Um, see, I have board members in one o'clock, so we'll call to order the Green Mountain care boards meeting of March 15th, 2023. I'll apologize to all the skiers whose faces are here and hearts are elsewhere, including mine, but it's a beautiful, lovely day. And so I hope people get to get outside today because it's, you know, a jam of jam of a day for weaver monitors. We have two main agenda items today. We have a presentation by our general counsel, Mike Barber on cost sharing reductions. And then we have a hospital budget guidance from Sarah Lindberg, our director of hospital system finances. And we're looking forward to hearing from both of them. I'll turn it to Miss Susan Barrett, our executive director for the executive director's report. Thank you, Mr. Chair. I wanted to announce that we've added a meeting for our next Wednesday, March 22nd at 9 30 a.m. where we will take up the modification of UVMMC's FY 17 enforcement action with a potential vote. So again, that meeting starts at 9 30 and then we'll come back in the afternoon and have our regularly scheduled 1 p.m. meeting. We've also reopened the public comment period for that topic. So please submit any additional comments to us through our web portal and those are posted on our website under public comments. I also, as I have reminded everyone on the for the last year or so that we are taking public comments on a next potential all pair model. The agency of human services and the governor's office are leading those negotiations and the current model. So any comments we do share with our colleagues.  Thank you. We'll take up the meeting minutes from March 8th 2023. Is there any board discussion? All those in favor of approving the March 8th minutes, please say I perhaps I should move move the minutes first share please. Yes. I will second them all those in favor of saying aye aye aye. Aye. The motion carries and the minutes are approved. I'll turn to Mr. Barber. Thank you, Mr. Chair. The record my name is Michael Barber. I'm general counsel at the board and last week the board's contracted actuaries at Lewis and Ellis and I presented a draft rate review policy for your consideration and I'm back this week to see if you want to adopt that policy and if you do to get your vote. There isn't there isn't a lot for me to follow up on from last week. There wasn't a lot of discussion around this but Eric Schulteis at the office of the health care advocate did make a comment last week that I felt like I should probably respond to I believe Eric expressed support for an approach like New Mexico's because it would prevent gamesmanship by the carriers. If you recall New Mexico calculated a CSR load itself and required all the carriers in the individual market to use that load when pricing their plans. We did consider doing something similar calculating a CSR load ourselves based on market wide data but ultimately concluded that allowing the carriers to continue doing the calculation using their own data would be a better approach. It would result in more accurate rates and we were comfortable with allowing the carriers to do this because we only have two carriers here in Vermont. We have a very thorough rate review process and we're keyed into this issue now so I think we can guard against any type of gamesmanship aimed at artificially decreasing the load. For example through unrealistic assumptions about enrollment or induced demand and then just to make it clear the load that New Mexico mandated is quite high at 44% and that's because they made some assumptions that we just did not feel comfortable with. For example they assumed that after they implemented their policy there would no longer be any members enrolled in base silver plans or the 73% AV silver CSR variant because people in those plans would be better off purchasing a gold plan and that's what they would do. On the other hand Texas which is another state that kind of set a CSR load didn't make that assumption. They used total statewide enrollment distribution in the previous year to calculate the load which is why it's lower. Like Texas we didn't feel comfortable assuming that people would necessarily behave rationally and move out of the lower AV silver plans into a gold plan. If that does happen over time the load should increase and premium tax credit should increase as well. But I think we've seen with the reflective silver issue here in Vermont that people don't always behave rationally and we just weren't comfortable doing that. So I'm not an actuary and I'm getting beyond my expertise here but I think you should adopt the policy. I'm recommending that you adopt the policy and I wanted to thank the CA for raising the issue. I was on the fence for some time about this. It feels pretty uncomfortable to do something that is at odds with a position taken by the American Academy of actuaries. But just personally it also seems like an area where reasonable actuaries can disagree and do disagree. What's reflected in the draft policy is less aggressive than what New Mexico and Texas have done. But I think it's more justified and really focused on the rating rules and how those are applied. We have a long history here in Vermont of community rating and equity and fairness are part of our standard of review for these plans. I think the policy is arguably a more equitable and fair way to price plans. And obviously it will help make rates more affordable for a substantial number of people, which is also another aspect of our standard of review and our statutory purpose. So I guess that's where I am on this. Unfortunately, we don't have Eleni on the line this afternoon, but I'm happy to try and answer any questions you have about the policy or the issues. And with that, I'll turn it back to you, Mr. Chair. Great. Thank you, Mr. Barber. I have a couple of small comments that I'll share, but I'll hear from the other board members first. If anyone would like to go ahead, please go ahead. I'll go ahead. I'm supportive of the policy as recommended by our general counsel. I think it does a good job of moving the ball forward on affordability while balancing data driven decision making. So I'm supportive of it. Yeah, I too am supportive of the recommendation. I think the math is complicated and sometimes looks unintuitive. I really appreciate being led through it so clearly by Eleni. I think it's the right thing for us to do. I think it'll help from honors. I'm also supportive. I think it's a step in the right direction. And I appreciate, Mike, your excellent work on this and helping me understand the issues better and Eleni's contribution as well. Yeah, I don't have anything to add to this. I support this as well. I appreciated the presentation last week. I appreciated your comments, Mike, and your thoughtfulness in helping us navigate this actuarial territory. And I agree that, you know, this seems to be an area where responsible actuaries can disagree. And if we can weigh on the side of helping from honors, allow them to get more subsidies. I think we should do that. And so I'm supportive of this draft policy as well. Thank you for, you know, your thoughts and your analysis on this. I'm in alignment with my fellow board members and I support this. Two quick notes that I did have. One, I want to make sure we're thinking about consumer awareness of the advantages of this change. Because it's true that sometimes consumers don't act rational or don't have the information to make these decisions. So I just want to put a plug out there for consumer awareness of this change because it does make a difference. I'd also flag that there is at least potential for increase in total cost of care through increased utilization. But for me, ultimately, that's not a bad thing. People need utilization. They need to see the doctor. And if they can better afford it through this change in policy, it's a step the board can make towards affordability. I also support it. So I was on the fence and I appreciate Mike, your work in L&E's helping us understand these issues really thoroughly because it was complex for me to understand. So thanks for doing it. With that, I'll turn it to the healthcare advocate. Thanks so much, Chair Foster. And thank you, Mr. Barber, for all your work on this. I agree with what board members have said. I think this is a step in the right direction. I mean, I think it's probably just no surprise that we do think that in the future, the board can take a step and go further. Just a few kind of notes for context. What New Mexico did was require consistent and rigorous adherence to the Affordable Care Act insurance rating rules that were approved by CMS. And I think folks have alluded to this, but the New Mexico State Regulator was advised, also advised by actuaries and they carried out the policy change informed by their guidance and recommendations. And actuaries do not agree that their approach is unsound. Put simply, I think this approach really, I mean, it has been replicated and adapted in other states. It's really a corrective measure to ensure compliance with the ACA in a lot of ways. But I think most importantly, it's good to focus on an important focus on what actually happened in New Mexico when they adopted the approach. The sky didn't fall for insurers financially. In fact, in 2021 health insurance collected $300 million more in premium payments compared to 2020. Obviously, New Mexico is a bigger state, but this continues an increasing trend that was uninterrupted from 2013 to 2021. So that's before and during the regulatory change and insurers aligned with the guidance due to clear and consistent rules that were applied by the regulator. So they held firm on it and then the insurers came into line. But I think most importantly is that the number of customers and consumers and high deductible coverage in bronze and other silver plans that decreased by half, which is huge. And this significantly decreased out-of-pocket costs for folks, which is arguably the most important to Vermonters and to consumers. And it's one of the more kind of tangible kitchen table metrics that we have in health policy. I mean, this is a weedsy area for sure. And I want to applaud the board for, I mean, I think given how complex and fragmented our healthcare system is, this is a rare, unfortunately rare, but it's a good thing that we have an opportunity to do some real good here. And I think the board can really directly help consumers if you decide to adopt this policy. And I think really you're weighing a low likelihood of potentially unsoundness in the market that has not been seen in other markets and other states that have adopted this versus the certainty that this would help a lot of Vermonters. So thank you for the consideration and hope that the measure has your support. Thank you, Mr. Pichels. Thank you very much for those really salient points. I appreciate you sharing those. I'll turn it to the public for public comment. Just use the raise your hand function and I'll call on folks. Walter, how are you? Please go ahead. Hey, Ellen, buried in snow here right now. How are you doing? I'm okay. If I was in Montpelier, I could shovel, but I'm here. I'm up in Jericho. Yeah, about five to six inches. I back up the board, the members in the act. I just wanted to wonder how does one define affordability because that's different for various people and what is rationality? And those are the two questions I had. Another observation is that Wendell Potter called the Affordable Care Act, the Private Insurance Self Preservation Act. So it's not surprising when the advocate said that they've profited so much in the last couple of years. That's it. That's it. Great. Thank you. Any other public comment? Mike, do you have the draft policy able to be shared? Yes. Let me just be able to see that. Yes. I moved to adopt the draft policy as displayed by Mr. Barber. I'll second. All those in favor, please say aye. Aye. Aye. The motion carries. And the draft policy is hereby adopted. Thank you very much, Mr. Barber, for your work on this and to the health care advocate's office. Thank you. Next, Sarah Lindberg will present on our Fiscal Year 24 Hospital