Okay. It's one o'clock. I'll call to order the Green Mountain Care Boards hearing of March, 27th, 2024. We have one change to the agenda item again. The Copley mid-year budget modification request will be delayed another week. We anticipate taking it up next Wednesday. And we have two other agenda items that we will proceed on, which is the 2025 Hospital Budget Guidance and the One Care Vermont updated benchmarking report extension request. I'll turn to Executive Director Barrett for her report. Great. So first I wanted to share a couple of scheduling announcements. Next Monday, the board will be meeting. We have an executive session planned to discuss the AHEAD model. And that is 9 to 12 on Monday, April 1st. We are canceling our data governance council meeting for April 2nd. And just wanted to announce that in case folks were following that. And then as Chair Foster mentioned, we will be taking up the Copley mid-year rate request on April 3rd. And as such, we have extended that public comment period until April 1st. In addition, for public comment periods, we have the ongoing AHEAD model public comment period. Please share any of your comments with us. We share them with the human services and the governor's office as they are leading that work. And then we are also accepting public ongoing public comments on the work regarding community engagement and hospital sustainability per Act 167. So please share any of those comments. And thank you for all who already have. We also have a review of rates document posted on our website. We'll be accepting public comments until April 7th on that proposal.  And that last one was the affordability standards. Is that what it was? Correct. Thank you. All right. We have meeting minutes from March 20th. I will move approval of the minutes from March 20th. Is there a second? A second. On favor, say aye. Aye. Aye. Aye. Aye. And that's four. Member Walsh was abstaining and he was not here for that meeting. So the meeting minutes from March 20th are approved. I will turn to our director of health systems finances, Elena Barabee, our deputy director of health system finance, Matt Sutter, and staff attorney Russ McCracken for the hospital budget guidance and a potential vote. Great. Thank you for having me. I will share my screen. Please let me know when you can see it. You can see it. And I can't see you. Okay, great. So today we'll talk about, I will review public comment and I'll discuss updates to the guidance and then we can think about a board vote. So we received a number of public comment since last week. We've received some from the health care advocate from the Vermont Hospital Association. I've lumped in some of the comments that you'll see subsequently tagged as from coming from various stakeholders to include also those that came from the CFO subgroup that is led by Vaz that we've been meeting with periodically. There's a public comment from Rutland Regional Medical Center, the University of Vermont Medical Center, Sharon Gutwin, owner of Rehab Gym, and a primary care advisory group we presented. To them last week and got some insightful feedback as well. Okay, I'm here. My internet connection grows for a minute. Okay. Can you still see my screen? Okay. So afforded the proposed benchmark that we discussed last week was a net patient or last time the net patient revenue target of 3.5% above prior year budget in line with the all-payer model agreement. We heard from Rutland Regional Medical Center they'd like to move back to a two-year NPR growth over actuals and then we heard that we'd also like to differentiate NPR growth based on per capita changes. We heard from board members that majority of board members they wanted to stick with this 3.5%. Staff recommended that we work from budget to budget because that allows us to see continuity year over year and I think there's always room with this process to justify overages and to understand that better. So starting with budget to budget is what we had proposed from the outset and that is all for that one. Then there was the commercial rate growth. So we talked about establishing a cap or threshold for 3.4% which is based on the price index plus 1% as of January 2024. We received a consider about some public comment on this topic as well. The HCA proposed an average three-year rolling target based on Vermont real wage growth. This is between 1.5%. We received a comment from Rutland Regional Medical Center about attaching this to CPI for medical care which is around the same but then they followed up to say they actually what they met was hospital services. So this is actually around 6.1% not seasonally adjusted and then UVMMC said they wanted price growth should be all payer not just for commercial and we heard from RMC they would not like to have they wanted to keep the cap in aggregate and not establish payer specific caps. So operating margin we had said that we want it to be greater than 0%. We heard public comment from the hospitals they wanted either between 1 and 2% or greater than 2%. I think greater than 0% is inclusive of these public comments. We just didn't there's not a lot of evidence or basis for kind of establishing a particular threshold or particular amount of operating margin is being sufficient. We just made this kind of condition based on financial sustainability concerns. So then we talked about the hospital budget review measures inventory. So I just want to remind folks that really this measures inventory is about transparency and that in our rule hospital shall bear the burden of justifying their proposed budget and that means it's really around the section 1 benchmarks. So the hospital budget review measures inventory is really a core list of measures that staff would use in analyzing budgets. These are not benchmarks and in the sense that the rule outlines those what the rule is really talking about as a section 1 benchmarks. So I just wanted to remind folks of that. And then I wanted to talk a little bit about the hospital budget review measures inventory. So we did hear back from Vaz on their priority list. I think what you see in their public comment is they are proposing that we do not focus on the section 4 measures of access community data and quality. But that we look at you know certainly the benchmarks the section 1 benchmarks and then in section 2 they have narrowed in but are largely taking most of those measures that we proposed. So we're working with a contractor to build visualizations and will likely not be able to build all of these this year but can you know kind of build that visualization tool. Doesn't mean we won't have access to those numbers. It just won't be in a beautiful package that will take some time to get right. But you know we'll certainly work with stakeholders as we continue to build this out. Some other public comment we received from the PCAD group is to make sure that we're including all the primary care providers. So we had I think noted providers but then didn't list out APRN. So we want to make sure we're including all those very important providers. Operating expense growth and FTE growth for direct patient care needs to be measured on per capita basis. So we think that is a good idea that was recommended by UVMMC and then we would like to explore the nuances of peer group. This was a comment by Vaas. So we look forward to doing that which I think we set up conversations to get us started a couple weeks ago. Can you go back just for one second? Sure. The community data in section four can you remind me what those measures relate to? Yeah so a lot of those data are about kind of what kind of population health and health metrics kind of community needs. You know a lot of those we kind of pointed to existing sources on the Vermont Department of Health website and other websites. Some of those access measures and community data come from the blueprint for health measures. These are