Paul Kendall: Health care reform must be reformed

This commentary is from Paul L. Kendall of Braintree, a retired business and nonprofit executive. He served as a director or trustee of several Vermont healthcare organizations and participated in the 2015-2016 discussions that led to the designation of OneCare Vermont as Vermont’s sole responsible healthcare organization.

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

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

The second admits that the government entities and legislative committees tasked with overseeing and directing Vermont’s accountable care organization lack the cohesive leadership, vision, and political will to do this work.

These are not new ideas. Concern over rising health care costs led to the Public Oversight Commission under the then government. Jim Douglas to observe in 2007 that:

• The system (of authorizing annual cost increases) continues. Hospitals tend to add programs and services, requesting price increases to cover revenue shortfalls and maintain operating margins.
• Hospital strategic plans do not adequately reflect planning for risks (downsides) or alternative scenarios.
• The HRAP (the state health resource plan) should be updated to reflect a clear vision of what the delivery system should look like in 2020.

Nothing happened in response to this report until Governor Peter Shumlin proposed his single-payer plan and then, after withdrawing it, sought approval for the current experiment being conducted by OneCare Vermont. A five-year contract with the Federal Center for Medicare and Medicaid Innovation was then signed and went into effect in 2017.

Unfortunately, as recent articles in VTDigger have documented, the results of this five-year effort have been worse than disappointing. Health care costs continued to rise unacceptably; accessibility to needed health care providers has declined; and for many Vermonters, the quality of their care has suffered.

While many factors contribute to these results, one fundamental factor is conflict of interest.

Since its inception, OneCare Vermont, the only responsible care organization in the state, has been controlled by the University of Vermont Medical Center. In its defense, UVM Medical Center, with its related network of hospitals, has Vermont’s deepest bench of health care and management professionals and is the most politically powerful health care advocate in the state.

But a sophisticated teaching hospital, whose mission is to provide the highest levels of specialized care, is unlike any other healthcare provider in the state. Therefore, it is not particularly responsive to the needs of low-cost, community-based primary health care providers, nor can it put their needs ahead of its own interests.

This should have been obvious when reviewing the contract with Medicare and Medicaid, and I understand 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 belong to a hospital.

The second fundamental correction that needs to be made to the current reform effort is to admit the failure of the state to articulate what a new health care delivery system should look like.

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

Within government there are: the Green Mountain Care Board, the Social Services Agency with its departments of Health, Mental Health and Health Access, the Health Reform Oversight Committee Legislative Assembly Health and a Task Force on Affordable and Accessible Health Care.

Outside of government there are: Community Access Hospitals, Regional Hospitals, Medical Center, Rural Health Clinics, Federally Licensed Health Centers, Independent Mental Health Organizations, Home Health , housing, aging and visiting nurses, as well as private medical practitioners, optometrists and dentists.

Like the different sections of an orchestra, each of these “players” can perform well. But without a conductor, they don’t play the same tune or they play it in different keys or at different tempos. None of them have a total effort design or responsibility.

The need for these two corrections—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 execution be linked to reduce costs while maintaining service quality and accessibility?
• If an accountable healthcare organization is the best way to achieve this goal, who should “own” it and be held accountable for its results?

In theory, the responsible care organization approach isn’t a bad idea, but OneCare Vermont can’t be that ACO, and an ACO can’t be a panacea for cost containment.

Accountable care organizations are essentially the administrators of an allocation system. They distribute funds, annually or through multi-year contracts, across the entire spectrum of a health system according to a vision of service delivery endorsed by the population’s elected representatives. An ACO could even be part of the executive branch of government, because there is no reason why public funding of health care should be fundamentally different from funding of public education or transportation.

Fortunately, the impending renegotiation of the state’s current Medicare and Medicaid contract provides the state with an opportunity 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 – rethink the system into a well-planned orchestra and conductor so that they can play exceptional music?