Budget draft guidance. Miss Lindberg, I think you're on mute still. Are you able to see the slides? Yes. Wonderful. And now you can hear me all as well. Sarah Lindberg, Director of Health Systems Finance here to introduce the proposed draft guidance for Fiscal Year 24 Hospital Budgets. There's a lot of material here. So we'll get through what we can as always. If you require clarification or need to slow down, please speak up. So the agenda today will be just start to review kind of the landscape on that faces the parties in this decision making process and then go over our general kind of overview of the approach for Fiscal Year 24. Walk through some of the budgetary factors and benchmarks that staff recommend and briefly discuss some of the planned analyses that staff intend to prepare for these budgets when they come in. So the hospital sector in the United States is in very, very dire straits. I, you know, just anecdotally, I don't think that it probably has been this bad in most of our working lifetimes. Some evidence of that is that about half of hospitals in the U.S. ended the calendar year 2022 in the red. All three of the credit rating agencies, Moody's, Standard & Poor, and the other one, Fitch, have degraded this or otherwise considered a negative or deteriorating outlook facing this industry. And while, you know, very early signs in 23 are encouraging, at least over calendar year 22, we're still much below where we were or where hospitals had been prior to the pandemic. So I think that the financial hardship out there is real. It's not just in Vermont and that it's an important factor as we think about regulating hospitals in the current environment. Some of the headwinds facing hospitals, not just in Vermont, but in the U.S. workforce problems. So there's an increasing reliance on contractual labor and those positions also are still have significantly higher rates than hospitals had been used to prior to the pandemic. Increasing employment vacancies in a very highly competitive labor market. And there are exits from the healthcare workforce due to retirements and burnout. So we've heard testimony about some of the working conditions facing providers and how difficult that can be to manage. Other expense growth. This isn't unique to hospitals by any means. Consumers are also facing these pressures on, you know, the cost of supplies, insurance, utilities, eggs. Have you seen eggs? Pharmaceutical costs are rising incredibly, you know, and also the advent of new prescriptions that are on high unit costs are starting to roll out. And then capacity constraints and these feel particularly acute in Vermont where our patients are staying longer than historically and that post-acute placements are outpacing the availability. So people are in beds that they normally wouldn't be taking up because there's nowhere for them to transfer to and they cannot be safely discharged. This often has an impact on hospital finance because they may not be able to recoup reimbursements if the state has outpaced the benefit limit. We also are experiencing troubling ED boarding where patients need to hang out there until there's an available bed. There was recently a Supreme Court case in New Hampshire talking about that practice and I know that's an area that concerns all our hospitals. For some Vermont specific data, this is borrowed attributed to the economic forecast for the state of Vermont. The left-hand growth is just indexing employment in the state to 20, I'm sorry, February of 2020. So right before the pandemic hit and where that relative employment stands today. So total employment is about 96% of where it was back in February of 2020. But you can see that healthcare and social assistance is much lower than that right around 93% of where it was back in February of 2020. So the loss of workforce in Vermont is particularly acute in this industry only outpaced by leisure and hospitality. And on the right-hand side, this is a measure of how many open vacancies they are per unemployed individual. And so Vermont is more than double national. So we have a lot more vacancies per an unemployed individual. So it's a highly constrained market and anecdotally, even positions that would be a breeze to fill our standing vacant for a long time. And that's not unique to hospitals. However, the requirements particularly for the skilled workforce there are obviously might exacerbate some of these issues here in Vermont. And here what I have is comparing Vermont to US over time. This is the median a bit of margin. So you can kind of think of that like a total margin, but in a way that tends to focus on the way they're evaluated, particularly for borrowing. So you can see that over time Vermont's hospitals have demonstrated leaner margins than the United States for both our acute care and our critical access hospitals. But you can also see the nose dive that we will be expecting to see in the cost reports when they start coming out for fiscal year 22. So, you know, since 2011, this is the lowest margin that our hospitals have seen for acute care. Like we're going right back to kind of the trend that we were seeing for our critical access hospitals prior to the COVID infusion of dollars. And that's what those upward trends are from 2020 is money from the government to help keep hospitals open during the decrease in utilization. So it's not driven by net patient revenue in the way we would historically think about that. Now on the other side of the coin consumers aren't having it easy either. So this is looking at the growth in personal health care expenditures from 2000 to 2021. As you can see in aggregate that's grown by 263% since the year 2000. And the ones associated with hospitals and have increased by a similar amount as well as the professional services. So if you look at the hospital care and the professional services associated with physicians and clinical care, that's 62% of personal health care expenditures. So while hospitals and hospital expenditures aren't the only thing driving up these values, they certainly are a significant part of it. So it's an important piece of that side of the coin. And when we looked at kind of trying to gauge the affordability of consumers, this graph from Kaiser, the Kaiser Foundation shows what family premiums have changed, how family premiums have changed relative to workers earnings and overall inflation. And as you can see while the premium growth has gotten closer to earnings in recent years, that it's hard to make up for all that lost time in earlier years, but also that for the first time in recent history, just general inflation is greatly outpacing workers earnings. So all that to say that there's a lot of economic pressure on consumers as well. And not only individual patients, but also employers. So this data comes from the medical expenditure panel survey and it's showing how premiums have grown from 2011 to 2021. And so the table shows the current dollars and then an adjusted amount to show kind of what the growth over inflation has been. So in Vermont, again, after you adjust for inflation, the average annual premium for a single employee has grown by 21% compared to 19% annually. However, unlike observed nationally, employers here in Vermont appear to not be passing on some of that increased premium growth to their employees. And so the growth in the employee share has been the same here in Vermont, whereas it has grown at a higher rate nationally. So the growth has been 27% of the employee share nationally. And so that affects employers and therefore it affects what they need to charge for their goods and services. And so we're kind of in an economic spiral here of inflation cost inflation that makes this all very complex. Thanks to the health care advocates to provide some more context about medical debt and the challenges that's causing for Vermont residents. So they cite here the 2021 Vermont Household Health Insurance Survey where 44% of privately insured Vermonters were found to be underinsured. So that's driven by a calculation of how their income compares with their health care expenses. And that's in addition to the approximately 3% who are estimated to be uninsured at that time. And they embarked on a project to get some more qualitative information about medical debt. And so they conducted a survey and found that medical debt affects all of Vermonters, not confined to certain age groups, income levels, or insurance types. This is a problem across the board and that Vermonters also reported that they trust their providers and really want to pay back that debt. But they just feel that they can't due to their financial means makes that prohibitive and that it might lead to Vermonters avoiding to get care that they might need or recommended by their provider because of that fear of incurring expenses that they cannot pay. And then this I think is maybe not directly from the mouths of the survey, but a fair assumption here, but that medical debt and the lack of consumer affordability does challenge the goals of the triple aim, which is great access, wonderful quality at an affordable cost or containing the cost. And so they included a few quotes from that directly and you can see here the words from actual Vermonters. So an 18 to 26 year old insured person from Orange Vermont said, I have taken money from savings and I'm currently working for jobs to pay off medical debt. It's embarrassing to ask for help and to know that you are unable to pay your bills yet be told that you make too much money for help. A 27 to 40 year old uninsured resident of Orleans said my medical debt is the biggest challenge in my life right now and I want to get rid of it as soon as possible. I have to do more. It scares me because the increase in debt is incalculable, but I have to ensure the health of my family. Someone from Chittenden who's insured in the 41 to 60 year old demographic said we worry a lot if we will die sooner than we would if we could have had preventative medical care. I think I remember an anecdote that Dr. Merman shared at a meeting related to that kind of real toll that that might have an insured resident of Chittenden who's 18 to 26. The ding medical debt made on my credit score made it hard for me to secure housing. It left me homeless for a period of time during COVID-19. And finally, they included a quote from a resident of Windsor who's insured in the 27 to 40 year old age demographic saying medical debt impacts my life. No food, no internet for school, no car insurance. The list goes on, especially as a college student that worked full time. You have to choose between the collections calls or getting food. So just putting some context around these decisions and, you know, it affects a lot of people in a lot of different ways. And, you know, we want to be balanced in thinking through that. So kind of turning back to the business at hand with that context in mind, we're currently looking to review and update the historical methods that we've used to regulate hospital budgets. And this current 24 cycle is really intended as a bridge year between the way we use that we have historically done things and the processes we're hoping to start rolling out next year for fiscal year 25. And the goal and I'm very earnest here is really to just start some significant conversations about expense growth and how that looks and understand it better. But this would mean turning away from caps on that patient revenue to looking more at evidence based approaches about hospital expenses. It's also designed to respond to feedback. So Mathematica policy research conducted interviews with you all as well as the healthcare advocate and almost all of the chief financial officers Vermont's hospitals to get some feedback about what we've been doing and some suggested improvements include using consistent evidence based key performance indicators to guide decision making, specifying a standard framework that incorporates appropriate benchmarks. Increasing the efficiency of the process and reducing administrative burden on the regulated entities. I think the first part of that is more for staff and serving the