all well established measures that that many folks are familiar with. Thank you. So as it relates to the peer groups two recommendations from Vaas were to expand the peer group. So a larger hospital peer group improves the stability of the peer group over time and we would like to or they would like to align peer groups more closely with Vermont hospital characteristics such as rural urban designations and their network affiliations non-profit status etc. And I believe staff believe you know these are you know good goals to continue as we continue this conversation. Some other public comment I wanted to share with you and of course all of these are posted online if you'd like to read in detail but I wanted to kind of summarize what I could at a high level. We heard from hospitals that the guidance is administratively burdensome and that they would like to narrow our focus. So you know I think I took some of the feedback we heard from Board Member Lunge and from hospitals and in this next version tried to streamline some of those opportunities. So we moved our proposed moving patient experience provider satisfaction surveys to off-cycle reporting and moving the Act 167 hospital transformation to a post-budget process. I believe there might be still some language in the guidance that I forgot to remove in the in the outset about about how they are. Hospitals are to discuss this information but I think we can you know if that works with the rest of the board members move this to its own designated process. And then in some of the public comments suggests from Vaas and Rutland Regional Medical Center to ask some questions and this was either through our subgroup or otherwise to report on hospital subsidization of employee benefits for example housing and daycare given some of their work they're working on with the administration. And then drivers of expense growth for which hospitals believe they should be held harmless and this meaning that they shouldn't be accountable. I think some of the examples cited were the provider tax and others. And then Rutland suggests that we remove any questions related to facility fees. Other public comment we received was to further unpack reporting by outpatient. This is something we think is important if we're going to also think about primary care and primary care investment. We did not do that this year but maybe that's something to think about for next year. And then there's there were a series of comments about how adaptive and what's reported in financial statements and audited financial statements don't match with the Medicare cost reports. So this is something that is a little bit of a challenge particularly because our hospitals do not kind of report in a standard way and they do not always share the same accounting standards and rules. And so it's really difficult. I think another reason why we try to triangulate across a number of data sources is because they're all kind of operating on their own system. So it's important to kind of look and have a breadth of information. Some other comments we got in general on the regulatory approach include hospital consolidation. We think that this is not good for patients on a number of dimensions particularly affordability wait times, patient choice, etc. And that we should consider implementing strategies to increase pay parity between hospital independent providers. We also heard from VODs that they do not want us to look at quality in the hospital budget process. So I want to bring up the timeline. So we've kind of had all of this pre-work to today, but it's certainly not over. You know, you'll vote on the guidance, but staff will continue working with hospitals and other interested stakeholders to review and make updates to peer group methodology and to build and kind of share the visualizations for budget analysis. So there's still quite a bit of work to do and then hospitals will submit their budgets in July. But hopefully today we can have a vote this per rule. We really have to have this issued by March 31st. So today would be great if we can hammer out all the last edits that folks want to see. Russ, may I call on you for this slide? Sure. Thanks, Elena. This is just a reminder of what the board would be voting on today. First item is the three benchmarks that the board would be establishing relative to an NPR growth cap, commercial rate caps, and the operating margin, which Elena just went through and we discussed about in some more detail those are the benchmarks established under the board rule 3.202. Those benchmarks are included in the larger hospital budget guidance document. That document also specifies what information hospitals need to submit in their narratives and in their budgets. And that as we've gone through before, the guidance document also includes measures that assist the board with analyzing the budgets that don't meet the three benchmarks noted above. And that's to help the board as the board has recognized that particular hospital circumstances may justify budgets that exceed one or more of the established benchmarks. And then on the next slide we have some potential suggested motion language. Sorry, it's wordy. But if the board or when the board is ready, I think you can take up a vote on the three benchmarks and the guidance all together in one motion. So that's why it's a little bit longer. And I will stop sharing my screen, but certainly welcome any questions or thoughts you have and can go back to slides if you'd like to see them again. Great. Well, thank you. I'll open up to the board members for questions or comments. I just have a couple. Thank you for addressing my comments from the last meeting, Elena and Matt. I appreciate it. On the issue of budget, the NPR applying to budget versus actuals, I think one of the ways prior to the two year actual 8.4% guidance, there had been language in prior versions from prior years. That's where I think we set the three point, we set the NPR target based on the budget, but there is language indicating that actuals would be considered or year to date in the budget decision, which I think would be good to add because prior to that, the problem with budget to budget is over a five or 10 year period. The budget becomes fictional and disconnected to what actually happened. So this was something that we worked towards fixing a few years ago. So I tried to find a prior version of the budget guidance from, I don't know if it would have been 19-2021 somewhere in there to find the exact language, but I think it would be helpful to add to the NPR section, just something indicating that we would consider year to date actuals in the decision making for individual hospitals just so that we don't end up back where we started six years ago. Absolutely. Thank you for that. I'm happy to add that. This is more just a comment on the adaptive versus HICRIS and other Medicare sources of data. I do, this is not for the guidance, but just a comment. I do think that's something that we're going to need to sort out over time to understand how if, now this is a big F at this point, but if the state were to move forward with the ahead model, Medicare would be looking at their own data. So we need to have a better understanding of how those two interact. So that's just a comment that doesn't impact the guidance today, but just something to have on our radar as we're thinking about that. My only last comment is I am a little concerned that the 3.5 is going to be low, because in looking at that slide from last time, it looks like if operating expenses were held flat, that today's operating expenses would exceed a system-wide growth of 3.5. Now, obviously, we do have this expectation that it's a benchmark. People can certainly come in and justify being over that. I think that's something that is always something we have to consider. But because of that fact, the 3.5 seems really unrealistic to me. So I'm a