After
just two weeks, it feels as though a month has gone by in the legislature and
that there is only a month to go before the close of the biennium. It’s not far
from true: there are only six weeks before “crossover” – the deadline for bills
to be finished in one body if the other is to take it up this session. Unlike
last year, when unfinished work could be picked up this year, all bills in
progress die at the end of a biennium.
That
makes it particularly surprising to see such a huge volume of new bills still
being introduced by individual legislators. Although the media picks out some
of them for headlines about what the legislature is “considering,” that isn’t
accurate. Most will not get considered at all.
Our
agenda (like most committees) is packed with ongoing state public policy
priorities, follow-up on issues we tackled last year, the need to review the
health care sections of the governor’s budget proposals, and the review of
bills passed by other committees that have health care impacts.
After
crossover, more and more time will be taken up with House floor action, and the
scattered bits of committee time will be needed to review bills the Senate sent
over.
In
these first two weeks, part of our committee time was taken up by reviewing
health care issues in the budget adjustment bill: that’s the bill every January
that adjusts the current year budget based on actual expenditures and revenues.
We
also needed to be brought up to speed on the newly exploding issue of the
Brattleboro Retreat’s urgent request for additional state funds (and threat of
closing without them) and the administration’s refusal to add more to the two
increases already provided in the past year unless there were fiscal reforms
there.
We
heard an overview of the recommendations of the Rural Health Care Task Force we
established last year, and a primary care work group. Both underscored our
urgent need to address the losses in the health care work force at a time when
our needs – as an aging population – will be increasing.
We
attended a presentation by primary care health care experts before the Green
Mountain Care Board, It was heartening to see members of the Commerce Committee
also in attendance. This is a joint challenge.
We
also heard reports about our health care insurance market, and whether there
were opportunities to address cost burdens by changes in how it is organized –
another report we requested last year.
We
spent two mornings hearing from OneCare, the Vermont Accountable Care
Organization that is implementing our All Payer Model for reforming how
providers are paid.
Next
week we will be getting updated on our pharmaceutical cost initiatives and
where they stand: the cost transparency law, and our effort to help create a
multi-state importation buying pool.
We
will also be hearing the plan that has been created – on our directive from
last year – on how to educate Vermonters about their rights under the health
care information database.
There
are several other major reports pending on mental health integration with health
care and the needs for community-based residential services.
Each
of those lead to a need for a “deeper dive” if we are going to try to address
the challenges they raise. By the end of next week, and knocking off at least
one week for budget work, that leaves four weeks for those deeper dives, which
makes it clear that we cannot expect to be able to try to address all of them.
Here’s
a review of a few of the key issues:
OneCare
and BAA
The
budget adjustment proposals from the governor brought OneCare to the forefront
in the first week. The recommendation was to add money for half of the new
projects OneCare asked to fund for the current year, for 3.9 million (1.8 in
state funds and the rest in federal match.)
Lots
of folks have been getting pretty antsy over whether the All Payer Model is
going to pay off or not. It certainly hasn’t yet, but it is very early. When
and how will we know whether to cut our losses and try something different?
The
history matters. Several years back, the federal administration made the
decision to change the way Medicare pays the providers who deliver care.
Instead of paying for each service that a beneficiary receives, Medicare is
shifting to paying based on the value of services received.
One
of the mechanisms for doing that is through accountable care organizations.
These are providers who get together and agree to be responsible for all the
care a person needs for one set price. If they save money, they keep some of
it, but they also take the risk of losing money.
The
idea is to increase the incentive to focus on keeping people healthy instead of
just paying for services after they are sick. Obviously, quality of care needs
to be closely monitored, so that the savings don’t come by cutting corners on
care when people do get sick.
Because
of the financial risks, these provider organizations tend to be headed up by
hospitals, which have more ability to absorb it than a medical practice would.
In
Vermont, given our small size, we have only one accountable care organization
that survived the initial federal trial years, and although it has broad provider
membership, our biggest hospital network has the biggest part of running it.
All
of this is still only a discussion of federal policy regarding Medicare.