board and making sure that our processes are more efficient for your purposes. And also, you know, like all things treat everybody the same but also treat them as their special circumstance. So how can we kind of consider Taylor's Taylor some aspects of these processes based on here hospital characteristics such as how they're paid by Medicare the resources they have their corporate structure the patient populations that they serve. And so we're not going to solve all that this year but that's part of where some of these recommendations come from. There's my cursor. There it is. And so just a word on trying to align with other payment reform activities. So again, we're trying to understand the changes in budget of revenue that are driven by hospitals expenses. So anytime you're trying to create some sort of fixed budget, you're going to want to know what needs to happen on the revenue and the expense side. So I think that we spent a lot of years here at the Green Mountain Care Board and before the Green Mountain Care Board focusing on revenue and maybe it's time to turn our attention more to the expense side of this. And that I think will really well position us in thinking through some important considerations for developing some of those payment mechanisms and models. But all that to say that we're tracking all of this and doing our best to make sure that all that effort is aligned and that we are all growing in the same direction. So as I previously mentioned, instead of relying on an overall cap on net patient revenue growth, we are recommending thresholds for expense growth based on publicly available data. We also recommend, you know, basing budgets and their decisions on fiscal year 22 actuals versus the approved budgets in fiscal year 23. So we think that this will make some historical problems, especially given the high amount of uncertainty, a little bit more direct and not kind of understanding what's going on. So plenty of work in progress. This is not meant to be exhaustive, but some important issues that we're going to continue to work on in preparation for fiscal year 25 is quality. So we are going to continue to or we recommend that we continue to help develop the hospital quality framework and thinking about how to monitor that across the delivery system. And of course, think about ways to incorporate that in the performance of hospitals as part of the budget regulation productivity. That's one that that's very difficult to measure and we're we need to do a lot of work to try to figure out some accurate and evidence based metrics for this. And so there's a lot of work to do on that front. Patient access is another area where we will include a measure related to patient access in this year's guidance, but we are looking for a broader look at access. So by confining the thinking of access just to hospital budgets, we're only going to see people who showed up and I think that might be giving it short shrift. So I'm also interested in people who aren't seeking care at all and I would recommend considering partnering with another organization to help us get better information on that longer term. Equity is a critical issue. We are seeing a lot of movement and metrics in this area that is already on the docket for the hospital quality framework. But we think that we should start standing up these measures and monitoring them, but thinking about how to incorporate in hospital budgets is going to require a little bit more time to think through. As far as consumer affordability, so unlike rate review, this is not an explicit criteria in a hospital budget review process. However, it's obviously one of the core principles for why the GMCB was created. And so I think determining how it fits into this process also requires some work, but affordability in my mind is much bigger than just a hospital budget. And so I think we just want to make sure that we're not short sighted in figuring out how to incorporate that in an accountable way. In the per capita budgeting as required by statute, so because this is so likely to be so entrenched in kind of some of the conversations on payment delivery reform, we also think that this just needs some more time to make sure it's aligned before implementing it in fiscal year 24, but it's certainly something that we will be tracking and developing in preparation for 25. So after this guidance is approved, we're just going to keep working towards 25 guidance, which will be hard to keep ourselves disciplined about what the rules of engagement will be for each of those processes. But I'll be here to remind us. So again, overall approach, budgetary assumption, thresholds that we establish in guidance. Here's an important philosophical point for the board. So if we do follow this recommended approach, the board needs to determine what it would do if a budget comes in under those thresholds. Would it not tinker? Would it have something to say? And I think that whatever that decision is, it needs to be clearly articulated in the guidance so that hospitals have a chance to understand what to expect. However, I don't think that these thresholds should be limiting and that if hospitals use different factors that they should provide evidence in their narrative and help the board consider how to incorporate or consider those alternate parameters in the proposed budgets. And then as I alluded to earlier, we will have a whole boatload of planned analyses that we will be ready to launch as soon as the budgets come in so the board can expect to have a lot more in their toolkit before the hospitals start talking with us for hearings and deliberations. Alright, so budgetary factors. So again, this is not meant to be an exhaustive list, but this is a encapsulation of things where budgets historically have missed or are educated guesses about what will be most material to the budgets in fiscal year 24. So the recommended parameters would be for labor, utilization, pharmaceutical costs, cost inflation, commercial price, financial benchmarks, known pricing changes for our governmental payers, Medicare and Medicaid, uncompensated care, and up for debate if there's anything else that we think would be important to potentially include here. So, are you ready to get into it? I am. Alright, labor. So labor is obviously a huge factor in these budgets and for those of you that were here last year, that was actually flagged by the economists that it appeared at least based on 2012 data that labor was even more share of the input costs for Vermont hospitals than seen nationally. And so that likely is a testament to relatively smaller hospitals and the fixed costs associated with those. But as we can see, this is comparing how the costs for salaried benefits and wages for Vermont hospitals have compared to the Bureau of Labor Statistics Employment Cost Index. So this ECI is one of the measures that the economists recommended about, you know, the cost that employers face to employ folks and it is broken out by sector. So this one is specifically for the hospital sector, which I didn't flag and I apologize about that. But as you can see over this time that the employer cost index had an average of 7% ranging from 3.3 to 14.4% and a standard deviation of 3.2. And I will flag that that 15% growth from 21 to 22 for Vermont or I'm sorry from 20 to 22 for Vermont is estimated. We're still missing a little bit of FTE data as you'll see on an upcoming slide. But since the pandemic hit Vermont's actual compensation for their staff has increased more than has been observed in employer costs nationally. Part of that may be catch up since Vermont tends to have lower wages and we can certainly provide more analysis about that if it would be helpful but I do think it likely won't change the outcome that this is the probably best benchmark that we came across for this. So the recommendation we have is to set a target of no more than 13.4% growth, which is the average of the two year growth rate plus two standard deviations, noting that that's a per FTE salary and benefit expense. There's a lot of volatility here and there's also a lot of motivation by our hospitals to reduce their reliance on contractual labor so part of the reason for, you know, suggesting a rather high benchmark is to factor in, you know, the hope that increasing compensation at our hospitals would help support the reduced reliance on contractual labor. So here is how that threshold would have performed over time for past fiscal years so up until 2020 almost everyone would have been below this benchmark a little bit more challenging since then due to the aforementioned challenges. So that again that fiscal year 22 round circle is not true it's probably more like here as you can see it tends to be right in the middle of the dots as you would expect for an average so so that's probably more like just above this threshold. The alternative benchmark for labor would be looking at trends in the for direct patient care in the Medicare cost reports. The trade off for this is that this information is only for prospective payment hospitals critical access hospitals do not report this on their cost reports. So you can see how that measure again in two year growth rates as compared from national New England and Vermont and again we see particularly in the last two years in this series that Vermont wage growth has outpaced national and New England. We also see the incredible growth in the contracted labor from 2019 to 2021 at 143% that's labor utilization so this is an area where we're we need some serious work on data and so we don't have great data in this area. So I think that the best data we have is what hospitals report to us it's the most comprehensive and current. However, it also just is hard to kind of validate and so you know we would offer regulated hospitals a chance to help us get that data right. We want to invest the time to improve that but it is a very noisy data set no matter how you measure it. And so thanks to Mathematica Policy Research. This was a method that was suggested again just in this bridge year as we try to improve the data available to us. But essentially you take your gross inpatient revenue so that is reflecting utilization remember we haven't factored in any differences in payment arrangements or cost coverage or whatever you want to call it. We get the average charge per admission and then we use that value to scale for each of these areas which is how we historically have had gross revenue reported so the inpatient outpatient chronic care slash skilled nursing facility swing beds and physician. And note that this would assume that any case mix intensity changes are the same across those domains. I'm not saying that that's a great assumption but it might be the one we're stuck with given again data constraints. And this I don't need to chuckle it's just like this is a very noisy data and so here for each of those domains you can see what the system wide change in utilization look like over time. What the median was among our hospitals and then that last line is called the interquartile range so that's the distribution of the middle 50% of your data. So what is how far apart is the 25th and 50th percentile of that data set and as you can see there's very high numbers again speaking to the volatility in this data set. But you can also see that you know system why we're seeing a lot of negative numbers, you know indicating utilization drops in our system. And so that you know that was true in the raw numbers I was looking at it's not going to be true for every hospital. But all that to say given the data constraints and how messy this all is. You know I turned to the National Healthcare projections which CMS occasionally publishes and they have just published something showing that their accuracy hasn't been too bad nationally now Vermont might be a different story. But they think that the height demand in 22 will start to normalize in 23 and 24 and then start to slow from 2025 to 2030. They do expect utilization to remain especially high for private health insurance though they do think that the 23 and 24 utilization levels are likely to be