little more comfortable with the 4.3, not going to die on my sword, given that it's a benchmark, but that's my one concern that I just wanted to voice with the 3.5. And I think that's all I have. Thank you. Yes, I can go if nobody else wants to jump in. I really like Member Lunge's suggested language about the year-to-date actuals in the NPR, so I really appreciate that and would like to see that as well. If we're going to be doing budget-to-budget again, I think having that language will be helpful. I thank you so much. I mean, I really just appreciate Elena and the team. I know how much this has been an iterative process and working through and getting feedback from stakeholders. I also really appreciated all the public comment this year and the attempts to incorporate that, either in this year's guidance or in future planning. So hopefully, I won't take too long, but I do have some edits to the budget guidance document, and I know I've seen it before in sent-in edits again, but knowing this was our last pass, there was a couple of things that I just wanted to bring up. On pages 5 to 6 of the guidance, we make clear that each hospital within a network has to submit a separate budget and supporting materials separately. I just want to make sure that this year there's language in there also on page 6 about the budget hearing. I think we should make clear in that language that every hospital within a network should be allocated their own time slot, and that we expect to hear directly from the leadership at each of those hospitals, even if they're within a network. Because last year, the whole network expanded into one big time slot, and I think it shortchanged Porter and CVMC in the hearing itself. I'd like to also hear more directly from the leaders of each hospital in that time slot. Whether it has to be in the guidance or not, I don't know, but there is some description of the budget hearing process, and there's specific call-out to the submissions having to be separate, so I want to make sure the hearings are separate, or at least times allotted. It was actually on page 6, Elena, where there was an expectation that each hospital is going to have to discuss the recommendations from Act 167. If we're moving that off-cycle, that's where that lands, and so that might need to be stripped from that section. Okay, I just, let me see, there was on page 8 on the section about benchmark for financial sustainability, I would suggest replacing the last sentence in that paragraph with hospitals proposing budgets with margins at or less than 0% will be required to explain the key drivers of their sustainability challenges, as well as evidence on hospital efficiency and productivity of resources with the same delineation that we ask for above for hospitals that exceed the commercial growth rate. In other words, just having a parallel expectation for the hospitals that are exceeding the benchmark on commercial rate growth. For any hospitals that are proposing a budget at or less than 0, I would think we would want to see the same thing, and just making that parallel language. I hope that we don't have hospitals submitting budgets less than 0% operating margin. On page 13, it's a line in there that reserves the right for us to use publicly available data not listed in the budget review metrics inventory, and specifically it calls out the Vermont health insurance survey, the CMS hospital compare, and the blueprint community profiles. I actually think we should just move those three items, actually CMS hospital compare has already been moved into that inventory. I think we should move the health insurance survey and the blueprint community profiles into the inventory now. And I would also suggest, I wish I had mentioned this earlier, but the American Hospital Association database, I think they have interesting information that we may want to also consult. But I would just say moving the things that we think we're already going to use into that inventory and just leaving the sentence there as we reserve the right, although I think at this point we've probably exhausted almost every possible publicly available data source that could be consulted, but leaving it in there anyway. Okay, page 15, we talked about this last meeting and I know that language was made about the performance penalties. I just want to make a slight edit to the edits that were made. I think language that specifically asks, has your hospital received any payment reduction from any payer based on quality performance in the last two years? If so, please explain the nature of the penalty, the revenue impact, and steps taken to address the situation. So it says in their payable penalties, I think it actually is more likely to come in a payment reduction. So and I think we should understand the revenue impact of any, if they have occurred. And I was confused about the question that was added, what drivers of expense growth hospitals should be held harmless for? So I'm wondering if you can talk about that. And then I have a couple of other just comments about some of the VAS and Rutland letters, but that was just a specific question that was added. And I wondered if you could talk a little about that, Alina. Yeah, thank you. I added and I think it was in the slides, but I added that in response to one of the public comments we received from the hospitals. I don't know if it's public comment or just some feedback we received from the group, but I think I shared that with you, that there are a variety of, you know, drivers of expense growth. I think we heard this from hospitals in the public comments last time, drivers of expense growth that are outside of their control, such as like the provider tax and other things. So there was a list they had started there, but I thought that it would be important to at least ask the question and have hospitals articulate what drivers they think they can and can't control. I'm happy to accept edits or hear your comments on that. Well, so I guess the assumption is that anything that's not on that list is things that they should be held accountable for. Yeah. I would assume. So I think it, yeah. Okay. Okay. I just wanted to comment a couple. I really appreciated Rutland's thoughtful letter that they submitted. And one of the comments that was made was that establishing a fixed target does not consider the possibilities of substantial increases associated with improved access. And I just wanted to reiterate something that you said, Alina, but that the guidance allows for hospitals to justify NPR that are above the target if they provide evidence of increased utilization, right? We're specifically asking them about to break down their NPR projections on price and utilization. So if, in fact, their utilization is growing because they're increasing access, that's something that we're going to look at and have, you know, an opportunity to evaluate. We're also, this year, I think an addition this year is asking for data on unique new patients, right? We haven't asked for that before. And I think that along with patient migration data that we have done allows us to look at, you know, what's happening with demographic shifts, with access increased. So I just want to say that I think that by establishing a fixed target, it's a target, but we are always going to be considering access improvements and increases in utilization. So I just wanted to mention that. And I also think that to some degree addresses some of UVM's concern about looking at a per capita basis by starting to understand the number of new patients that are seen adding demographic data, looking at our patient migration work, or to some degree will be able to capture better per capita. So I think those additions will help address some degree. I think UVM health network concerns about per capita and Rutland's concern about how NPR targets might exceed, or NPR might exceed the targets because of improved