Report: Medical expenses now nearly 20 percent of VT's gross domestic product

The Senate Health and Welfare Committee confirmed Al Gobeille as chair of the Green Mountain Care Board Friday after he delivered a status update on the board's work in 2013.

Gobeille took over as chair in August when Anya Rader Wallack stepped down, taking a lucrative consulting position helping Vermont manage its $45 million federal State Innovation Model (SIM) grant.

Despite the Burlington restaurateur's scant health policy background, his board colleague Dr. Allan Ramsay said he's effectively balanced the economic imperatives of reform with its social mission to improve people's health.

Gobeille discussed the board's annual report, which was released earlier this month, with senators.

The board's mandate is to reduce costs and improve the delivery of health care services in Vermont and guide the state's transition to a universal health care system.

The Green Mountain Care Board has the regulatory authority to approve hospital budgets and insurance company premium rates. It also issues certificates of need for health care construction and other projects.

The board must implement new payment and health care delivery models as part of the Shumlin administration's universal health care reforms. Part of this effort involves improving data collection and evaluating the impact of reform efforts.

The rate of growth in health care spending is trending down in Vermont, and dropped below the national rate in 2011, after being well above average in the previous three years. For 2012 the rate of growth was 2.7 percent in Vermont and 4 percent for the U.S. - though the national trend reduced growth as well.

However, health care spending remains at nearly 20 percent of Vermont's gross state product, which is higher than the percentage for the whole country, and keeping the downward pressure on spending is a major priority for the board in 2014, Gobeille said.


Part of what has kept the growth in costs low for Vermont is the hospital budgeting process, Gobeille said.

Last year, the board gave hospitals a three-year budget target that the hospitals initially balked at. Ultimately, however, hospitals were able to meet budget targets without eating into reserves, he said.

On the insurance rate review side, the board was able to shave more than $20 million off the Vermont Health Connect original coverage rates offered by Blue Cross Blue Shield of Vermont and MVP, Gobeille said.

He plans to reorder the budget- and rate-setting in the coming year. Currently, insurers make rate requests prior to the hospital budget-writing process. He wants to reverse that order.

If an insurer knows what hospitals are budgeting, the company can factor that information into a rate request, Gobeille said.

"We want the hospitals to tell us what the need is," he said, "Then we go to the payer and talk about what they need to raise for money."


On the payment reform side, SIM grant money is being used to help Vermont transition from a fee-for-service model to a pay-for-performance delivery system.

That means providers will be paid for meeting pre-established health care delivery targets, instead of being compensated for performing individual services.

One way that's being done is through Accountable Care Organizations (ACO), which Gobeille described as a voluntary payment program for primary care physicians in which they take responsibility for the health of certain populations.

Medicare is the payer for an ACO that includes Dartmouth-Hitchcock Medical Center and all 14 Vermont hospitals, several federally qualified health centers and rural clinics and hundreds of private physicians and specialists.

Gobeille says ACOs with Medicaid and private insurers as payers are under development, Gobeille said.


The federal grant money will also be used to help launch the state's health information exchange, which is operated by a public-private partnership known as Vermont Information Technology Leaders (VITL), which Gobeille said is expected to be ready in April.

"I think the work that John Evans and his team at VITL are doing has been exceptional in the last year," Gobeille said. "I do not think it was exceptional necessarily prior to that, but he's come a long way in a year."

Evans was named CEO of the organization in November of 2012.

The medical community has high expectations of VITL, according to Ramsay, a Green Mountain Care Board member and longtime family physician.

"There is no doubt (VITL) would reduce waste in the system," Ramsay said, adding that it could also serve as a recruiting tool for doctors. One of the board's statutory mandates is to ensure Vermont is able to retain its health care workforce.

"Most of my colleagues around the state tell me, 'Give me a seamless information system and everything else will come together,'" he said.

VITL also has potential as a springboard for further innovation through companion technologies such as smartphone apps, Gobeille said.

"There are two businesses that have come to Burlington, Cerner and MedaTech, just to pay attention to what Fletcher Allen and VITL are doing," he said.

The bulk of the software VITL is using is actually licensed from another company, according Mike Gagnon, VITL's chief technology officer. However, there are planned software developments that could have licensing or even patent potential down the road, he said.


It will be increasingly important for the board to evaluate the progress of a number of pilots, including congestive heart failure and oncology programs.

"With all innovation, the question becomes what's working and what's not working?" Gobeille said.

Health care consultant Ken Thorpe raised concerns earlier in the week about the rate at which pilot programs that have proven to work are being pushed out across the state.

Gobeille said hospitals and other providers are doing an admirable job of keeping pace with the state's aggressive reform agenda, and he didn't think it would be possible or wise to try to move them out more quickly.


The board is beginning to research the benefit package that will be offered through Green Mountain Care, which lawmakers and the Shumlin administration will develop and present to the board for approval.

There was a push to include adult dental care in the benefit package offered through Vermont Health Connect, and the board has commissioned a study of oral health in Vermont to examine the need for better dental services.

There are bills before the Legislature, S.35 and H.273, which would create a dental practitioner position, which would have a limited scope of practice, to increase access to basic oral health care.

The work that needs to be done to determine the benefits package offered through Green Mountain Care more broadly will be bolstered by the data being collected through VHCURES (Vermont Healthcare Claims Uniform Reporting and Evalulation System), the state's comprehensive - meaning it covers all payers - health care claims database.

The board has statutory authority over VHCURES, but its data is used by a number of state agencies and departments, Gobeille said.


Gobeille expressed concern about Vermont's eight critical access hospitals, which get higher reimbursement from Medicare in exchange for keeping their emergency rooms open 24 hours.

"The problem with that is that some of them do not see many patients from midnight to 6 a.m." he said.

The only way for those hospitals to make money outside the critical access designation is to offer services that might be better performed elsewhere, Gobeille said.

"Maybe we need to pay them more for their emergency rooms, so they don't want to be something that maybe is not in the communities' best interest," he said.


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