close to what we're experiencing in 21 and 22 or what we did experience. So all that to say you know I think there's different ways to do this but it might be wise to consider a conservative threshold in utilization and ask hospitals to provide their analysis of why that might be greater. This is an area that's notoriously difficult to predict and so I think if nothing else staff would benefit from learning more about how hospitals approach this vaccine calculation so utilization. Other factors that influence utilization I mean to yell sorry. But patient behavior so people might choose to go different places they might not they might not feel like they have a choice and not go at all. One significant factor that we are sure will hit this year is that the end of the federal public health emergency will mean that the Medicaid benefit. Redeterminations will occur which will affect the market. It remains to be seen how many of those will migrate to the exchange which offers higher reimbursements for hospitals. But we also might see an increase in uninsured Vermonters which would be an increase you would expect higher increases in bad debt and charity care or free care. You also will see demographic changes so as Vermonters move or move their care relationships and age that might have an influence on utilization particularly the type and intensity of the utilization. Service offerings may change that would certainly affect utilization as would staffing levels so if you are down a surgeon or two that can materially affect your utilization so because these are very difficult and very regional. Staff recommend that hospitals use that type of information to help us understand their utilization assumptions versus being prescriptive about any of those particular variables. Pharmaceutical costs so that this is one of the highest growing categories in health expenditures you can see where it's projected to grow again according to the CMS national health expenditure data so. For twenty twenty it was about three hundred and fifty billion dollars which is projected to get more like five hundred and fifty billion by twenty thirty so it's a significant driver not just for hospitals on this also translates to consumers through either premiums or out of pocket costs so you know it's a major area of concern and one I think that is certainly get more and more federal attention and try to address there are provisions in the inflation reduction act related to negotiating prices with Medicare and also when pharmaceutical costs exceed inflation that includes a provision that that that kind of excess profit would be returned to Medicare so it'll be interesting to see if that has any disruptions to this market if we want to call it that. This one's tricky I'm not going to get I'm not going to joke here so this is one of those things we're depending on where you measure the spend or how this is incorporated in hospitals infrastructure in very quite a bit. They you know oftentimes hospitals are both purchasers and suppliers of prescription medication which is not in non prescription medication for that matter. And the way that we currently collect data does not give us a lot of insight into that so you know as we start talking about really revising our data model for twenty five I think that's one that needs special attention so we can get. A better handle on that we also are seeing more and more high cost drugs that is very difficult to manage for payers for hospitals for patients in trying to balance their health care needs with these expenses. I also think that you know the three forty B program is is something that is getting scrutiny federally and historically or in recent years has helped buttress the other operating revenue that are on some hospitals rely on. And so I think that's also another big uncertainty that it's hard for us to predict today. I also think that these are likely to be material to budgets in fiscal year twenty four and we need to bear in mind that these in aggregate these expenses are going to go up not just for price but also kind of the mix of pharmaceuticals they're purchasing and also how many that are being prescribed. So again I think this needs a lot more work for us to do a better job of getting our arms wrapped around but for twenty four I would recommend the producer price index for prescription drugs which as you can see has leveled out to right around four percent since twenty twenty. And so when you actually average it out it comes up to four point four percent again that would be a threshold I recommend for changes associated with price in pharmaceutical costs and if there's other changes that hospitals kind of untangle that for us. Okay cost inflation so when I say cost inflation here I'm really talking about the ones that we all experience as consumers for the purchase of services and goods. I'm not we've already kind of addressed employment growth we've addressed utilization this is meant to be kind of a traditional economic or economists definition. And here I think it's fairly clear based on what the economists propose but that the producer price index probably is the best bet here to try to get a handle on that. And here we recommend a threshold of six percent again that's just the simple average from twenty twenty to twenty twenty two there. Hard to say where where that's going. You know I think most people think it's likely to dampen but how fast and how soon that might hit the hospitals is a different story. They tend to be lagged they tend to get the inflation a bit later. Commercial price this is one where data might be the least helpful. This is really more of a policy kind of consideration in my judgment but I can tell you that for Medicare. So this is how they think about inflation. So if you look at the cumulative growth from twenty two to twenty four as forecasted by the Office of the Actuary Medicare is predicting at 13 percent growth rate. And then for the Office of Physicians just under twelve percent so pretty substantial increases. Again this is going to be more holistic than just price but you know always good to kind of check other criteria. And so one area that I think is helpful to understand the relative commercial prices here in Vermont is the Rand hospital transparency study. And what I've done here in so many numbers that I know will take some time to digest but this is four different areas or I'm sorry. Three different areas but two different looks for inpatient and outpatient care. So relative price is going to be how much did they did these facilities get over what Medicare would have paid. So that's that reference based pricing. So so that looks like Brattle boroughs outpatient relative price is three hundred and twenty five percent whereas copies is one hundred and forty eight percent. So that is the amount above Medicare Z score as I'm sure is somewhere buried in your statistical intro classes from days before is measuring how many standard deviations away from the mean that value is. So this is saying up or down. How does that compare to the rest of the data in this data set. Now it doesn't say if that value is right. It just says relatively where these values lie. And so for the relative Medicare reference based price we don't see anyone you know one standard deviation more than one standard deviation away from the mean. But Copley does stand out as at minus point nine nine as is Mount Uskutney. And then for a standardized price per outpatient service what ran did theirs. I said OK here's what they did. Here's we're going to try to make it apples to apples by using Medicare relative weights and figure out how much they got for each service based on that standardized unit of service. And so this is going to sometimes shocking because you can see that that the standardized price and the relative price don't always even act in the same direction. So there are two different ways to kind of think about this. But here we do see that North country is just over one standard deviation above the mean per outpatient service at four hundred and seventy seven percent. And everyone else you know is within that first standard deviation. When we turn to inpatient we see that Mount Uskutney at ninety four percent of Medicare is at negative one point four per one point four six so significantly below. And we see that Porter is also Porter and Springfield are also more than one standard deviation below the relative inpatient Medicare reference based price than this data set. And then for that standardized price I was actually surprised to see how close to the average. Most of our hospitals looked despite the huge variation in the standardized price per inpatient stay. And so that tells me that there's a ton of variation in this data. So again it's you know relatively we're there but there's just a lot of very variability. And then finally the last column is just that relative price based on Medicare. It's very difficult if possible at all to get a kind of standard unit for professional services. There are a few things you could try but here we just have again compared to Medicare. What what was the reimbursement like for private. And here Mount Uskutney shows is one and a half times above one and a half standard deviations above the average of this data set. And the University of Vermont is at one point four six. So on again about one and a half standard deviations above. I don't know how helpful that is. I'm open to ideas about other things we can look at. I think that this is one of the areas of work that needs a lot of attention. And it's also one that can be a little bit difficult to get data in. And so you know I welcome thoughts and ideas about other options for a threshold here. But I think ultimately again I'm not sure how much the data is going to help guide that policy decision. So as far as key performance indicators we think that tracking operating margin operating a bit margin still specifying which debt service coverage ratios. These cash on hand and average data plant does feel like kind of a good set of indicators to measure to assess financial health but where staff are still working is figuring out some standard thresholds. There is a lot of evidence for relative value. So how are we doing compared to others. We're not seeing a lot of kind of well researched evidence for what those should be. And so we saw some homework there to report back. The University of Vermont in their letter suggested using a blend from the rating agencies and so we will certainly provide that as one option. Obviously that's going to be geared towards your credit worthiness or borrowing ability to borrow so it might not be the most sensical way to think about this necessarily. But it's certainly an option that we will be presenting to you as we finish compiling some some things for you to consider. OK pricing changes. So as always we will be tracking and keeping you apprised of information as it develops related to Medicare and Medicaid reimbursement. But I think what the board needs to think about is if and how that late breaking information would be accounted for in their review of budgets in August. So is that something we should have a process to to apply as it becomes known. Is it something that you're going to want to do conditionally. Whatever that answer might be I think just needs to be communicated and codified in the guidance. So there aren't any surprises at the 11th hour related to that. Uncompensated care. So this this is an area that's going to be again highly sensitive to the redetermination assumptions. And here the kind of policy or decision point for you is a suggestion from the health care advocate that we look at the ratio of bad debt and charity care or free care. And think about if and how that might be codified in guidance or if that's again something that we want to put on the docket for more research as we go into fiscal year 25. And you know it's been you know it might be one way to think about billing efficiency or other kind of measures. However I do think you know giving conversations that this is largely estimated as a proportion of expected revenue and maybe isn't thought