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Shumlin outlines 'All Payer' health care cost containment plan

Submitted by tim on

Vermont Business Magazine Governor Peter Shumlin, his senior health care advisers, and Green Mountain Care Board Chair Al Gobeille today detailed how Vermont will seek to transform its health care system under the so-called All Payer Model from one that rewards fee-for-service, quantity-driven care to one that rewards quality-based care that focuses on keeping Vermonters healthy. That transition caps off years of work that will enable Vermont to address rising health care costs that are squeezing the budgets of families, businesses, and state government.

“From Day 1, reforming the way doctors and other medical providers are paid has been a priority of my administration,” Shumlin said. “This is the only way we will curb the rising cost of health care that gobbles up money faster than Vermonters can make it. Today is the beginning of the rubber hitting the road on cost containment. Our success will mean better health outcomes for Vermonters and the end to health care costs rising faster than our economic growth.”

The fee-for-service health care model is over 50 years old and was designed to treat acute medical conditions that required a single visit. Today, treating people with chronic diseases account for 86 percent of health care costs, according to the Centers for Disease Control. The disconnect means that doctors are governed by a payment system that does not address the needs of patients, a situation that results in Vermonters receiving care that is expensive, fragmented, and disorganized.

The All Payer Model seeks to change that by enabling the three main payers of health care in Vermont - Medicaid, Medicare, and private insurance - to pay doctors and hospitals in a different way than they do today. Instead of paying for each test or procedure, doctors and hospitals will receive a set payment for each patient attributed to them, shifting the financial incentive from running tests and procedures to keeping patients healthy.

The heart of the proposal is to keep health care costs below the growth of the general economy. The terms outlined today propose a statewide health care spending target for all payers in the health care system of 3.5 percent with a maximum allowable spending growth of 4.3 percent for the next five years. The financial cap is set approximately 1 percent higher than Vermont’s economic growth as measured by gross state product over the past 15 years.

Along with spending targets will be quality ones that ensure Vermonters not only spend less but see better health outcomes. The three goals included in today's proposal are: increasing access to primary care, reducing the prevalence of and improving the management of chronic diseases, and addressing the substance abuse epidemic.

Under the All Payer Model, Vermonters will continue to see the doctor or heath care provider of their choice. Vermonters on Medicare and Medicaid will see no change to their benefits. In fact, Vermont proposes to expand Medicare benefits to seniors, including:

· Services at home for seniors in through the successful Services and Supports at Home (SASH) program by expanding the program statewide

· Addiction treatment services through the Hub and Spoke program

In addition, Vermont proposes to maintain Medicare's participation in the Blueprint for Health medical homes and community health teams, which is set to end in December 2016.

“For Vermonters, our innovation will mean not only a health care system that is more affordable but one that better meets their needs,” Gov. Shumlin said. “We will restore the family physician’s rightful place in Vermonters lives, ensuring they have someone to turn to when they get sick and a partner in keeping them healthy.”

Lieutenant Governor Phil Scott today issued the following statement on the Green Mountain Care Board’s release of the All Payer Model term sheet:

“Rising healthcare costs are a contributor to the crisis of affordability working families face. Vermonters need a health care system that contains costs, provides universal access and improves our overall health.

“The Green Mountain Care Board is undoubtedly aware that Vermonters are justifiably skeptical about state government’s ability to make and implement substantial policy decisions of this magnitude. The single-payer discussion went on for far too long, Vermont’s health care exchange is still dysfunctional, and plans are still unaffordable for too many.

“On an issue of such significance and given the vast amount of details involved in the All Payer proposal, there are many questions that will need to be answered. Here are a few that come to mind:

  • How will cost savings be achieved in an all payer model, who will measure the savings and how will any savings be returned to Vermonters?
  • How will an all payer model preserve every Vermonter’s access to the hospital, doctor and other providers of their choice?
  • How does an all payer model preserve access to all the services currently covered by Medicare?
  • How will an all payer model impact Vermont’s ability to retain and recruit the nation’s best health care providers?
  • How will state government meet its obligations in an all payer model given the ongoing struggles in managing Vermont Health Connect and the state’s Medicaid program?

“Given the failed experiments of the last several years, effective leadership will be essential for an all payer model to work for Vermonters. I am pleased the Green Mountain Care Board is bringing detailed information forward on the All Payer Model; it is imperative that we have a transparent statewide discussion,” Scott said.

The Administration today released a draft term sheet that sets the basic outline for how the state will implement the All Payer Model, including the legal authority of the state to enter into such an agreement, the federal waivers necessary to facilitate the transition, and a plan for data sharing and evaluation.

The state is finalizing negotiations of the terms of the All Payer Model with the federal government. Attached are general information on the All Payer Model and a draft term sheet.

SEE:

All Payer Model

Vermont CMMI All-Payer Model Term Sheet

One-Page Outline All-Payer Model Term Sheet

State of Vermont Proposes Term Sheet to Centers for Medicare and Medicaid Services (CMS)

  • The Legislature directed the GMCB and AOA to explore an all-payer model with the Centers for Medicare and Medicaid Services (CMS), resulting in a term sheet proposed by Vermont.

  • The proposed term sheet describes the basic policy framework that would allow Vermont’s health care providers, payers, and the government to operate an all-payer model.

  • The proposed term sheet does not bind the state or federal governments.

Another Step Towards Value and Away from an Expensive and Fragmented System

  • The proposal is for all payers to approach health care payment in a common way that rewards the health care system for providing high value care.

  • Aligned payment creates powerful incentives for new partnerships across the care continuum that make health care more affordable and improve the health of Vermonters.

  • The state agrees to coordinate Medicaid and commercial insurers, and commits to financial targets and quality goals, and in return the federal government allows Medicare to participate in Vermont’s system.

Medicare Beneficiaries Will Receive All the Benefits for Which They Paid

  • Medicare beneficiaries will keep the benefits, care, covered services, and choice of providers under the all-payer model. The State is seeking to expand benefits for seniors.

Statewide Financial Targets Will Make Health Care More Affordable

  • The proposal aims to make health care more affordable by bringing health care spending closer to economic growth. The term sheet sets a 3.5% spending target and 4.3% spending cap, with a commitment that Medicare will grow more slowly in Vermont than nationally.

Covered Services Build on Vermont’s Health Care Reform Progress to Date

  • Financial targets are based on health care services in Vermont’s Medicare, commercial, and Medicaid shared savings programs today, mostly hospital and physician services.

Proposal Focuses on Quality, Seeking to Create a Healthier Vermont

  • The State is proposing three ambitious population health goals: increasing access to primary care, reducing the prevalence of chronic diseases, and addressing the substance abuse crisis.

  • The GMCB will continue to hold ACOs financially accountable for a set of quality measures.

Seeking Additional Investments in Vermont’s Health Infrastructure

  • The State proposes to expand the Services and Supports at Home (SASH) program, which has a track record of saving money while keeping seniors in their home and out of hospitals.

  • The State proposes that Medicare participate in the Hub and Spoke opiate addiction treatment program.

  • The State proposes to continue Medicare participation in the Blueprint for Health, Vermont’s nationally-recognized initiative transforming primary care.

Committed to Creating an Integrated Health System

  • The State will continue to work with existing mental health, substance abuse, and long term services and support providers to determine the best path forward to create an integrated health care system.

PHOTO: Courtesy Gifford Hospital, Randolph.