Paul Kendall: Health care reform needs to be reformed

This commentary is by Paul L. Kendall of Braintree, a retired corporate and nonprofit executive. He has served as a director or trustee of several health care organizations in Vermont and was involved in the 2015-16 discussions that led to the designation of OneCare Vermont as Vermont’s sole accountable care organization.

Those seeking to reform Vermont’s health care delivery system should focus on correcting two mistakes in past reform efforts.

The first adjustment is to recognize that if an accountable care organization is controlled by a teaching hospital, it has an inherent conflict of interest in achieving the goal of reducing health care costs. Such is the case now with the relationship between OneCare Vermont and the University of Vermont Medical Center.

The second is the recognition that the governmental bodies and legislative committees responsible for overseeing and directing Vermont’s accountable care organization lack the cohesive leadership, vision, and political will to do the job.

These are not new insights. Concerns about rising health care costs prompted the Public Oversight Commission under then-Gov. Jim Douglas noted in 2007 that:

  • The system (of authorizing annual spending increases) is self-perpetuating. Hospitals tend to add programs and services, requiring rate increases to cover revenue shortfalls and maintain operating margins.
  • Hospital strategic plans do not adequately reflect planning for deficiencies (risk) or alternative scenarios.
  • The HRAP (state health resource plan) needs to be updated to reflect a clear vision of what the delivery system should look like in 2020.

Nothing much happened in response to that report until Gov. Peter Shumlin proposed his single-payer plan and then, after withdrawing it, sought approval for the ongoing experiment led by OneCare Vermont. A five-year contract was subsequently awarded to the federal Center for Medicare and Medicaid Innovation, effective in 2017.

Unfortunately, as recent articles on VTDigger have documented, the results of this five-year effort have been worse than disappointing. Health care costs continue to rise unacceptably; access to necessary health care providers has decreased; and for many Vermonters, the quality of their care has suffered.

While there are many factors contributing to these outcomes, a primary one is conflict of interest.

Since its inception, OneCare Vermont, the state’s only accountable care organization, has been overseen by the University of Vermont Medical Center. In its defense, UVM Medical Center, along with its affiliated hospital network, has the deepest bench of medical and management professionals in Vermont and is the most politically powerful health care advocate in the state.

But a complex teaching hospital whose mission is to provide the highest levels of specialty care is unlike any other health care provider in the state. Therefore, it is not particularly responsive to the needs of lower-cost primary care providers in the community, nor can it prioritize their needs over its own interest.

This should have been obvious when the Medicare and Medicaid contract was being considered, and I understand that Senator Bernie Sanders had similar concerns about potential conflicts of interest when he created the Federally Qualified Health Center program. Therefore, none of the FQHCs that provide essential services to rural communities can be owned by a hospital.

The second fundamental adjustment that needs to be made in current reform efforts is to recognize the state’s failure to articulate what the new health care delivery system should look like.

Vermont’s health care system is like an orchestra without a conductor.

Within government there are: the Green Mountain Care Board, the Agency for Human Services with its departments of health, mental health, and access to health care, the Legislature’s Health Reform Oversight Committee, and the Affordable and Affordable Health Care Task Force.

Outside the government there are: public access hospitals, regional hospitals, medical center, rural health clinics, federally qualified health centers, independent mental health organizations, home health, housing, aging and visiting nurses, and private doctors, optometrists and dentists.

Like the various parts of an orchestra, each of these “players” can perform well. But without a conductor, they do not play the same tune, or they play it in different keys or at different tempos. None of them have any concept or responsibility for the overall effort.

The need for these two fixes — OneCare Vermont’s conflict of interest and the state’s lack of a unified vision — raises two critical questions:

  • How can Vermont’s health care policies, strategies, funding and implementation be linked together to achieve lower costs while maintaining quality and accessibility of services?
  • If an accountable care organization is the best means of achieving this goal, who should “own” it and who should be held accountable for its outcomes?

In theory, the accountable care organization approach is not a bad idea, but OneCare Vermont cannot be that ACO, nor can an ACO be a cure-all for cost containment.

Accountable care organizations are essentially administrators of a distribution system. They distribute funds, either annually or through multi-year contracts, across the spectrum of the health care system in accordance with a vision for service delivery endorsed by the public’s elected officials. An ACO could even be part of the executive branch, since there is no reason why funding public health care should be fundamentally different from funding public education or transportation.

Fortunately, the upcoming renegotiation of the state’s current Medicare and Medicaid contract provides an opportunity for the state to start over. Instead of tinkering around the edges of a failed approach, why not—with a popular governor, a progressive legislature, and the capable leadership of Senator Sanders—reengineer the system into a well-planned orchestra and conductor so they can play outstanding music?

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Tags: health care , OneCare , Paul Kendall , Public Oversight Commission , UVM Medical Center

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