by Wendell Potter
When I read that Fletcher Allen Health Care and Dartmouth-Hitchcock Medical Center were forming a new for-profit entity to administer Vermonters’ Medicare benefits, one thing leapt off the screen: the term “for-profit.” As someone who worked for two of the country’s largest for-profit health insurers over nearly 20 years, I know how the quest for profit can supercede the best interests of patients.
I want to believe that the executives of Fletcher Allen and Dartmouth think that OneCare Vermont, the business they hope to establish, will lead to better and more cost-effective care. What I have to believe, however, is that they have figured out a new way to make a lot of money, over and above what they are paid now, if and when their venture gets the green light from the federal government.
The two organizations have submitted a proposal to the Centers for Medicare and Medicaid Services (CMS) to set up and operate an accountable care organization, or ACO. An ACO is a structure that, in theory, gives doctors, hospitals, and even insurance companies financial incentives to work together. Instead of the current fee-for-service arrangement, health care providers in an ACO receive a portion of a certain amount of money determined by CMS to provide care for a given number of Medicare beneficiaries.
If OneCare’s doctors and hospitals provide care more cost efficiently and with no decline in quality, as measured by CMS, OneCare will get to keep half of the savings. The Medicare program would keep the other half.
Evaluations of operating ACOs show that they are not a surefire way to save money or improve care, however. That’s partly because of their complexity and partly because ACO providers want to be paid at least as much as they were previously receiving. Nevertheless, Congress authorized CMS to approve ACO proposals from across the country as part of several pilot projects in the Affordable Care Act to try to reduce government spending on health care.
It is possible, of course, that OneCare will deliver the goods and remove costs from the system while taking better care of patients. But one has to wonder: How much will the venture cost taxpayers? Who will profit and by how much?
Fletcher Allen Senior Vice President Todd Moore, who will be CEO of OneCare, told VTDigger: “None of us are drawing a salary from OneCare at this point just because it’s a theoretical entity.” The obvious follow-up question is: How much will the executives and staff of OneCare be paid when it becomes a reality, as early as three months from now? And will that compensation be added to their current pay from Fletcher Allen and Dartmouth?
And how much money will it take to operate OneCare? In other words, what will be the additional overhead cost to taxpayers?
Green Mountain Care Board Chair Anya Rader Wallack has vouched for the transparency of Fletcher Allen executives throughout the ACO application process. But transparent to whom? What information have they provided to the board and CMS? Are the OneCare folks willing to share their business plan and financial projections with Vermonters, many of whom will be enrolled in OneCare whether they like it or not? Are they willing to disclose their projected income and how they propose to spend it? And what will happen to the profits?
What I learned in my career is that for-profit health care organizations know how to do one thing very well: make money. That becomes Job One. Unfortunately, for-profits don’t do nearly so well meeting consumers’ and patients’ needs. If they did, we would not have 50 million Americans without insurance. And we wouldn’t be trailing the rest of the developed world in most measures of health care quality and outcomes.
Wendell Potter, who wrote this guest blog, consults with Public Assets Institute on health care issues. He was formerly head of national corporate communications and chief corporate spokesperson for Cigna. Prior to joining Cigna, Potter headed communications at Humana Inc., another large for-profit health insurer. He lives in Philadelphia.