Paul Kendall: Health care reform needs to be reformed

This commentary is by Paul L. Kendall of Braintree. He has served on or on the board of directors of several Vermont medical institutions and participated in the 2015-16 debate on OneCare, which he designated Vermont as the only accountable medical institution in Vermont. I came to

Those seeking to reform Vermont’s healthcare delivery system need to focus on correcting two mistakes in past reform efforts.

The first amendment is to recognize that when accountable care organizations are managed by teaching hospitals, there are inherent conflicts of interest in achieving the goal of reducing healthcare costs.Currently, OneCare Vermont and the University of Vermont Medical Center.

Second, the government agencies and legislative committees charged with overseeing and directing Vermont’s accountable care organization lack the cohesive leadership, vision, and political will to do this work. I admit it.

These are not new insights. Concern over rising medical costs led to public oversight boards under the government at the time. Jim Douglas said in his 2007:

• The system (one that approves annual cost increases) is self-perpetuating. Hospitals tend to add programs and services, demanding rate increases to cover revenue shortfalls and maintain operating margins.
• The hospital’s strategic plan does not adequately reflect planning for downsides (risks) or alternative scenarios.
• HRAPs (state health resource plans) need to 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 after Gov. Peter Shamlin proposed and withdrew his single-payer plan and then sought approval for the current experiment led by OneCare Vermont. A five-year contract with the Federal Medicare and Medicaid Innovation Center was then signed and went into effect in 2017.

Unfortunately, As mentioned in a recent article on VTDigger, the results of these five years of effort have been worse than disappointing. Healthcare costs continue to rise unacceptably. Access to needed health care providers is declining. Quality of care is declining for many Vermonters.

Many factors contribute to these results, but a fundamental factor is conflict of interest.

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

But a sophisticated teaching hospital with a mission to provide the highest level of specialty care is unlike any other healthcare provider in the state. Therefore, it is unable to specifically align with the needs of low-cost, community-based primary care providers or prioritize their needs over self-interest.

This should have been apparent when the Medicare and Medicaid contracts were being considered, and when Sen. Bernie Sanders created the Federally Qualified Health Centers program, he had similar concerns about potential conflicts of interest. I understand that there were concerns. As a result, none of the FQHCs that provide essential services to rural communities can be owned by hospitals.

The second fundamental fix that the current reform effort needs to make is to admit that states have not articulated what their new healthcare delivery system should look like.

Vermont’s health care system is like a conductorless orchestra.

Within the government are the Green Mountain Care Commission, the Department of Human Services for Health, Mental Health and Access to Health, the Congressional Health Reform Oversight Committee, and the Task Force on Affordable and Accessible Health Care.

Outside of government, there are community access hospitals, regional hospitals, medical centers, rural clinics, federally qualified health centers, independent mental health, home health, residential, geriatric, visiting nurse organizations, and private hospitals. There is a practitioner of optometrist and dentist.

Each of these “players” may perform well, as do various sections of the orchestra. But without a conductor, you wouldn’t be playing the same piece, or in a different key or different tempo. None of them have a concept of total effort or accountability.

The need for these two amendments – OneCare Vermont’s conflict of interest and lack of a unified vision for the state – raises two important issues.

• How can Vermont’s health policy, strategy, funding and execution connect to reduce costs while maintaining service quality and accessibility?
• If an accountable care organization is the best means of achieving this goal, who should “own” it and be held accountable for its results?

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

Accountable care organizations are essentially managers of quota systems. They distribute funds by annual or multi-year agreements across the healthcare system according to a vision of service delivery approved by public elected officials. An ACO may even be part of the executive branch of a government. There is no reason why funding public health care should be fundamentally different from funding public education or transportation.

Fortunately, the state’s impending renegotiation of its current Medicare and Medicaid contracts offers the state an opportunity to start over. Instead of tinkering with the edges of a failed approach, with the competent leadership of a popular governor, a progressive Congress, and Senator Sanders, a well-planned effort to redesign the system so it could play great music. Why not turn it into an orchestra and a conductor?