access. We hope that we see improved access, actually, this year, given the access concerns that we have. I also wanted to say in Rutland's letter that actually this is in the VOS letter too, the concern about imposing a unique cap on commercial rate increases across all payers. I just want to reiterate that if there are circumstances that justify a deviation from those uniform caps across payers, the hospitals, I would be open to hearing a detailed explanation. So if there's data and evidence on payment denial strategies and the revenue impact, the hospitals can request confidentiality. They can request a deviation from that uniform cap, but it's got to be justified. We have to understand what the justification is. So I think there's a rationale and a reason for this cap across all payers, but again, give us information about what's happening with payment denial strategies and a justification for deviation from that. Rutland also stated setting a target of 0% operating margin undermines financial sustainability. I just want to be clear and I think you were clear on this, Alina, this is not a target of 0%. It's actually a floor of 0%. So the expectation is that we don't want to see hospital budgets coming in under 0%. I expect hospitals actually will submit budgets with a higher operating margin. They do need to support capital expenditures and they do need to build days cash on hand if necessary. So it is necessary to build those. So I just wanted to say that. And Voss, okay, again, appreciated that. I do support the proposed language changes around the descriptions of the metrics. I support adding the debt service coverage ratio that they suggested. I think that's an important metric. We've looked at it before. It should be included. And I just wanted to say too, and this is to Member Lunge's points about the adaptive and cost reports and understanding that data, I think data validation is going to be key. And I've talked to, Alina and I have chatted about this and Alina, I believe you and your team are very interested and want to do data validation exercises. That's going to happen. So it's going to happen hopefully in the coming weeks as we're building this dashboard. So I just wanted to say that I think it's an important concern. I'm glad they raised it. But as this library is being built, I do, I know I have trust in our hospital budget team that there'll be this will be an ongoing process with working with the stakeholders to vet the data, understand the data, understand caveats with interpretation of that data. So I think that's really important. I agree with Alina. Thank you for saying that we might, you know, look at those peer groups. I think they're important. I'm open to adding other hospitals to that peer group. I would say that I looked at the analysis by Voss and there were some, I think, mistakes in there in the sense that New York has actually included in all of those peer groups that wasn't represented as being included, but New York is being included in all of them. Rhode Island was included in one that wasn't in there. So I think it's more expansive than Voss's analysis suggested. But again, I would be open to the staff mending that peer group to expand more hospitals. And my last comment is about quality quality is always going to be important to me in the budget process. So I don't know how you divorce costs from quality. I am going to be looking at quality. That's part of the reason we want to see if there's any payment reduction penalties associated with quality. I support the 3.5 percent target. I recognize Member Lunge's concerns, but I also agree that I like the language of looking at actuals as well. And again, like I've said, I think it's consistent. I think it's predictable. It's been what we've been targeting more or less over the years tied to this all-pair model. And it allows for deviations if hospitals can support increased access or demographic shifts. The commercial rate of 3.4 percent, using the PCE plus one, I think attempts to try and balance sustainability and affordability. The metric is based on recommendations from the report by the state economists. I took a quick look in the last few days about the producer price index for hospitals. So that's the producer expense side. It's 3.6. So it's in the ballpark of reasonableness of the 3.4. And again, as with all of our benchmarks, if there's evidence and compelling need for deviation, we look at that. So I think this is a really well thought out guidance. I appreciated all the incorporation of the public comments as best we can. And I support it. I'm not going to be as robust as Jess, but I actually essentially largely agree with everything that you brought up and really appreciate your thoughtful comments there, Robin, as well. And Elena, again, you and the team for the presentation. I am in agreement with Jess on the 3.4 percent, 3.5 percent, 3.4 percent commercial, 3.5 percent in PR growth. I think that for many of the similar reasons that Jess has stated regarding the PR growth that, you know, there may be specific reasons that hospitals need to go over this and that could be justified within the budget. But at the same time, we've had very high growth over the last several years. And our growth is not sustainable, at least it does not appear to be. Yeah, I mean, the rest of the guidance I agree with, I think that I appreciate the large number of data sources that you are bringing to us to consider the various components of a budget and hospital's performance. I think it's very important for us to consider things like quality in the context and access in the context of reviewing a budget. So in short, I agree with the budget guidance that's written. I do appreciate the slight adjustment of considering actuals. I think it's very important. And thank you. I also want to express my gratitude, Elena, to you and to the team and I appreciate Robin and Jessica's comments and Dave's. Minor, rather short, I am in support of the 3.5 and 3.4 that are in the guidance currently. I think it's important that, yes, it's hospital budgets that we're looking at, but we also, as a board, need to consider multiple perspectives and the perspective of the ability for Vermonters to pay for these things, I think, has to be also weight in our thinking. And particularly last year, when we kind of looked at our budget process and made some substantial changes, what we saw last year in the budgets was very rapid expense growth and high admin to clinical ratios. So it does appear, it did appear last year and continues to appear that there are rooms for hospitals to reduce their costs. And so rather than always trying to grow by raising prices to meet their needs, there does appear to be some room for reduction in operating expenses. So I think the 3.5 and 3.4 are reasonable. I wasn't here last week, but I understand there was a move to move off cycle, the improvement sections and the quality sections. And when I read over the document and I thought you were quite forward thinking and adding those components, because what we're still doing today with budgets are looking at prices and reimbursement, while also talking about value in care. And when we look at healthcare value, it has nothing to do with prices and reimbursement. It has everything to do with how do we improve outcomes that matter to patients and how much does it cost to make those improvements. So we need to be looking at what are the improvements that matter to patients that has to do with quality safety outcomes. And what does it cost for an organization to achieve that? Which is not the same as a price, which is not directly related to reimbursement. So I think it helps start to move our budgeting process more toward a value world. So I hope that those come back. The difficulty with adaptive and the cost report, this is also true with tax data, the 990s. Those data sources can be there can be wide