Scott Announces “Global Budget” Healthcare Pilot Program

by Rob Roper

Governor Phil Scott announced at his press conference today an experimental healthcare plan involving roughly 30,000 Medicaid patients in Northwestern Vermont designed to end the fee-for-serIMG_3323vice model of payment. In a nutshell, the plan will set a “global budget” of $93 million to cover the costs of these people’s healthcare for one year – and that’s it! (with, it sounds like, some flexibility.)

OneCare, an Accountable Care Organization (ACO) will run the project “with participation from four area hospitals, as well as Federally Qualified Health Centers, independent practices, and Designated Agencies” under the purview of the Department of Vermont Health Access.

The good thing here is that this is, at least, not a statewide plan. We can watch and see if the canary in the coalmine drops dead. (Hopefully only figuratively.) But there are some red flags to keep an eye on.

None of the speakers from the Governor to HHS Secretary, Al Gobieille, to the doctors present could or would really define what success would look like after the pilot year is up. What signals that we should ramp up statewide or, conversely, pull the plug?

The big worry with any global healthcare budget is the incentive to ration service, like we see in Canada. If providers get to keep a portion of the budget that they don’t spend, the incentive is to not spend money caring for patients. The doctors argue that such short term thinking would lead to long term loss as withholding early preventative care ultimately results in a sicker more costly patient. Unless the patient dies, leaving all the money on the table.

Another attempt to allay any fear of neglect made was the idea that everybody participating in the program is “altruistic” and “we care.” I’m sure they do, but if that’s the case and you’re immune from financial incentives inherent in the system why aren’t you providing preventative care already?

Also worth consider is that the 30,000 Vermonters identified to take part in this study must be notified and they have the option to not participate. You have to be a willing guinea pig! Will this lead to self-selection on a meaningful scale affecting success or failure? Will the folks who expect a lot of medical bills opt to stay with fee-for-service, or vice versa? Or will everybody just say “Screw that! Count me out!” We’ll have to see.


{ 2 comments… read them below or add one }

Martha Stretton February 10, 2017 at 11:47 pm

And the big question is who WILL define what success looks like? My guess is it won’t be the patients. It will be someone looking at numbers in an office far, far away.


jim bulmer February 16, 2017 at 2:42 pm

At least we’re trying to find answers on a lower scale before we blow blow thousands of tax payer dollars. As for the means of measuring the merits of the proposal, I’m sure that can be worked out.


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