Op - Ed

The rubber hits the road on cost containment

In 2014 Vermont launched an effort to bring health care providers together to better coordinate care for patients, reduce unnecessary tests, improve health outcomes, and save money in a health care system that is spending it faster than Vermonters can afford. And guess what? It’s working. Earlier this week we received the year-one results showing that the effort helped avoid $14.6 million in health care costs last year alone.

The truth of the matter is that the rise in health care costs is the single largest drag on affordability in Vermont. Any Vermonter who pays a monthly health insurance bill knows this. Every year, without fail, premiums go up. That’s simply not sustainable, and it’s why I’m so excited by the early success of this effort.

In many ways, what we set out to do this last year is the rubber hitting the road on health care cost containment in Vermont. Vermonters have heard me talk about changing our health care system from one that rewards quantity to one that rewards quality. That means changing the way we pay hospitals and doctors. Currently, medical providers are reimbursed for the number of things they do–tests they run, procedures they perform–not necessarily for making patients healthier. Doctors in Vermont are doing their best to care for their patients, but the nonsensical incentives lead to excessive tests and unnecessary procedures, which drive up health care costs for every Vermonter.

That’s what we’ve been trying to change by moving from the current fee-for-service model to one where we reimburse doctors and hospitals for making people healthy. Last year, Vermont became the first state to try that on a statewide basis with doctors, hospitals, and other health care providers joining together in what are called Accountable Care Organizations (ACOs), which work to coordinate care across providers to help drive down costs and keep Vermonters healthy.

Vermont has two ACOs working with the state’s Medicaid program–Community Health Accountable Care (CHAC) and OneCare Vermont. Together, they helped nearly 1,000 providers statewide manage care for around 40 percent of the state’s Medicaid population, or 64,515 individuals. Through better coordination of care for those Vermonters, OneCare and CHAC were able to avoid $6,754,568 and $7,847,440 in health care costs last year, respectively, for a total of just over $14.6 million.

The ACOs were tracked on measures of health care quality, including patient satisfaction and measures of under-treatment and over-treatment, to ensure that the cost savings didn’t come at the expense of Vermonters’ health. Not only did both ACOs exceed quality performance targets, they actually saw improvements on some. For example, preliminary data show that those Vermonters getting care under one of the ACOs saw a decline in the number of emergency room visits compared to Vermonters being cared for outside of the ACO model. Additionally, both ACOs performed higher than the state average on a measure assessing timely follow-up after hospitalization for mental illness. Those early results are very encouraging.

We’re not declaring victory. The program we launched in 2014 will run for two more years, and we still have a lot to learn. But the initial results are very promising for our efforts to expand this type of model to benefit all Vermonters. Working together with doctors, hospitals, and other health care providers, we’re figuring out how to spend less money while making people healthier. That’s a big deal and is something happening nowhere else in America.

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