disagreements. Sometimes even the direction can differ. And so what I hope is that as we move forward, we try to stick as much as we can to uniform measures that are not homegrown or idiosyncratic. Every organization fills out their tax forms and their Medicare cost reports. They try to fill them out to their best advantage. Or you want to get the best tax breaks that you can. And you want Medicare to understand your costs as clear as you can make it. But that process at least has some constraints on it. When an organization gets to make up its own, those constraints go away. And so I really think that it's important that we stick as much as we can to ways that are widely used and understood by the federal government, state government. I think those things are helpful, even though they're not perfect. Those are the only things that I really wanted to express an opinion on. I thought Robin and Jess and Dave had excellent things to say. And I just want to thank you again. The improvement in this process and the guidance and the analysis of finances has been extraordinary over the past two years. And I appreciate the work that you're doing. Thank you. I have nothing additional, really, other than the note about burden. I think if the if the hospital submissions are in compliance with the guidance, it can really be quite a bit slim down in terms of the submission and evidence that you need to justify the budget. So if you comply with the guidance, the burden is quite, quite slim. And I think the hearing process can be more streamlined as well. So I just want to put in a plug for that that the burden can really reflect the complexity of the budget, but also the level of ask. And in terms of predictability, the budget is very predictable if there's compliance with the guidance and if the guidance is reviewed and considered in red in connection with making the budget. I think we heard a comment last week that the guidance wasn't reviewed in connection with making a budget. So I think if you don't read the guidance or don't follow it, it'll be quite a bit less predictable once we get to the budget hearing process. So I'd put in a plug for reviewing it and considering it deeply in connection with preparing the budgets, I think it'll make the process really smooth. I had nothing else. I think the guidance is really strong and beneficial. And I appreciate all the public comment and feedback and Elena and her team for incorporating a lot of it. And I have nothing else. So thank you. And I'll open it up to the HCA. Thank you, Chair Foster. I want to express our appreciation to the hospital budget team. This has been a long and iterative process. And of course, no stakeholder has gotten everything they want. But I think we're making substantial strides towards the coherent and rational budget process. I just want to point out that, and I just heard about Rutland's comment. It hasn't been posted yet. Access is more than just wait times. There's no doubt wait times or first available appointment is a metric of access. But another metric for things to consider is like, is the hospital investing in transportation for people who can't get to the hospital in rural areas? What about all the people who need services but can't afford to get them? This idea that this is, and I'd like to move us to a more complex understanding of access. And as if a hospital is making investments, say, and they need to raise their NPR to increase one component of access, that's raising commercial prices. If you're in the adoptable phase of your insurance, that's reducing access or increasing the cost barrier. So I think we need to get away from this kind of bright line notion of access in the medical setting. And I think it would be, I would be very happy if hospitals adopted a more complex understanding of access, just then increasing access always means increasing prices because I just don't think that's justifiable based on the literature and our understanding of what access entails. We have been pushing for some data, a reduction in the data variability between Agechrist and the 990 for some time. Last, when we submitted that letter, I think it was when Chair Mullin was here, so it's two to three years old. I think at this point, we need some action by the board to say, this is actually going to happen. We are making this a priority. We are going to look at Agechrist and 990 and adaptive and devote the resources to make this happen because up until now, it has been three years of this is an important issue that we need to grapple with. And there's been no movement on grappling with it or very little. And I think as enough raises with Ms. Barabay, as we move forward, I think we're going to have to iterate over the peer groups to what we want to show. So a lot of the consumer issues and say community benefits that's pulling from the 990, that is not going to work with the peer groups as they're currently structured. So, main health, which includes main medical and a bunch of CAHs, submits system-wide 990s for all of their hospitals, which wildly throws off the peer group medians. And so, I think as we look towards having a more consistent approach, both between data sources, but also that the peer group has to align with that. And that does require some digging into Agechrist or the 990 to see if our peer groups can actually work. Thank you. Thank you. I'll open it up to public comment via Raise the Hand. And Walter, do you have a comment? I just kind of wanted to back up what Tom said and what Eric said about access. And access is the main problem. It's the one problem that we have not been able to solve or have not wanted to solve. We as a nation is the state. But access is the biggest problem. We follow the money more than we do the access. Thank you, Walter. Mr. Delcheco. Good afternoon, Chair Foster and Board. Thanks for the opportunity to talk here today and submit comments through, I'll call it the CFO workgroup on measures. As mentioned last week, I think the uncertainty in our ecosystem, whether it's post-acute care, mental health, emergency services, and transport is causing a very big issue throughout our delivery system. And I think the work we've done here in this budget process helps move us towards some predictability and consistency. But I think it's ever more important that we continue to strive to work together and understand all of these metrics, ratios, and such. And I'll comment on a few of the comments from today's meetings a little later on. When we look at the uncertainty that we're going to be faced with in 2025 and beyond, such as will it be the AHEAD model? Will we have feet for service? Will we have some combination of patchwork? I think either way, we create this uncertainty that's being created. And we all should be looking for stabilization for our hospitals, our workforce, and most importantly for our patients. For us, this is all about patient care and all about the value we provide. And when we struggle, deeply struggle with many of the things that you all have just mentioned. So as we manage the opportunities, these changes may afford, I want to focus on five areas. Keeping care local, the economic crisis that Vermonters are managing, hospital financials, access, and workforce. One of our number one goals is to keep hospital care local. And why? One of the reasons is, Vermont is the most rural state in the nation, and our population that is over 60 has increased by 80% in the last 20 years. So somewhere along the line, somebody mentioned transportation. So without a transportation infrastructure, we need to make sure that these patients have access to local services. Two, we're concerned about the exportation of care. One, for the reason I just mentioned, but I think that in many instances we'll find care to be potentially more expensive, or even a bigger problem is if Vermonters postpone or delay care, we'll see a short term savings, but a long