of in that way. So the tradeoffs like most things and then anything else. So again we didn't need to be exhaustive here. But if there are other factors that would help a certain hospital tell its story I think we would welcome hearing about that in the narrative. But we think that we've kind of captured in these recommended areas the lion's share of things that would affect the proposed budgets coming in. And then how staff analysis this one got a lot of work to do. So these are the analyses that we're going to be rolling out and we'll be socializing this prior to July 1st. The intent is to make sure that we refine our methods validate the information that there aren't any surprises in what we're looking at. But the things that staff will be looking at is regulatory compliance are filings complete and on time. What is the assessment of financial health. So based on the benchmarks we established in the guidance how the hospitals look compared to those both in their current state and in their proposed budgets. How have historical budgets performed. So here we'll see you know are there any evidence that of you know maybe missing the mark on some estimates for certain expense categories or you know have how well budgets kind of matched actuals knowing that for the past few years. Most of us get a pass as the world has drastically changed. So similar situated hospitals this will be new. This is looking at how our hospitals compare with those with similar characteristics in other states for here we will be relying on the Medicare cost report data. This will be limited in how it can be directly applied but we also think that it's the best we have it for apples to apples comparisons and that there is a lot of meaningful material in there that will be helpful in understanding how our hospitals are performing. And so we'll be looking at things you know such as how does administrative expenditures compare with clinical expenditures. What is you know the case mix adjusted per inpatient discharge look like. You know what is some of the for you know there there's limited quality information in there but you know what about you know the proportion of Medicare deaths that happen so just some some key comparisons again making sure that we are matching hospitals that are similarly situated. Cost and reimbursement variation that's an area where we've done a lot of work over the years so in addition to ran there's the pricing project there's the Dartmouth Atlas. There is the work that burns and associates has done to look at recosting and looking at cost coverage based on the Medicare cost report cost methodology. So just kind of looking at how our hospitals compare relatively to one another. As far as volume and market shared are we seeing evidence of care patterns changing. Are there market shares changing. You know what's market concentration compare like in Vermont with other hospital service areas also you know looking for areas of where there might be relatively low volume that would be a place to look for that. And then you know other data sources would be consulted to really absorb and understand the budget is as filed but you know they wouldn't be designed any other data source would be to further the objectives of these analyses not to kind of introduce new things to measure hospitals on. So I get to stop talking but I want to hear from you think about the work that we have to do so that we can get a full draft prepared and out for us to review next week with a reminder that the guidance must be adopted by March 31. Thank you very much Sarah. I have to make a phone call because some after school is canceled so if we can just take a five minute break that would be great. So we'll come back at like to 10. Thank you. I can start calling on you. I was just going to make a sorry Tom. You can go ahead right here. I'm going to do it this way.  Thank you Owen and apologies Robin. And thank you Sarah. Thank you for all the work you and your team. Laura Matthew Tom others have have put into this. It's a remarkable project that you've undertaken. And it seems like we've made a lot of progress in a year. Still more to go but good. I think this the theme that I've heard you talk about is evidence based regulation and we need data and more information to be able to do that and I really appreciate what you've done. I think the one piece that has come up over and over again and thinking and in conversation with you. The ranges for the guidance that we'll give I think it's fair to expect that in the first few years we'll be refining this. And so there'll be it might take a little while before we are able to nail our acceptable ranges. And I think that that's understandable. I'm really I'm particularly appreciative of the data that you're pulling in from other sources including the Medicare cost report being able to look at expense data as well as the pricing variation from Rand and the healthcare pricing project. Combining those two things we get a chance to find to have some clear insight into what the revenue from the prices is being spent on. And we haven't had that insight previously. And so I think that that will be particularly helpful. And so I just want to thank you for all that you've done. I know it's been some late nights long days and I really appreciate what you're doing. Thank you. So I have a process question first which is are you I'm assuming you're looking for some general feedback today you're not looking for sort of reactions to specific numbers. Is that right. I'm seeing a yes. That is correct. I finally found you. Yeah that's OK. And are you are you expecting that we'll have numbers to attach to each of these that you indicated it seemed like maybe no because there were certain areas where you said you know there's a lot of uncertainty or we don't have good data. And so what I'm trying to put together is like like what are the decision points. What information will we have to make the decision points in addition to what you provide today. And well let's start there. I think I had one other thought but sure. Sure. Yeah. So I would recommend a threshold for each of these areas knowing that hospitals may have other evidence to put before the board for them to consider other values in these areas. However this would I think help us digest and discuss budgetary needs with the regulated entities in a more tangible way than kind of overall NPR. So I think the decision point that I'm particularly interested is so if we have this threshold of hospitals underneath that threshold we're not tackling where they're starting from. What's the board going to do if they don't like where they're starting from. And I think that that's an important due process consideration in this guidance. Got it. So that's in particular what you'd be interested in having us discuss. Correct. Yeah. And if there's any areas where it feels lacking or you feel like we should do more development I'm also interested in that feedback at this stage. OK. And then when so then next week you'll come back with more information on sort of recommendations for the threshold range for each of the points is that kind of the idea. Yeah. We can break those out. We're figuring out that we're landing in one place and also you know the industry hasn't had much time to digest this. So we'll also be getting from them. Yeah. That would be good. OK. And so the part that I'm struggling with a little bit is and maybe this is because I'm used to doing it one way and this is a very different way is I'm at least used to having a general sense of how my decisions are going to roll up and impact not just each individual hospital but also the overall statewide trend. So the way I'm please correct me if I don't have this right. But what I'm hearing you say is we pick these thresholds for different expenses. If they're in that then rolls up to basically a trend from 20 to 24 and gets converted into a budget which would reflect revenue as well as expenses. Is that right. Yep. That's correct. OK. So I think that a little bit of the challenge for me with just saying if the boxes are all checked I'm good is that in the past we have had some issues where hospitals have come in with what we were calling aspirational budgets where they were basically using their expenses to come up with a top line number that they had no possibility of reaching sort of building in a negative margin automatically. And I don't know how to know that if I'm just picking the expenses. So maybe you can think a little bit about that issue because that was a challenge that we tried to correct over a few years with with a number. You know it was more the smaller hospital critical access hospitals. Right. So that's where my head's hurting a little bit today. So if you could just you don't have to respond today. But if you could just sort of think about that a little bit that would be helpful for me in terms of trying to put it all together between now and August. I do have some other questions. But maybe if other people had thoughts about that that issue I should pause and we can kind of stick to a topic instead of jumping all over the place. But whatever you'd like to do. Chair Foster. I think just go ahead if you if you want. All right. Yeah that's what we're here for. And this is helpful to you know especially the newer newer members myself. So please go ahead. Okay. Okay. So hold on. Could you actually pull the slides back up. Please. You betcha. Okay. So yeah. If you could go. I think what might be helpful for me is to just touch on each of the budgetary factors I don't have questions for all of them but it's going to I didn't I didn't do a very good job of writing the slide numbers down in my notes so I think I don't think I have any questions on your suggestions around labor on utilization are so if you could go to utilization. Thank you. Thank you. Um, so one of the this is just a thought and you may have already done this in and it may not really be relevant but in the individual and small group market L and E had done some utilization analysis because some of the mark some of the plans are too small for them to for the carrier to have credible experience and for a number of years they had kind of come up with a 1% utilization factor now. I don't know that that necessarily makes sense because obviously the individual and small group market is only 85000 people and that's for all medical not just hospital but I just wanted to raise it as another potential data point that at least some of us are having the back of our head from prior rate filings. That's where the 2% comes from so. Okay, perfect. Your way ahead of me. Thank you. All right. Now we should go back to the list or to the next topic next utilization pharmaceutical cost. So for pharmaceutical cost if we were to go with the producer price index and we would be yeah the recommendation would be good. Okay. Yeah. All right, I guess I do not have questions about that. I do not have questions about cost inflation. Marshall yes. Yeah, so I need you to walk me through this again. I don't think I totally maybe it's because I'm sick and not at 100% but I did not follow this one. Both if you want to just do both of them that would be helpful and then I. So this is showing the market basket update that Medicare provides which is how they kind of look at inpatient inflation. So again, this is designed to be comprehensive of some of these other factors that we've already covered but just noting that the growth that they are forecasting related to inflation from the fourth quarter of 22 to 24 is 13% and then the Medicare economic index is designed to measure the inflationary growth for physician practices and that they're projecting an 11.72% growth rate. So this is one kind of index to see how commercial prices are comparing with Medicare. Is it perfect? No. Is it publicly available? Is it forecasted? It's one thing that I'm guessing hospitals look at. And do we know specifically for that so Medicare uses this then to increase their prices? It is a factor. They've got a lot of rules and methods and very granular methods that they use related to price but this is kind of one of