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Is VBC Working? OneCare Vermont Pulls the Plug

Analysis  |  By Marie DeFreitas  
   November 20, 2024

Is this a step backwards in the value-based care movement?

The recent announcement that OneCare Vermont is shutting down at the end of 2025 is raising questions over whether value-based care is truly sustainable.

The Accountable Care Organization (ACO), a subsidiary of The University of Vermont Health Network, aimed to reform how health care is paid for across the state. The decision also comes as the Vermont All-Payer ACO Model (VTAPM), a state-led initiative designed specifically for Vermont, is set to finish at the end of 2025.

As a lead organization in its network, OneCare ran on the state’s all-payer model, which sought to improve how Vermont residents pay for care while decreasing costs. This type of model is part of a federal framework that allows the organization to accept both Medicare and Medicaid payments.

Programs like OneCare contract with insurers to provide lump sums to providers to keep patients healthy, instead of the traditional pay-for-procedure model. About one-third of the state’s physicians are paid under this program.

“Ultimately, this is such a pivotal point in the region’s health care reform journey,” said Abe Berman, CEO of OneCare Vermont. “It made sense, when we talked to UVM and our other board members and colleagues, that it’s the right time for us to sunset this effort and look towards what comes next (for) Vermont.”

Healthcare leaders now question whether OneCare delivered a meaningful impact. According to the Green Mountain Care Board, OneCare spent between $13 million and $15 million on operations per year, including $7 million spent on benefits and salaries. The ACO has faced criticism from the board that it consumed money but hasn’t reduced healthcare costs or quantifiably improved Vermont’s health outcomes.

While the value-based model sought to lower recurring costs for patients through more holistic, preventative care, in the decade since OneCare’s launch, healthcare costs have sky-rocketed.

Medicare and Medicaid spending per enrollee grew 40.8% and 21.7% respectively in the last 10 years, while per enrollee spending on private insurance grew by 61.6%.

OneCare was the only active ACO in Vermont. With its end in sight, the organization will join in the state effort to pursue similar goals under the AHEAD model — States Advancing All-Payer Health Equity Approaches and Development.

The CFO Playbook

Although the program is ending, it helped play a crucial role in stabilizing primary care in Vermont, and provided a step in the right direction towards implementing successful value-based care models.

There are currently more than 1,800 ACOs in the U.S, but healthcare leaders are still unsure how to financially optimize models to both improve care and lower costs. In order to get a better grip on how a VBC shift could work, healthcare leaders will need to collaborate with ACOs to focus on the strategies they know are working, and carefully manage funding to stretch each dollar as far as it can go.

CFOs will need to hone in on specific patient health-related performance measures and continuously update finance strategies where needed. Look at not only the monthly cost per patient, but also smaller metrics like drug costs per patient and surgery costs per patient. A successful value-based care model will also involve more collaboration between clinical and executive roles. CFOs can ask themselves where they can collaborate with clinical staff to work on the organization’s most budget-eating challenges within the care model.

Stay tuned for a deeper dive into how CFOs can financially optimize value-based care for their health system.

Marie DeFreitas is the CFO editor for HealthLeaders.


KEY TAKEAWAYS

Vermont based ACO OneCare Vermont said it plans to shut down at the end of 2025.

Healthcare leaders are now questioning whether OneCare delivered a meaningful impact.

CFOs can focus on a variety of step-by-step initiatives to create a solid understanding and successful implementation of VBC efforts that work for their organization.


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