term expense. I know that's not in our best interest or our goals. So is equal importance having access to local care and healthy hospitals, bills, vibrant communities. And one thing we talk about a lot in our board is how having a vibrant community is part of just overall health. So something we're focused on. The second item, economic crisis. As we approach this budget process and continue to discuss difficult goals of affordability, we need to recognize that it's not just healthcare. As I said last week, Vermonters can't afford their homes. They can't afford fuel oil, heating, taxes, groceries to name a few. Affordability is a symptom of a larger problem. Together, we have done many things to improve healthcare in Vermont. But it's all, we also know that it still remains unaffordable. And this is a complex equation. And I ask us to evaluate these downward pressure on costs or reducing services with a data driven process. Determining how these costs or changes might be approached in a way that is more effective across the delivery system. For instance, years ago, there was a choice made on long term care. And we changed the way that long term care was paid. We reduced the number of beds. And that's showing up in a way today that is highly problematic for the delivery system. So meanwhile, with these patients, costs are being driven up in the organizations. And we have cost pressure unintended because of some of these challenges or decisions that have been made. From a financial point of view, budget growth needs to balance the real cost and experience of our hospitals, not just the producer price index, not just domestic growth product or picking personal consumption expenditures plus 1%. We see in our New England region, growth of 7%. That's what is happening locally in our community. And we need to remain competitive as it is important that our hospitals grow at comparable rates, or we run the risk of losing workforce to our neighboring states. Additionally, growth must allow for us to achieve sufficient margin. You all just had a conversation about operating margins. Expense management, I can assure you, is at the top of mind every day. Yet actual growth is 7% to 8% to create that value proposition that is being discussed. And I think the notion that hospitals can further reduce expenses to drive margins is not aligned with the reality of what is actually happening on the ground in the continuum of care. Another item that we talked about is non-typical expenditures such as housing. I think those things that hospitals invest in that are out of their traditional roles, whether it be housing, transportation, fill in the blank, as those drive our expenses, we should have some sort of data-driven analysis and work with your organization to see what should be included or potentially excluded from those growth rates. And I hope the budget process allows for that. We can see that today, with our efforts, 78% of our hospitals are in the red. In the past two years, it was 65%. These are becoming trends and it's concerning. As I mentioned last week, I'll move into access. That's even more concerning to me. Today, our average occupancy on their med surgery units are 94%. ICU beds are averaging 93%. And when I wake up some days and I hear we have two or three ICU beds, I'm terribly concerned. So this notion of access, this notion of improving access, I ask us to say with who and where if this is our occupancy and we know we have workforce shortages. Our emergency room boarding on average, we have 27 to 40 medical surgical patients waiting for a room. And we have 30 mental health patients waiting for inpatient placements. So I ask with who and where. And finally, workforce. Access pressures that I just mentioned above transcend directly to our staff, causing burnout, moral injury, and frankly, a loss of our workforce. If you look at some of the recent studies in our labor studies, Vermont has returned to pre-pandemic levels for employment. But those that employment is not taking place in our hospitals, it's taking place in other service industries. And because many of these issues that I'm talking about and we're dealing with as a group and as a society and within the state of Vermont have so much to do with the ecosystem. Vaz wrote a supporting letter to the house health care committee last week asking for increased Medicare fees for long-term care, skilled nursing, mental health, home care, EMS and designated agencies. We need to have stable ecosystem. So I asked two things. One, support as we go through this process, a budget growth that it reflects reality, not just a index number or a thought that we can change or reduce expenses. And two, a process on the benchmarks and benchmarks and measures that is finalized. I hope by the end of April 30, 2024, that will help with predictability and understanding as we move forward. And I want to address a couple of things in our other comments. One is, and I mentioned a couple of times by a couple of board members, one is around quality. There's a reason why we mention the word quality. We actually want it to be more robust and follow a more of a track of what VPQ has done, used for Vermont Department of Health data and quality and build a more complete understanding of what's happening in the quality arena. It's not just to remove it from the budget process. So context matters. From a, Board Member Holmes was mentioning New York, Rhode Island and New York, the issue in that space is not that they're not or they are included. It's what they're being measured against. It's the mix of urban organizations as benchmarks against rural, not-for-profit versus profit and network versus standalone organizations. And I'm happy to go through all of those details offline. But I know this is a lot of hard work. I appreciate the work that the board has done, Elena and her team and everyone involved. And thanks for the opportunity to talk today. Thank you, Mike, for making those points. I appreciate you commenting. Mr. Stanislaus? Hi, Mark Stanislaus. We're from the University of Vermont Health Network. Just to reiterate, I think some of the things that some of the board members and some of the staff had said. So, and there may or may not be some changes to the potential motion language after today's conversation. But these suggestions are towards that. So thank you very much for calling with a nuance out between actual and budget, where we do think that's a very important piece of the conversation as it relates to access in the NPR guidance. You would like to think that there's an openness to the conversation that if Vermonters are seeking or if hospitals are doing a better job at access and Vermonters are getting the care that they need to get that they had troubles with access before, that there would be an openness for that conversation in this process. So as it relates to the potential motion and I think member Holmes will refer to this a few times that, you know, these are benchmarks that the board are setting. And if there's evidence or circumstances of deviation, it is on the hospitals with the big proof and evidence in hopes that the board is open to those conversations. So it would be nice to add that to the end of the potential motion language too. And then other than that, I would just point out to a couple of comments that were related to data. There was the Medicare cost report and there was data validation. And I would say that all hospitals try consistency in the Medicare cost report. It's not that you just can't look at column one in the Medicare cost report. There is a series of reconciliation and reclasses that flow all the way through to column seven. And it's that column seven that attempts to get hospitals in a similar manner. It doesn't mean it's perfect. But as well, this kind of relates to the data validation. I think it was difficult on everybody in the process last year because the benchmarks