those executive level kind of indicators of how Medicare is growing. Great. And then here so this is looking at the. I think I get the relative price actually like that is straightforward to me. I think I might have I might have been looking too carefully at the data and missed what you said about standard standardize price. Yeah, so that's saying this is how much was collected from private plans for the facility and then it's weighted by trying to make it apples to apples what was provided based on Medicare relative weights. So it's trying to say like per Medicare standard unit. This is how much they got from commercial. Got it. Thank you. All right, I'm good there. So I guess I guess my question is will you have a recommendation for a range for commercial or. What are you thinking I could use feedback on the types of factors that you feel are important as a regulator to consider commercial price growth from fiscal year 22 to 24 and hospital price. Okay. I can't do I have to think about that one. That's fair. I've been thinking about it for years. Okay. Financial benchmarks. I'm good pricing changes. Yeah, some of the decision point or kind of due process concern is, you know, these things are often rolling out while we're reviewing budgets. So yeah, if we're going to decide to do that as part of our decision making, I think it just should be codified in the guidance. Yeah. Okay. I will also think about that. Okay. Sorry, I don't have anything off the top of my head. And then I think the issue with bad debt and free care just to make sure I understand is that bad debt and free care is typically calculated in the hospital budgets as a proportion of the expected revenue, not necessarily based on what actually happened. Correct. You know, how like, so then thinking about the ratios versus. Yeah, budgeted like how those fit together. Yeah, exactly.  So, you know, it's not to say it shouldn't be, but it's just, you know, there's less kind of evidence in the kind of financial regulation literature on this. Yeah. I guess I would say I have appreciated getting that information through the health care advocates questions in prior budget hearings, you know, understanding that it doesn't necessarily have a direct to the budgeted amount, it still is helpful to kind of understand what's going on with their patient populations. So I would be interested in understanding that just as one person, if other people are. And I think those were my questions. So I'm going to, I think I'm going to be quiet and think about things while other people ask their questions. Thank you. Member Holmes. Yeah. Thank you to you, Sarah. And I'll just say, this is a lot to digest in, you know, in the last hour or so. So I think but because this is a significant departure from what we've been doing for a while. So I some time to think about it. Some instant reactions are I am happy to an approach. I think there's much more data and evidence than we've ever had before. And I think that's going to be really helpful. And I like the approach of to compare performance and allowing us, you know, just a deeper look into the hospitals. Trying to regulate. I like the move away from budgets to actuals as a starting point of looking at in a fiscal year 22. Our analysis of the budgets from actual versus this budget to budget fiction that we've been Oh, and again, excuse me. I also like the movement away from NPR, such a focus on NPR towards expenses. So those, you know, kind of some instant reactions to the process change or the emphasis change. I I have, you know, so as I share, I want to say a share Robin aspirational budgeting. We've we've seen that in the past where hospitals are effectively, you know, creating budgets that they can't meet. How we're going to assess whether the revenue assumptions that come in with a budget whether they're really going to be able to make the margins that based on the utilization, based on the price, throw that out there that I think that's important for us to think about is how we're going to make sure that we're not approving aspirational budgets that will have a negative margin. I I want to think about these thresholds carefully. I need a little bit more time to be thinking about that. I do want to also say that they are all about reasonableness of expense growth. And as you said, Sarah, it doesn't speak to the reasonableness of the base from which these expenses are growing. That a lot of that staff analysis that you put on the last slide is going to speak to some of the reasonableness of the underlying base. I don't know how we then use that data when we use that data, right? Hospital comes in and has met all of the threshold guys growth, but then additional data informs the board that the base is not quite reasonable. I don't know how we're going to that conversation in the in the hospital budget process. So I just want to throw that out there that we're going to see a lot more data than we've ever seen before because of the comprehensive analysis that the staff are doing and giving us. And how do we how do we use that information? Decisions I think needs to be more carefully thought out. So I'm happy to start thinking about that. The couple of questions that I'm one of the slides. I think Sarah, you had per capita per capita. And I totally understand who gets to be counted as, you know, in that per capita. I'm just wondering how we're going to think about and I think you mentioned this factor, but the demographic shifts, right? So the fact that, you know, some areas could be seeing expense growth that are because of population shifts. And other areas are going to come way under our thresholds, but because they're having population shrink, you know, in their areas. And so how are we thinking about changes in demographic changes? Thresholds is another area utilization has done a lot of work on avoidable utilization and potentially avoidable utilization. Are we going to be factoring in any measures of potentially avoidable utilization in our looks at utilization itself? So wanted to throw that in there as well. To answer all these questions, I'm throwing them out there. There's things that are on my list here that I've been jotting patient access. Maybe this is one you can possibly answer patient access. You've mentioned there'll be a measure included in the guidance, but I don't think it was said what that measure was. And I wasn't sure what organization we should be partnering with to do to get at the. Yeah, sure. So I have requested boss to suggest wait time measure that all the hospitals would be capable of producing. It's not an easy thing to measure at a hospital level. So I think that again, that we could use a more comprehensive framework. I also know that there is a proposed federal rule for QHPs for network adequacy, which will have some wait time measures. So seeing how those develop, it's always helpful to have something that has benchmarks nationally to consider. And so, you know, that might be an area to explore as that emerges. But yeah, I think that for me when I think about access, you know, I think about, you know, the people who aren't seeking care, particularly preventative care and kind of getting our arms wrapped around those kind of population based measures. And so I would love to engage with, you know, another agency to kind of provide some objective reports on how that looks in Vermont. That would obviously be an expense to the Green Mountain Care Board, but I think a worthy one. And, you know, lots of potential names come to mind, but I think, yeah, we should probably talk to agencies before I start volunteering them here. But yeah, because I think like, you know, if people aren't seeking care at all, that's just an important consideration in one of the board's charges here.  And so like thinking through that and what portion of that makes sense for hospital kind of performance assessment, I think just needs a lot more consideration. Yeah, I agree. Okay, I think the other one that I'm just still stuck on is, and I guess Robin had the similar questions was the commercial rate and the recommendations there and I, I, and it's going to be the trickiest, it sounds like, and the one that we don't have anything to work with yet. So I'm just trying to figure out in some sense that is going to be the stickiest one to, I think all agree on what is a reasonable range of commercial rate and increases. And I think it to some degree is going to depend on the base again that people that hospitals are starting at, you know, how do we start to think about that. So I feel like you've given us things to think about. And I, I'm sure I'm going to have more questions, which I will happily follow up on, but I appreciate all your and there's so much about this, like the data driven focus, the movement to actuals, the benchmarks, and try a distant way of regulating hospitals that hospitals will understand in advance of our process. So there's a lot to like, and I have to just digest a lot of process questions to work. Thank you. Dr. Merman. Thank you, quit. Just kidding. I don't know. He looks like he dropped. I know he's remote today and then he was having some access issues, not in the medical sense, the broadband sense. Well, I'll go ahead then, and he can chime in if he comes back. A couple of processing questions. If you go through the, you know, thresholds and the increases in costs and utilization, how does it ultimately work? Do we add up all of those things and then that's the amount of money that is budgeted? Is that, is it just a math problem at that point or how does that work? Yeah. Yeah.  But I think that in that exercise, we've largely treated the budgeted expenses as fixed with a solve for the commercial rate. And so this idea would be, well, what does that expense growth look like? And how does that back into your NPR requirements? So the budget would still be for an NPR certain and likely a commercial price amount or rate certain, but we would just be getting there through the back door, so to speak. And are those threshold ranges in the guidance binding on the board? For example, if a range is five to 10%, can the board say no, you know, we think in this circumstance it should be three or 12? So I think that's the question is what the board does if someone submits a budget and all the parameters are below the threshold, but the NPR growth, you know, ends up being a number that's hard to stomach, what the board would do. And I don't think there's a right or wrong answer, but I think it's important that that's addressed in the guidance. Just what the board is going to do in that circumstance as much as we can tell the regulated entities, but you know, when I look, you know, this is the graph that really freaks me out. I think there's just a lot of recovery for our hospitals. And so I hear aspirational budgets and worry about negative margins. I think there's worries about negative margins no matter what in the current environment. And so, you know, that's part in and I think also starting from an actual base instead of a budgeted base will also help mitigate some of that concern. So a lot of this is sort of trend based and there can often be a lag in the data or unforeseen circumstances, for example, take COVID, right? Like that's an easy one, an obvious one that really changed all these numbers. If we had done this approach, heading into COVID, the hospitals would be in a really bad situation because all of a sudden their expenses were sky high compared to what it had been in the two years, four years beforehand. How do we adjust for that? Yeah, so we have a policy on budget adjustments and amendments that hospitals invoke and depending on when it is in the year, it depends on whether that would be a mid-year process or whether it would be incorporated in a future budget year. But I think when acts of God or other major disruptive events happen that often we are offered regulatory flexibility federally and at the state level. Okay, I'll repeat the concerns that others had about the presumption that is baked in that all the the baselines are accurate and we don't we don't know that to be true or not. We all hope that