Vt. project aims to cut health care costs
By Peter Hirschfeld
Vermont Press Bureau | October 06,2013
MONTPELIER — The launch of the state’s new online insurance marketplace last week has temporarily sucked the oxygen out of the debate over health care reform in Vermont. But as the public gaze turns toward a website designed to help people buy insurance, work continues behind the scenes to limit the price Vermonters will have to pay for it.
And later this month, state officials will launch a three-year, $45 million grant-funded initiative that aims to redefine the scope of the health care industry and reduce costs in a sector that now accounts for about one-fifth of the state’s gross domestic product.
Vermont is one of only six states nationwide to land a federal State Innovation Model grant. The SIM money is meant to incubate nascent health care initiatives whose successes might eventually be repeated elsewhere.
As the Centers for Medicare and Medicaid Services explains it, Vermont will “develop a high-performance health system that achieves full coordination and integration of care throughout a person’s life span, ensuring better health care, better health, and lower cost for all Vermonters.”
To accomplish the feat, a team of more than 200 doctors, hospital administrators, state bureaucrats, information-technology specialists and human services workers, among others, will try to fuse together a patchwork of health-related fields whose failure to communicate effectively has made for an inefficient delivery system.
“We are talking about a health system that is terribly fragmented and lacks the integration we have all talked about,” Mark Larson, commissioner of the Department of Vermont Health Access, told a panel of state lawmakers last week.
“The reality is different folks are in charge of different pieces, and in terms of creating real structural reform in how the system operates, we need the different people with control over different pieces to try to work together.”
The three-year grant builds off a foundation years in the making, wherein teams of providers — from doctors and nurses to counselors and nutritionists — assume collective responsibility for all aspects of an individual patient’s care.
The so-called “Blueprint for Health,” as the model is known, has begun to evolve thanks to the creation of Accountable Care Organizations, or ACOs, in which teams of hospitals and providers integrate payments and services across the health care system.
Vermont has two ACOs. One includes Fletcher Allen Health Care in Burlington, Dartmouth-Hitchcock Medical Center in Lebanon, N.H., and every community hospital in Vermont. The other includes independent practitioners. An application for a third ACO is pending.
Al Gobeille, chairman of the Green Mountain Care Board — a five-person panel established by the Legislature in 2010 to set insurance rates, approve hospital budgets and oversee payment reform initiatives — says that if Vermont health care reform is a sailboat, the SIM grant “means we just got a lot more wind.”
He says, “It’s the money and the organizing and the influence that accelerates our ability to do things we we’re already working on.”
Examples of existing integrated-delivery projects include an initiative at Rutland Regional Medical Center, where doctors and administrators decided to see if they could reduce re-admission rates for people with congestive heart failure.
The project, which involved 80 patients, successfully reduced the re-admission rate to zero, according to Gobeille.
“They’re able to manage patients once they’re discharged from the hospital either at home or at a nursing home by increasing the skills of providers in those settings,” he said.
At Northwestern Medical Center in St. Albans, meanwhile, health care workers have gone outside the conventional care model to reduce the estimated 8,100 avoidable emergency room admissions at that facility every year.
Richard Slusky, director of payment reform for the Green Mountain Care Board, says the purpose of the next phase of reform is to “scale” those kinds of initiatives, and employ the same kinds of strategies across provider networks to spark more systemic change.
“Ultimately I think it will be in the interest of ACOs to look at these different approaches and say, ‘Well, maybe we can apply them in a broader scale or scope,” Slusky says. “Because if this is a means of improving the quality of care and reducing cost and improving patient experience, we can benefit financially from this.”
The launch of the SIM project will for the first time see the inclusion of Medicaid-eligible patients in the ACO model.
Anya Rader Wallack, former chairwoman of the Green Mountain Care Board who has since been hired by the state to lead the SIM grant initiative, says the expanding needs of Medicaid patients creates an opportunity to bring in components of the social-services network that haven’t traditionally been involved in the medical system.
ACOs benefit financially by reducing costs across a specific population. If they succeed, they get a share of the savings. If they don’t, they could potentially lose money.
Since the cost of care for Medicaid patients might include not only medical procedures and pharmaceuticals but home care, personal care, case management and other services available to the poor, Wallack said hospitals will have a newfound incentive to reduce costs in those areas as well, and, in so doing, redefine what it means to make a patient well.
“It gives us an opportunity to use these payment-reform models to affect much broader integration and much broader change potentially,” Wallack says. “So to me that is the promise of Medicaid, that it actually takes us into some of the other services where we can, as a state, think about how we spend state dollars, and shift money to places where we could get better results for them.”
Reduced costs aren’t the only metric by which ACOs will be judged. Patient outcomes and patient “experience” also will be gauged, according to Slusky, who says there are reliable ways of measuring those variables.
Precisely what form the SIM model assumes is still unclear. The state has yet to decide whether the Medicaid savings program will be conducted under the auspices of an existing ACO, or if it will reconstitute existing ACOs for the project.
The SIM project will also seek to achieve savings among populations of patients who get their insurance through the private carriers Blue Cross Blue Shield of Vermont and MVP.
Gobeille says success will be measured in the size of future hospital budget proposals, in the rate increases sought by insurance providers, and in the easing of the pressure on Vermont’s Medicaid budget.
“The question is will we see payers not asking for rate increases as high, will we see Medicaid budgets come in below the actual target?” he says. “And we have seen that in the last 12 months in the state of Vermont, so some of this work is already having consequences.”