Medicaid and
private insurance to come under an ACO.
We will end up with only one ACO because of the size
of our state. An ACO takes on the risk of losing money, and a smaller pool of
providers cannot take on that risk. The federal government recognizes that,
which is why the agreement requires working to recruit the majority of doctors
in the state to participate (and ergo, their patients.)
Having only one ACO does not mean (as some are
saying) that the ACO is going to be controlled by UVM or the hospitals. The
governance of the new ACO was negotiated over many months, includes community
partners, and gives non-hospital members veto powers.
The legislature vetted the All Payer Model proposal
in a number of committee hearings. Act 113 allowed for the process to move
forward (and for it to be signed, once negotiated) only if it met a number of
conditions, and with a long list of requirements for how it would be
implemented.
If the “only if” terms are not met by the agreement,
it is not legally binding, because the GMCB and governor do not have the
authority to sign it.
All of the stakeholders who testified supported the
wording of the detailed requirements that are a condition of implementation. The
legislature passed Act 113 on an overwhelming, tri-partisan vote
(quarto-partisan, if you include independents.)
The consumer protection part of the bill was
originally introduced by the Democratic Chair and Progressive Vice-Chair of our
Health Care Committee. A separate bill that created conditions for any All
Payer Model was introduced by the Independent on the committee jointly with the
Republican raking member (me). The two were merged into the final bill.
The “devil of the details” will need to be developed
through compliance with Act 113 and its oversight mechanisms. Unfortunately,
there was very little news media coverage of Act 113 last spring, thus little
public awareness of these discussions and requirements.
So is this new model – the idea of making the
federal Medicare ACO plan much bigger, and including a majority of the state --
a good thing or a bad thing?
We don’t know. It has risks.
That worries a lot of people, legitimately, and is
why the legislature placed so many restrictions on it, including requirements
for ACO investments into primary care and community health care partners, and
much more patient involvement in care decisions. (You can see the whole list by
going to http://legislature.vermont.gov/,
clicking on “bills and resolutions,” and looking up Act 113.)
I think that there are two big risks – first, of loss
of quality, and second, of raising costs instead of saving costs.
There is a
fear that care will be rationed because of the incentive for doctors to provide
fewer services, since they will get the same payments for patients whether
there is a lot, or much less, care given.
The “counter” is that the system will be motivated
to do more prevention (such as annual check-ups) and community-based care (such
as home health) to prevent higher end costs when patients get sick from things
that would have been preventable. This is because doctors would no longer be
getting added reimbursement for those added costs.
The second major risk is that the whole new
bureaucratic layer of the ACO will cost more than any of the savings. The
savings theoretically come from better care outcomes, and the reduced
bureaucratic burdens of answering differently to different payers.
My own opinion has been, and remains, that this
whole thing is being over-sold on BOTH the potential benefits and the potential
risks. I don’t think it is going to produce major change.
It assumes that the big cost drivers are unnecessary
tests and unnecessary care being done just to make more money under “fee for
service”, and I don’t think Vermont doctors do much of that. It also assumes that we are losing a lot of
money from bad care coordination, and I think that though far from perfect,
we’ve already made a lot of progress on that.
There are many, much bigger cost drivers that will
not be touched by these changes.
But I also think the risks are being over-stated. I
don’t think our doctors will tolerate restriction on giving what they think is best
patient care. I also don’t think we/ the state will tolerate this experiment if
the administrative costs start skyrocketing.
There are not a lot of solid, viable alternatives
being offered. The cost of doing nothing is placing a huge burden on all of us,
including the tax burden of Medicaid, the economic burden on businesses paying
for health care, and the burden of unaffordable premiums for individuals.
So with some reluctance, and some trepidation, I
think it is appropriate to proceed, continuing one step at a time. Signing the
agreement is just the first step.
But we can’t put our health reform eggs all in this
basket. We need to be doing much more. My biggest single fear is that in
portraying this as a big “solution,” we will avoid tackling other key issues, and
that will contribute to the risk of failure.