came out so close to the budget hearings. As it relates to a data validation, I think the Green Mountain Care Board, the Green Mountain Care Board staff and all of the hospitals want the best data possible to inform the decision to the extent that conversations can happen in advance on those benchmarks to determine any nuances we know with the data, any misinterpretations. But to the extent that that data can get out there sooner, I'm sure the hospitals would welcome the opportunity just to review that data with staff in the Green Mountain Care Boards to make sure to avoid any issues or as much as possible at the time that the board is making a decision. Because I think that's what worked against all of us last year. Is it just the time that the data get out there to the time it was shared to the time that the decision had to be made? It was just too short to have those conversations. Because I think everyone wants valid data to inform the conversation. And so we would welcome that opportunity and conversation. So I mean, thank you very much for this conversation today. And it just seems with the conversation today that there was more openness in today's conversation that there was last week. So thank you. I had one question to make sure I understood, if you don't mind, Mr. Stanislas. On the motion language that you want to change or recommend, what exactly were you looking for again? Well, I was just saying, I think member Holmes can probably speak to this basket. She had said it earlier that, you know, should there be evidence or circumstances that a hospital live outside of these benchmarks that the burden is on the hospital to prove it to the Green Mountain Care Board, but that there is some openness for the Green Mountain Care Board will to listen to that too. So I think member Holmes said it pretty good earlier and say one of her comments, but it would just be nice to call that out at the bottom of the motion. So Oh, okay. I got it. Thank you. Yes. You know, share. So thank you. No, I understood. So that's that's in our rule and in this in the statute. So if you review the rule and statute, the burden and where that lies would be would be found there. Yep. I'm just thinking whether it would be respectful to put it at the bottom of the motion to even though it is there. Okay. And in terms of the, I'll go ahead, Dave. Oh, it's just going to follow up. So today we're voting on the potentially voting on the benchmarks and the rest of the data to inform the process, the publicly available data sources, the 97 or so different data sources. Those are things that we're not voting on today. Is that right, Elena? I believe and Russ can help us. We're voting on the benchmarks and the guidance. I published that for transparency, but with the recognition that we will continue working on it. Right. So that's been, you know, we are, we're not required like the benchmarks are the NPR, the commercial rate growth, and the operating margin. And the rest of that data within the guidance, we don't have, my impression is we don't have established benchmarks within each of those data fields, do we? No, there are no benchmarks. We didn't last year have any established benchmarks in those data fields. I know you weren't. Okay. I just want to clarify because I feel like that those, the data that we used last year, we discussed in March of last year as we are discussing in March of this year for this year's budget guidance, but the benchmarks were voted and established last year as they will be hopefully this year. Yes. I think we use the word benchmark in a number of different contexts in our work and the, and other work outside of the board. So it gets quite confusing when we're talking about the metrics for comparative analytics. It's really, you know, triangulating across a variety of data sources and measures and comparing them to peers. You know, I think last year you looked at quintiles or quartiles. I'm not exactly sure there's some box and whisker plots, but basically it's to say, where do you fall in a distribution on a particular measure? Right. And so, you know, there's not really like good or bad and some measures there, it's a continuum. We don't know. We just know where you're performing relative to established peer groups. I think that's why you've been hearing a lot about peer groups because that will kind of show like where you fall in that distribution. So what distribution do we care about and for which measure is going to be important? And so we should be thoughtful and ask questions about what we're seeing and why we think we're seeing it. And that's why we, you know, we don't think there's one way to do that and why it's a continuous improvement effort and we'll all learn together. Okay. Thank you. Sorry, Owen, for interrupt. And if I could just jump in for to make sure I think it was clear from what Elena said, but the what the board is potentially voting on today is to approve the FY 25 hospital budget guidance document, which you have and that includes the three benchmarks. It also includes a number of other things like telling the hospitals what they have to submit with their budgets, what they have to include in their narrative. It's the whole document. But that is what the board is potentially voting on to approve today, potentially with some changes that I think we heard during the meeting. And that would be issued then March 31st or before March 31st. Great. Mr. Carpenter, Walter, did you have another comment? Thanks, Owen. Yeah, I just wanted to address a comment by that Mike Del Treco made about access. And I'm not just I'm not going to reiterate the comment, but when he said for whom etc. When you get down to the level that I work at on the working class type, access problems are profound there. People don't go to care because they can't afford it because they have high deductibles and so on and so forth. So when you say access per home, is it the Medicare population, etc. I just wanted to clarify that. Couldn't agree more, Walter. Hey, Walter, let me let me interrupt because we can't hear you. You got a little garbled there. Try the try off videos sometimes that helps. That sounds better. Thank you. Anyway, just the access here for what you just learned, Mike said, you're very good. When you get down to the level of the front line, we're on that. Working class. I'll drop it there. But I got most of that. I'm not sure everyone got everything, but so if you want to send a written public comment, Walter, on those thoughts, that'd be great. But I think I got most of it. Thanks, Owen. Checker. Yeah, thank you, Mr. Chair Foster. Thank you. Walter couldn't agree more access is a massive problem for many and all. So thank you. And then I think last summer memory serves the flood happened early July. I think there were some issues with getting some of our data, the comparative metrics out as early as we wanted. Memory serves, I believe, Director Lindberg lost computer and some other pieces of her work. I'm not sure if the hospitals were informed of that, but there was a bit of a challenge with that that caused things to be a bit later than we had hoped. So that was some of the reason why we didn't get it out as early as we wanted last year. And we certainly aim to do better this year. And I also just think, Owen, if it's possible, as data becomes available to be shared as it becomes available, so it doesn't all have to be delivered in one big package, right? This can be delivered as it becomes available and shared for data validation. So that might be another way to address the concern about timing. Yeah. And the other thing is, I think that Ms. Fairby and Dr. Merman mentioned this, the comparative metrics are really an opportunity for a hospital to make a case as to why they should be above the benchmarks, right? So if you're a more affordable hospital with a significant amount of your resources being dedicated to patient