Governor Shumlin, GMCB Chair Gobeille announce steps to slow rising health care costs

Governor Peter Shumlin and Green Mountain Care Board Chair Al Gobeille announced today the launch of two new “shared savings programs” for Vermont health care providers. The programs will help Vermont move away from the fee-for-service model, and instead provide incentives for groups of providers to work together, improve outcomes for patients and reduce health care cost growth. These changes are central to Vermont’s efforts to usher in Green Mountain Care, a value-based system where every Vermonter has health care simply because they are a resident of the Green Mountain State. Shumlin hopes to have this universal health care plan operating in 2017.
“The health care system we have today is spending money faster than Vermonters can make it,” Shumlin said. “Today we’re taking an important step to change that. Rather than paying providers to run more unnecessary tests, we’re going to pay them to make Vermonters healthier. It’s a common-sense idea that is integral to our long-term efforts to control skyrocketing costs and ensure the high quality of Vermont’s health care system.”
The state is soliciting participation in the shared savings programs from both insurers and provider groups. This will allow organized networks of health care providers to keep a portion of savings achieved through better coordination of health care, if the providers have sufficiently high scores for the quality of their services.
The effort involves two programs. One will be launched by insurers offering plans through Vermont Health Connect. Blue Cross and Blue Shield of Vermont has already signed agreements to participate. The other program was launched by the state’s Medicaid program, which provides health insurance for low income and disabled Vermonters. All told, the two programs could involve more than 2,500 health care providers in Vermont and New Hampshire. Vermont is the first state to launch such programs on a statewide, all-payer basis.
“This is a potential win-win-win for payers, providers and patients,” said Chair Gobeille. “Insurance ratepayers save money. Taxpayers save money. Providers don’t lose as much revenue as they would if we just cut payments, and they have an incentive to be more efficient. And Vermonters get better, more organized care.”
Todd Moore, CEO of OneCare Vermont, one of the networks that elected to participate in the programs, said this marks a critical shift for providers.
“Currently, if we save a dollar, we lose a dollar of revenue. We all know we have to curb cost growth. The shared savings programs should help cushion the blow to providers, encourage us to organize for better care delivery, and monitor our performance to make sure there is a benefit for patients.”
Two networks – OneCare Vermont and Community Health Accountable Care – have elected to participate in the Medicaid shared savings program, while those two networks and an additional one – Vermont Collaborative Physicians – will participate in the commercial insurer program.
The shared savings programs will track total costs of care for patients covered by the insurers. If actual costs of care come in below the level expected, the provider networks will retain a portion of that savings. The provider networks will be tracked on more than 25 measures of health care quality, including patient satisfaction and measures of under-treatment and over-treatment. The networks will not be eligible to share savings if they do not achieve minimum scores for the quality metrics.
Both programs were designed with input from a broad array of stakeholders and will be overseen and evaluated by the Green Mountain Care Board. The programs will run for three years.