Rival Vermont hospitals join statewide ACO

The two big academic medical centers serving Vermont, often seen as rivals in the past, announced Friday they are joining forces with 13 other Vermont hospitals and health clinics to form a new accountable care organization — OneCare Vermont — to focus on efficiency and quality in healthcare.

"OneCare Vermont represents a huge shift in medical practice in Vermont," said Dr. John Brumsted, president and chief executive officer of Fletcher Allen Health Care.

The Patient Protection and Affordable Care Act called for the creation of such ACOs, which are designed to change the way doctors and hospitals are paid. Right now, most healthcare is done on a "fee for service" basis, meaning that more procedures mean more income for the provider.

An ACO sets a budget target for caring for a certain population over the course of the year. The provider has two goals: deliver care that meets a series of 33 quality indicators — things ranging from patient satisfaction to answering yes to questions about whether certain preventative health steps were taken; and hold costs down. If the ACO can come in under its budget target, it gets to share in the savings.

Friday's announcement followed approval of the new ACO and 105 others by the CMS. OneCare will include the providers delivering care to 42,000 of Vermont's roughly 118,000 Medicare beneficiaries, and officials said it was the first in the country with statewide reach.

"This is the first time that we've been able to arrange for so many hospitals, physicians, and community-based healthcare services throughout the state to work together to ensure that patients, especially those with chronic conditions such as diabetes or congestive heart failure, will be followed more closely by their primary care provider to reduce the need for hospital admissions or visits to an emergency department," Brumsted added. "This means a healthier patient and a better quality of life."

The announcement by Burlington-based Fletcher Allen, a teaching hospital affiliated with the University of Vermont College of Medicine, and the Dartmouth-Hitchcock Medical Center, the hospital affiliated with Dartmouth's Geisel Medical School, was welcomed by Gov. Peter Shumlin, who said it squared with his push for a streamlined, universal healthcare system to serve all Vermonters, who are to have government-backed health insurance by 2017.

"The success of healthcare reform depends on transforming into a more effective, efficient healthcare system," Shumlin said in a statement. "We need our healthcare providers to lead this effort. The OneCare ACO is a great example of how healthcare providers can step up to the challenge, and government can support them."

But when hospital executives Brumsted and Todd Moore, a Fletcher Allen vice president who will serve as CEO of OneCare, unveiled their plans to a Vermont Senate Committee, they got some tough questions from lawmakers.

Some members of the committee wanted to know whether any of the cost savings it's hoped the ACO will achieve will go back to patients in the form of lower healthcare premiums or co-pays. Others questioned whether the statewide reach would lead to a healthcare monopoly in Vermont.

Brumsted and Dr. John Butterly, executive medical director at Dartmouth, said both their institutions are non-profits that are always trying to provide the most affordable care they can.