Health care leaders join Shumlin to create new cost reduction program

March 13, 2014

Vermont Digger

Health care providers and insurers joined Gov. Peter Shumlin Wednesday to announce two new programs they hope will contain system-wide costs and improve treatment quality.

“We all know that as we move to the first sensible health care system in America we’ve got to find a way to deliver better quality care for less of a cost increase,” Shumlin told a group of reporters at the Green Mountain Care Board offices in Montpelier.

The so-called “shared-savings” programs announced at the press conference are offered by payers, in this case Medicaid and commercial insurers, to provider groups called Accountable Care Organizations.

Under the agreement, ACO providers will meet quality standards for the care of a patient population at an agreed upon cost. If the providers can meet the quality standards for less, they split the savings with the payer.

Those savings give providers an incentive to cut costs and improve care.

Savings realized by commercial payers will be passed on to consumers in the form of lower premiums, according to Don George, the CEO of Blue Cross Blue Shield of Vermont.

Patients are unlikely to know their care is being managed by an ACO through a shared-savings program. However, patient satisfaction is one of the quality measures that will be used to determine if providers have lived up to their end of the bargain.

Instead of losing revenue when they bill for fewer services, doctors and hospitals will have the opportunity to share in savings if they reduce the amount of services it takes to keep a population healthy, according to Anya Rader Wallack, a health care consultant to the Shumlin administration.

Vermont currently has three ACOs. The largest is One Care Vermont, which is underpinned by Fletcher Allen Health Care and Dartmouth-Hitchcock Medical Center, but also includes Vermont’s 13 other hospitals, several federally qualified health centers and rural clinics, and hundreds of private physicians and specialists.

There is also Community Health Accountable Care, which includes seven of Vermont’s federally qualified health centers, and Healthfirst, an association of independent practices that includes 130 physicians in the state. All three participate in the Medicare shared savings program, which the federal government offered nationwide several years ago.

Participation during the first three years of that program poses no risk to providers, meaning they can only share in savings and won’t be penalized for overages to the agreed upon budget. Medicare and providers share the risk starting in the fourth year.

The commercial and Medicaid offerings in Vermont will operate the same way, Wallack said.

Dr. Paul Reiss, who has a family medicine practice in Williston and leads Healthfirst, said the Medicare program has already illustrated that shared-savings can improve care and reduce costs.

To meet quality measures, providers track patients across the care continuum and seek to better coordinate their efforts. That has exposed gaps in care. Closer scrutiny of how patients are treated has helped improve outcomes, he said.

“We know that oftentimes people are not getting proven preventive care that will help them be healthier,” Reiss said.

By the same token, shared-savings encourages providers to think critically about potentially wasteful services that could reduce their savings, such as X-ray imaging for lower-back pain, he said.

Fees for services like these make sense when they go to the providers’ bottom lines. In the new system, spending too much to keep a population healthy could mean leaving money on the table.

Reiss says the shared-savings programs will benefits his organization.

Private doctors are paid less than hospital systems for the same services, he said. If the shared-savings program reveals they provide those services with better quality, it could change the current environment that is making it difficult for private practices to survive, he said.

At the very least, he hopes the shared-savings experiment will show what services are being provided at a lower cost through private practices, Reiss said.

That kind of transparency will be good for consumers and help Vermonters get the best value for their health care dollars, he said.
Playing politics with the presser?

The purpose of Wednesday’s press conference was to announce that a critical mass of payers and providers had signed agreements to participate in the new shared-savings program.

But it’s also possible Shumlin needed some good press on the health care front after a tough week.

On Friday, Shumlin told VPR he wouldn’t unveil his health care financing plan to lawmakers until after this session. He followed up that revelation with a remark that Republicans are having a field day with: A wisecrack about selling gum and lollipops to raise money for single payer.

More positive media exposure started Tuesday night with an analysis for VPR penned by longtime journalist Hamilton Davis.

Davis described Shumlin’s decision to delay discussion of how to finance a universal health care system as a savvy tactical move that put the governor’s reform agenda back on track.

It’s too early to discuss financing options without demonstrating that Vermont can first realize cost savings, he argues, and the best hope Vermont has of doing that is through Accountable Care Organizations.

Wednesday turned into a Kumbaya moment with providers, insurers and government officials praising the public-private cooperation and shared mission that these new programs encapsulate.

Al Gobeille, chair of the Green Mountain Care Board, thanked everyone involved.

“To all of you, thank you from the bottom of my heart for being the team players that you’ve been,” he said. “Every single person has been a good actor and done great work.”

Not only is this type of programmatic offering only taking place in Vermont, Shumlin said, but also it’s the only place in the United States where something like this could happen.

OneCare Vermont CEO Todd Moore, who at one point referred to the state’s reform efforts as a “revolution,” thanked Shumlin for his tireless leadership on health care, and said providers are ready to double-down.

“I’m here to tell you that the level of engagement among providers of all types has never been higher, and Vermont’s spirit of hard work and straight talk has been on display over the last year as we worked on this program,” Moore said.

George also thanked the governor and reiterated the hand-in-glove cooperation between insurers, government officials and providers that it took to realize the new shared-savings offerings.
Plenty still up in the air

The programs are retroactive and providers will be responsible for their patient populations from the start of the year.

Providers won’t have a solid estimate of what population they are responsible for until late spring or early summer, according to Wallack and members of the Green Mountain Care Board.

The performance period extends through next January, at which point the payers will begin to assess whether the ACO met quality and cost measures. That will take four to six months, because of the lag in processing health care claims.

That means the state won’t know the results of this experiment until mid-2015.

Providers in ACOs have until the end of March to decide if they want to participate.

MVP Health Care, which was involved in the programs’ development, hasn’t committed to the program, Wallack said.

A spokeswoman for MVP Health Care did not immediately respond to whether that company plans to offer shared-savings to providers in their network.

If MVP does not participate, the new program will only include Blue Cross members and roughly 35,000 to 40,000 Medicaid patients.

This first year is being treated as an opportunity for all parties to acclimate to the changes, fine tune the program and see what needs to be tweaked.

“We want to learn from the first year to adapt and improve going forward,” said Kara Sueter, who is leading development of the Medicaid offering for the Department of Vermont Health Access.