About
five years ago, Vermont looked at this emerging new federal plan and asked,
wouldn’t it create greater efficiency and bring payment reform about more
comprehensively if accountable care organizations took on state-run Medicaid
and commercial insurers as well?
That
would enable those payers to take advantage of the provider network that was
assuming an “all care” payment instead of a fee for each separate service.
That
required agreement by the federal government, since some of the standard
Medicare rules would need to be more flexibility in order to pay for things
that Vermont wanted to add. This agreement is the “All Payer Model.” All payer
means available to all types of payers (insurers).
The
federal agreement included the addition of extra federal money made available
for start-up costs, which include new data analysis systems for the ACO
(OneCare) finances and quality measures, creating the systems for managing the
care of patients, and trying out new projects that stress prevention.
Although
I have been chomping at the bit as much as anyone to see whether these
investments are actually going to meet the promise of reducing cost and
improving quality, we were reminded this week that we are just starting the
third year of a rather momentous changeover in how health care is paid for. We
can’t expect a quick turnaround. The data review for year one – 2018 – is not
yet out, though it should be shortly.
Although
there have been headlines about the huge increases in the OneCare budget, most
of it is because they are taking responsibility for more patients and paying
for their care. That isn’t a cost increase; it’s a shift in where the money is
being funneled.
The
OneCare administrative overhead costs have been going down each year on a per
person basis (as well they should, based on economies of scale.)
Its
year three budget does not show cost savings in health care delivery, but that
is based on the investment money being put into creating the new systems. In
addition, there are the costs of paddling two canoes with one foot in each.
If
health costs were being paid “the old way” the costs of care for everyone
OneCare is responsible for this year (250,000 Vermonters) would be $1.363
billion. The actual cost budgeted by OneCare is $1.425 billion. So there is a
way to go.
The
$62 million difference is in OneCare administration ($7 million) and the reform
investments ($55 million.)
There
is a chicken-and-egg element. Overall savings are not likely until getting to
full scale – in other words, most people in Vermont receiving care coordinated
by OneCare. But that takes enough health care providers agreeing to be paid
this way, and health care buyers (the insurers) agreeing to pay for their
members’ care this way. Both take on risk.
So
far, providers have been joining more rapidly. By this year, every hospital
(with all of their provider networks) will be participating. Commercial
insurers have been more cautious. The vast majority of private insurance in
Vermont is sold to large employer groups, and those groups, not the insurance
company, make the decisions (sometimes through a bargaining agreement with their
employees.)
In
order to get to full scale, those groups will have to be convinced that it is
in their interest to participate.
All
this comes full circle back to the budget adjustment question of new state
funds to help support OneCare projects on behalf of the state’s Medicaid
members. Right now, Vermont provider hospitals are paying about 74 percent of delivery
system reform investments, the feds are paying $16 percent, and the
state is paying 10.5 percent.
In
the usual course of Medicaid budgeting, the legislature does a careful review
of new program proposals before funding them.
The
$3.9 million in projects OneCare is proposing are not well fleshed out yet, and
because the money is coming in the budget adjustment bill, we don’t have the
time to do much of a review. There is some public policy power that is being
turned over to this private provider entity.
The
projects will still have to be approved by the state, so we recommended that
language be added to the bill to direct the state Agency of Human Services to
be fully engaged in project development. But we still weren’t happy about the
timeline, and we told the Appropriations Committee that.
The
Other Stuff
It’s
taken so long to try to explain the status of OneCare that I’m going to have to
postpone what I wanted to share about new changes in the health care market and
a number of the other issues listed up top.
Other
future topics: an overview of the one bill I introduced this session and the
few others I signed on to as co-sponsor, and a brief list of key new bills that
are being considered this session.
***
Feel
free to get in touch any time during the session with Rep. Goslant and me.
There is a lot more going on than we can summarize, so if you have questions
about something – ask. We are buried in committee work and don’t always know
what is happening in other committees, but we can find out for you. It is an
honor to serve you. (kgoslant@leg.state.vt.us; adonahue@leg.state.vt.us)
You can also contact me to receive these updates by email.
