Paul Kendall: Health care reform needs to be reformed


This commentary is by Paul L. Kendall of Braintree, a retired corporate and not-for-profit executive. He has been a director or trustee of several Vermont health care organizations and participated in the 2015-16 discussions leading to the designation of OneCare Vermont as Vermont’s only accountable care organization.

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

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

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

These are not new insights. Concern for mounting health care costs led the Public Oversight Commission under then-Gov. Jim Douglas to observe in 2007 that:

  • The system (of authorizing annual cost increases) is self-perpetuating. Hospitals tend to add programs and services, requesting rate increases to cover revenue shortfalls and to maintain operating margins.
  • Hospital strategic plans don’t adequately reflect planning for downside (risk), or alternative scenarios.
  • The HRAP (the state’s health resources plan) should be updated to reflect a clear vision of what the delivery system should look like in 2020.

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

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

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

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

But a sophisticated teaching hospital, whose mission is to provide the highest levels of specialized care, is not like any other health care provider in the state. Hence, it is not particularly attuned to the needs of lower-cost, community-based primary health care providers, nor can it prioritize their needs over its own self-interest.

This should have been obvious when the contract with Medicare and Medicaid was being considered, and it is my understanding that Sen. Bernie Sanders had similar concerns about potential conflicts of interest when he created the Federally Qualified Health Center program. Consequently, none of the FQHCs that provide essential services to rural communities may be owned by a hospital.

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

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

Within government, there are: the Green Mountain Care Board, the Agency of Human Services with its Departments of Health, Mental Health, and Health Access, the Legislature’s Health Reform Oversight Committee, and a Task Force on Affordable, Accessible Health Care.

Outside of government, there are: community access hospitals, regional hospitals, a medical center, rural health clinics, Federally Qualified Health Centers, independent mental health, home health, housing, aging, and visiting nurse organizations, as well as private medical practitioners, optometrists and dentists.

Like the different sections of an orchestra, each of these “players” may 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 has a conception of, or accountability for, the total effort.

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 together to produce lower costs while maintaining service quality and accessibility?
  • If an accountable care organization is the best means for achieving this goal, who should “own” it and be held accountable for its results?

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 an allocation system. They distribute funds, annually or by multiyear contracts, across the spectrum of a health care system in accordance with a vision of service delivery endorsed by the public’s elected officials. An ACO could even be a part of the executive branch of government, as there is no reason why public health care funding is fundamentally different from funding public education or transportation.

Fortunately, the imminent 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 able leadership of Sen. Sanders — redesign the system into a well-planned orchestra and conductor so they can play exceptional music?

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

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