all of our hospitals are operating as efficiently and effectively as possible. But I don't know that we know that to be the case. And I think there should be some discretion to certainly review that and adjust the baseline if appropriate. So I just put in a plug for how do we adjust if need be from the baseline because otherwise these costs are just they're baked in for years and years and years to come. And two other quick ones. One is this concept of affordability. And how does that overlay in all of this. If no one that these increases are fair and appropriate, but no one can afford them. Well, that's really problematic, given our purpose and direction as a board, right. So there has to be some level of understanding what to do about that. And the other comment I would have is, I'm curious about how we consider if we consider the impact that these budget changes would have on the broader healthcare market. We've heard at least people complain and we don't know if it's totally borne out by data or if it's accurate or whatever. But people say that the independence and the primaries have a hard time negotiating and have less negotiation leverage. And if a hospital increase is at a very high level, they're in a more difficult situation. And certainly the independence have a lot of the same headwinds that hospitals have. Yet we don't have a review of their increases and they're not really essentially able to get the increase from their costs. So how do we consider the broader healthcare market in that context. If we consider it. Yeah, I think that's a delicate complex subject. I do think, so in my mind, there's like what we monitor as a regulator and what we apply for a specific service. And so I think that I personally have a lot more to understand about how these things co vary in the evidence before I can expound on that in any helpful way. But to me, and like just shooting from the hip, like I think like figuring out some of these efficiency metrics will be particularly helpful in thinking through some of those market dynamics. And on the cost slide, I forget what number it was. Sorry, no, I think it's slide 35 the commercial price. Could we also consider the commercial prices for various similar services, a basket of them, or whatever is appropriate for what independence charge. Question one and then question two is I think some hospitals would suggest that they use some of their increased commercial price to offset expenses and other areas that are beneficial to Vermonters right. So it's not necessarily the case that because a price is high, it should be reduced if there's some other benefit that we're getting from it. So those are two questions just whether or not we also look at independent prices and also, you know, if there's an offsetting benefit to somebody having a higher price.  We can take those up later Sarah but those are just up my notes and thoughts. Thank you. I'll try to Dr Merman. Yeah thanks sorry I've been having technical difficulties today but hopefully you all can hear me okay. So Sarah I mean, again this is like such a heavy lift with you and your team and I can't thank you enough for, for going through this process and and I think this is, I agree a first step towards a bigger review of the hospital budget process, having not been through the process before like Robin and Jess and Tom. A lot of this is theoretical to me, although I've, you know, watched a lot of prior hearings and thought a lot about it so anyways that's sort of my general caveat and thoughts about it. I'm going to bring up this interesting question, which I, and you asked for our ideas but actually since you say you've been thinking for a while I love your ideas on it which is. So, and I guess I'm going to precede that with this idea that would really be helpful to me is actually to run through three or four different hypothetical examples and put them through this through this, this process and sort of see where we where we are and how to think about those. But if we were to put a hypothetical example through this budgetary process and, and have one that was way under thresholds, you know what, what, you know, you asked us what what what our thoughts on what we should do with that budget but what are you having thought about it a lot what are your thoughts and what we should do with that that budget. I think that that at a minimum trying to think through some of these price and utilization changes by some major buckets in patient outpatient professional other that is very helpful in terms of that is you know how the negotiation with the commercial insurer will work versus just an overall change in NPR or an overall change in charge on is maybe not as actionable for that dynamic so I think right there that that's a win. I think, you know, an overall aggregate change is hard to interpret. There's a lot of ways to get to a margin and so you know commercial price is a very high level indicator and so one of the fundamental kind of essential that I grapple with is, you know, why do we care about reimbursement variation as a regulator and and and what about it do we think needs regulating. So we might have high prices, because there's high costs because it's a very difficult area to access so it feels like perhaps a necessary expense. And then there might be prices that are high because of incredible leverage in a negotiation and just looking at data you can, you know, tease out some of that but it isn't there are, you know, I would just say that there's a lot of silver bullets here. The price, you know, yeah. And then, you know, there's all these. Yeah, okay, I'm sorry. But I guess I'm trying to get to understand this so say, say we have a hospital that has done a really great job with figuring out how to manage their labor costs and their labor costs come in under. And they've been able to figure out how to negotiate really well pharmaceutical costs that pharmaceutical costs come under. And in a sense, you know, and their utilizations right on target, and you know, maybe they're out maybe they've improved their access maybe their utilizations over target but like, how do we reward? I mean, I guess in a sense like what I would want to do is try to figure out how to reward an organization for being operationally efficient and, you know, and and putting a great operational processes but like how do you do that hospital budget process, you know, like, is that maybe I'm thinking of that wrongly. Yeah, I don't think I mean I don't think it's right or wrong. I think these are like policy questions and you know like valid questions. I'm here to help answer questions more than ask them. But yeah, and I think like that's exactly as we think towards trying to get towards more, you know, set fixed prospective payment. So that's exactly the type of things that we're going to have to untangle and, you know, over time have the less and less luxury of using claims based information to that so that's part of why we need to get our utilization information right. I think we need to figure out the quality, you know, there's all these things that are going to be much more material when you think about kind of a fixed overall amount than kind of the way things work today. And the other thing that I always, I think is really important is that, you know, these budgets go through local boards, you know, we're not the only ones looking at these and you know they're they're the ones that are connected to those communities and you know, I think that some of some of your concerns like I often wonder what the role of the statewide regulator is versus kind of that local control. And I don't know that I don't have a great answer for what that is and probably not the same over time. Yeah, I guess that leaves it. I guess to me what would be really helpful in thinking about how how to work through these and how to think about all these would be would be a few examples. Yeah, you know, drop three or four different hypothetical hospital examples. And just sort of see what, you know, when we put those inputs in what's the output, and then how do we think about that output to consider what that means with regards to a hospital budget. You know, I think, I think I share the rest of the care boards view that you know through this process we're trying to improve access. You know, decrease costs improve quality have a thriving healthcare system in Vermont and, you know, and so how how I guess I'm just trying to put together in my head how we can then take this process. And I think that you've done a great job with this and I think this is really much more impactful than our prior process and it getting towards those goals but I just having a, yeah, I just having a hard time sort of wrapping my whole head around. The budget pops out the other side with a certain number and there's variances above and below these thresholds and we do comparison hospitals and we see that they're, you know, varying in their performance compared to comparison hospitals how we then take that into an actual item at the end of a budget that's either adjusted or not adjusted. Sorry for the rambling comment there but I think I think what would really help for me and I just keep saying this over and over again so sorry about that but is to have some specific example. Yes, we will get that pulled together for next week. Awesome. Thank you so much. It's great. I want to make a suggestion Sarah that might be help. It might be helpful to look at last year's budget submissions and just see if some as you know what would have happened if we had applied some of these thresholds to last year's budget process a couple of sample hospital way to make that hypothetical actually come to life a little bit better. The comment sort of grabbed me is what about rewarding hospitals for operational efficiency if they do really to me that seems like a positive right if they can then invest that money in doing something else. That seems like a good thing right so if they're really really efficient. That's something we want to reward the other thing I just thought of Sarah when you mentioned this. There's changes in hospitals need a modification. They can come in which seems appropriate and like a good good process. What happens on the other side if let's say just hypothetically a surgical group leaves and all of a sudden they can't do any of those surgeries does is there a modification the other way as well. Yes there is and we also have requirements for what we call provider transfers so if a practice were to join or leave a hospital on that might be a reason that a budget would need to be amended mid year. Okay, thank you. I appreciate the attention you've given, especially myself and Dave as new members learning this process. Alternate your advocate. Thanks much chair poster. Thank you Sarah and the team for all your hard and thoughtful work on this. We're supported the guidance and being a health policy nerd like myself. I can honestly say I enjoyed the opportunity talking with you about it and the opportunity to learn from each other. Sorry, that's my dog yawning. That's a very embarrassing sounding sound. And we look for we think this is a step in the right direction. I mean, I think you framed it rightly Sarah as a bridge year. And we definitely support streamlining the hospital budget process to collecting more actionable and standardized data. I think as members have said, this suggested switch to more actual data I think is a welcome one one that we definitely support. A few brief comments I just want to make. I do think that there's a need for the board to consider some type of consumer ability to pay some affordability measure. This is tricky. I mean, folks talk about the affordability index a fair amount. I'm a little bit wary of indices because they don't always account for regional and state specific variation, but. There's one place for the board to consider and there's also out of pocket spending medians and the IRS has an ACA affordability test. So I mean, these are some ideas that I'm sure folks have thought of, but I do think this is important to at least try to capture it and recognize that's like all