The Scott administration, led by Agency of Human Services Secretary Mike Smith, is set to begin parceling out $275 million to the state’s health care system. The money, part of the federal stimulus package, is intended to help repair the damage incurred by the Covid-19 crisis. Vermont’s hospitals are slated to get the largest share.
That is a lot of money, and the hope is that it is not used to fill holes, but is used to build us something better. It would be deeply discouraging for the state to write multi-million checks to Vermont’s health care providers only to have the result be a continuation of what we have.
Providers will be able to apply for the money within the next month or so, but Mr. Smith will, and should, require those that apply to show their commitment to a “value-added” approach to payment reform. For hospitals that would prefer the traditional fee-for-service model, Mr. Smith should wish them luck, and give the additional money to hospitals committed in the push toward a capitated payment system, a system incented to focus on wellness rather than sickness.
Vermont is at an obvious inflection point. Our health care system lies in tatters because of the pandemic. It needs the help Mr. Smith is offering. We also know the traditional fee-for-service model is not sustainable. But it’s been difficult to make the transition to the payment reform effort envisioned in the all payer mode run by the accountable care organization, OneCare Vt. It’s an immensely complicated process, and, as a large organization it suffers in its ability to do its work and cheerlead at the same time.
Thus, when Mr. Smith begins writing checks, he, and Gov. Phil Scott, should also make two objectives clear: first, the money goes to the providers who back the payment reform process and, second, those responsible for running the program — OneCare Vt. and the Green Mountain Care Board — need to step up their game. They need to show they are capable of making the payment reform model work.
The carrot at the end of the stick for Vermont is a health care system focused on what’s termed a “compression of morbidity” which means shortening the time people are sick. That means reducing chronic illnesses, which, by definition, are preventable. Chronic illnesses constitute 84 percent of the health care system’s costs. Any systemic reduction results in massive savings. But the focus has to be on prevention, which, in no small part, means an improved performance in primary care.
Prevention is also difficult. It requires a change in culture, which takes time. And it requires a substantial investment of resources.
That’s where the Green Mountain Care Board’s leadership is required. The board will need to be more flexible with our hospitals’ requests for rate increases. The board can’t tell hospitals to cut their budgets and expect them to do what’s necessary to make the all payer model work.
That’s where Mr. Smith’s check writing comes in. The checks go to those committed to reform and the GMCB gives them the flexibility and support necessary to take Vermont to the next level in health care; a place that is far healthier for Vermonters and less expensive.
by Emerson Lynn