metrics are imperfect. I appreciate the discussion on free care and bad debt. I think from the event from our vantage point. It is a measure of operational efficiency. How effective a hospital's billing practices and procedures are, and we are office believes that it should be considered like a key performance in indicator excuse me. Like operating margin or days cash on hand. And I mean the reason we raise this is from actual data that we see over year of a year. The hospitals recuperate very little of these costs and they could have real very real benefit, not necessarily if it's doled out as free care but as patient and financial assistance. Not every person who's eligible, you know, will be paying or will be giving free care. They'll be given discounted care at an 80% or 60% level. So I'm aware of the limitations that that ratio has, but I think that can be mitigated to a certain degree by looking at the trend over time using actual data, which I know is the central part of this guidance. I'll leave it there. I mean, there's a lot of lot to mull over, but thank you Sarah and thanks for the board for the opportunity to comment on it. Thank you. And I'll put it up to public comment via the raise your hand function. Mike Del Treco, please go ahead. I had a lot of prepared remarks and I just sort of put them aside because this is completely new and I understand the work and I really appreciate Sarah and her teams work and reaching out to the hospital community to talk about some of the challenges with the old guidance, the lack of predictability and the sort of the difficulty in measuring some of the some of what's been reported reported and submitted in a budget and then how it is reacted or reacted to and then decisions are made. I've heard a lot of interesting conversation here today. Things that come to mind. So slide six to me. We have a capacity workforce and a financial crisis. And we're talking about sort of benchmarking to national rates I would want to make sure in all of these areas we're talking about benchmarking and winter national rates. How does this relate and trends trends transfer to the rural marketplace. How do we, what does it take to access a physician or recruit a physician versus a larger labor market. What are some of those instances and occurrences look like an affordability discussion that has happened here today. How do we marry affordability with keeping places open. We talked about rewarding typically a reward has looked like a penalty because it's called enforcement enforcement has only been acted by typically reducing rates or taking away opportunity of higher bottom lines. It hasn't been it hasn't been looked at from the lens of we anticipated this result. We didn't achieve the following results. So should we have opportunity to increase when we don't have those occurrences for around our budget or for that matter in this moment we're talking or reward. I think the there's a lot to digest here again. I hope that we have an opportunity to bring this piece of work and information back to some of the experts in this area for feedback. It's a it's an incredible body of work. There's a lot here, and we need to sort of digest this in a way that we can figure out how we manage and work through this. I'd also want to know how do we consider and think about cost or expenses that are truly outside of our control. You know there's these interesting fine lines of labor and the labor market is that in our control is it out of our control. Contract labor is that in our control or out of our control pharmaceutical expenses in our control or out of our control. How do we how do we narrate and think about those items and and what would happen and how would you react to information that an organization brings forward that is contradictory because of their local experience but doesn't have a national benchmark behind it when they when they present to you how would how would those things be evaluated. Typically the coming back in and having a conversation again is not is very difficult to I'll call it win or achieve the desired goal of a hospital getting relief. So those are all things that I think we need to evaluate and think about as we move through through this and and I again I appreciate all of the hard work to narrow to make this more predictable to work together to for all the common reasons that we have. You know we're we're trying to all do the same thing and I understand that so appreciate it and I'll stop there because I think it's a good spot to stop. Great. Thank you very much for your comments. Any other public comments. Walter please go ahead. Thanks Owen. Again I follow all the people that have commended Sarah for doing this I hope she gets a raise I probably would have committed suicide having to go through all these numbers. As I'm not a numbers person but I just have a real common is all these crises we talk about in the budget and everything else are not by osmosis they've been created by the hospital business models. And that the only thing that's exceptional about American health care right now is how complicated it is and how simple it should be. That's it. All right. Thank you. And fortunately for the Green Mountain care board Sarah loves numbers and is wonderfully skilled with them. I can see that work to our benefit. Yeah. Any other public comment. Great. I'm going to release you from the hot seat. Thank you for all this work. I've seen you working very late the last couple weeks and I know it's been challenging so I just want to recognize that and thank you for it. It's amazing to me honestly how often I see staff working really crazy hours because I know it's a lot of work. So thank you for all that effort Sarah. Is there any old business to come before the board. I have some old business to come before the board today. So I thought it might be helpful to give a little bit of an update on the hospital budget. The hospital global budget technical advisory group which has had at this point three meetings. This will be a bit of an informal update for now. We can certainly think about doing a more formal presentation with slides if that's of interest but I thought I just wanted to give people a brief update. So as I said we've had three meetings. All of the presentations from these meetings are on the Green Mountain care board website and I was going to suggest if maybe Christine could link. To that's that part of our site so that it would be handy for folks. The plan is to meet approximately every three weeks between when we started and through November. At the first meeting it was really an introductory meeting where we reviewed the basic components of. In developing a global budget and reviewed what has been done for other states which would include Maryland and Pennsylvania as well as the CMS model. That are out there which are in Maryland Pennsylvania and then there's also a model called chart. Which they suspended but gives you a little bit of insight into their thinking so if anyone wants a primer I would recommend the slides from the introductory meeting. In the second meeting we started to discuss what what types of services should be included in a in a global hospital budget. In both Maryland and Pennsylvania the budgets are limited to inpatient and outpatient hospital services but there was definitely interest in the group broadly. To look at an including professional services and to ensure alignment across the full budget. That's you know obviously in Vermont and in our budget process we do that as well. And then there was quite a discussion about our are there other and I should say that professional services that were discussed our professional services billed under the hospitals. Tax ID number. So again kind of making sure it was connected those services were connected to someone who's employed at the hospital. There was a bunch of discussion around other types of hospital owned entities so as folks may know some hospitals own skilled nursing facilities or dialysis. And while there was sort of conceptual interest in including potentially those types of services there was a recognition that really to understand the dynamics and whether you were creating a positive or negative. Financial incentive you'd really have to delve into each particular type of entity and do a much deeper dive so we kind of put that in a parking lot. I think from my perspective also there's we have to think about if if we do pursue this what is really operationally feasible in year one versus year two versus year three so I think that's another we have time for some of those other services assuming for the sake of my presentation for the moment that we actually would move forward with it which is an assumption not a done deal. There was thought about excluding potentially some high cost low volume services like for example transplants, which is very low volume in Vermont and just at UVM. We haven't made it any recommendations developed yet there but that's the another piece that's outstanding. And then in the third meeting we started to turn to population so of course for any specific hospital they have major payers in Vermont like Blue Cross MVP signal at not. And then they'll have a bunch of smaller payers that they interact with either because someone from out of state use the hospital. Or, you know there are some or monitors who have insurance from out of state employers so there might be a few few folks who work in that kind of a situation so we started to go through data to kind of outline. When does small get too small and what makes sense to. To as a cut off potentially, and we didn't really get to a decision point there that we're going to be coming back to that and meeting for. So that's that's really where we are right now but you can see where we're really delving into the minutiae and the details and I think the slides are very helpful in terms of providing data about each of the points and. And there is a summary of the prior meetings discussion in the next meeting slide so for example. The discussions for meeting one will be summarized at the beginning of meeting two and similarly two and three. So that's my brief update and happy to do something more formal at a future meeting if that's of interest. Great. Thank you very much. I think something formal down the road would be beneficial as we go through the process so we can definitely talk about that. Is there any. I was just thinking about this I'm not really sure the distinction between old business and new business but is there any new business. For what it's worth I picked old business because Sarah had done a presentation about the tag earlier so it was a topic that we had at least discussed so. But other than that I don't know how you pick either. Yeah, it kind of felt sort of new to me but yeah. Is there a motion to adjourn. Second. All those in favor please say aye. Aye aye aye. Great everyone have a nice day and thank you very much.


Hello there!  My name is Melody and I'm the family coordinator and part of the curriculum team here at CESAW. Today we are going to hear from a CESAW employee who is a native to Hawaii. Her name is Cheryl and we're going to listen as she tells us about the wonderful things she does here at CESAW. Aloha Kako! Hi everyone! I'm Cheryl an experienced designer on the curriculum team here at CESAW. I love designing CESAW lessons to empower all students to see themselves and what they're learning. For example, I recently co-wrote a book for the summer learning collection about Queen Liliuokaleni's legacy to show how you can be creative through song, dance, and laymaking. She was the last queen of Hawaii. I also strive to make sure educators and parents are equipped with the necessary instructional resources to help underrepresented youth populations build computer science and 21st century digital skills. I employ human-centered design practices to make sure all learning experiences are equitable and engaging. Wow Cheryl! Students and families are going to benefit from the design work you do here at CESAW. CESAW is definitely more amazing because of you. Thank you for watching. We'll see you next time.