care, you've got a low CMI adjusted discharge, those kinds of things really help make a stronger argument to the board that perhaps your rate should be above what the benchmark is. So if you're anticipating having a budget that's outside of guidance, I would start working on that now at the hospital level as opposed to waiting on the board. I think it'd be beneficial to start thinking about that if you think you're gonna be non-compliant with the guidance. We'll certainly endeavor to get everything together on our end as quickly as possible, but if there's certain things you want to make your case with now, they're available in the guidance as to what you can rely on. Mr. Rooney. Thank you, Chair Foster. Patrick Rooney, Vermont Association of Hospitals and Health Systems. For what you just said, that's why it's so important for those peer groups to be well vetted and accurate. As Mike said earlier, the comparison between rural hospitals here and urban hospitals and other places, nonprofits, for-profits system versus standalone or independent, as you heard last year. And as you've been working with some hospitals, you know how hospitals put together their cost reports depends greatly on their designation and whether or not they are our system affiliated. So those peer groups really need to be thoroughly vetted and that can help hospitals as they begin to address some of those indices that you're talking about because certainly how it's perceived and where they fall within however you measure it within that peer group, whether it's Elena said, the median upper quartile, lower quartile, depends on where those other hospitals they're being compared to fall within that peer group. So as you move to this evidence-based and data-driven budget process, how you benchmark and how you peer group and the accuracy of such is just as important as the data that you're feeding into it. So I just wanted to say that to support your point that you just made. Thank you. Thank you. Ms. Beverly, would you mind pulling up the motion language? I think we're prepared to vote. Yes, I'm happy to. May I just check, Chair Foster? So I made some suggestions to edits to the budget guidance and I just wanted to, if there were any board members that were concerned with any of the edits that I suggested since we're actually voting on that document as well, just wanted to make sure that folks are okay with those suggested changes that I made. Yeah, thank you for pointing out and I don't know if, yes, was the answer for myself. If any other board members had concerns or thoughts, different thoughts about what member Holmes or member Lunge recommended, let us know. I support the edits. Me too. I'm good with the changes. Mr. McCracken. So I was thinking through the motion language itself and I think we should, you know, in light of the discussion today, I know there were changes that member Holmes made. There was one addition for some additional language from member Lunge regarding referring back to year-to-date actuals and looking at the NPR. So if board members are in agreement with those changes, I think the motion language could be updated in the first sentence, the first clause to say the guidance as presented by staff and modified by the board today. There were some other suggested changes that I heard that I think are a little bit more substantive and so if, and those were member Lunge suggested the board reconsider the NPR growth rate and I believe member Walsh asked that some of the quality and improvement questions that have been taken out of the guidance and put off cycle be put back into the guidance. Correct me if I'm misstating any of that. If the board wanted to address those questions, those changes I think given that they are more substantive than the drafting changes, I would take those first in a separate motion and then approve the guidance as a whole with this motion. If that makes sense. Yeah, I made a note I was going to make the motion as to your first point with that adjustment that you made. I guess I think we can probably discuss just amongst ourselves right now those two suggestions because it get the sense that they were I think the phrase was die on the hill. So I think we can just discuss them and see if board members they can support this motion and then dissent with regard to that component if they wanted or I think we can do it that way. So I'll bring up first. We can just have a quick discussion about the the growth, the MPR growth and the rate increases and I understand an appreciated member lunges point of view on that. I think there's really there's it's a fair perspective. Ultimately, I think the motion as suggested to us is what I would approve and the reason for that is really just increases in growth that we approved the last several years put me more in line with what was recommended is member lunges point on that. If I could just jump in, I would I would say I did not hear support for my point in general when people commented. So I'm I don't need us to discuss it further. I think people, Jess and Dave also both mentioned that they were on board with 3.5. So I think reading the tea leaves unless other people really want to discuss it, I don't need us to discuss it further. And then member Walsh, did you want to say anything about your recommendation? For the quality and improvement initiatives that Ben suggested that they move off cycle. I was just trying to say that I hope that they make it back. I don't it doesn't have to be this year. This isn't something that I'm trying to jam in this meeting when I wasn't here last week and don't know what all went into it. But I thought it was a good work on the latest part to incorporate them. And I hope they make it back in the future. But I'm not to to borrow the phrase. It's not a hill to die on for me to have them in this year. Great. Thank you both. So given that I'll go forward with the motion and can I move consistent with the edits discussed by board members today, that the Green Mountain Care Board approved and adopt the fiscal year 25 hospital budget guidance as presented by GMCB staff, which includes benchmarks for NPR growth at not more, no more than 3.5% over fiscal year 24 budget, commercial rate growth overall and for each payer at no more than 3.4% over fiscal year 24 approved rates and operating margin greater than 0%. In each case as presented by GMCB staff and reflected in the fiscal year 25 guidance. The 25 guidance shall be effective as of March 31, 2024. And the GMCB director of health systems finance is authorized to finalize and issue the guidance on or before that date. Second. All those in favor, please say aye. Aye. Aye. Aye. Aye. And the motion carries unanimously. And I wanted to thank our team and and VOS and the hospitals and the health care advocate for a robust process. And we really appreciate all your comments and your thoughts that I think made this a better product and hopefully one that can lead to some improvement in our health care system this year. So thank you. And thank you. Ms. McCracken, Elena and Matt. Oh, and may I just ask a quick question, a follow up question? Please. I'm just wondering, Elena, if you might be able to just comment on the peer group analysis and the timeline for finalizing that, if there is one, I think that that was an important point that was raised. And if we're going to suggest that the hospitals can can start to look at their own data and reference it to a peer group. I'm just wondering what that process might look like in the timeline for it. Yeah, so we're working with the contractor on kind of finalizing the kind of focus measures over the next couple of weeks from that inventory. It doesn't mean those will be the only measures that they mentioned, but what we're visualizing. And then what we're going to do is kind of relook at. So I was asked, asked our contractor to make a recommendation on a methodology, not just cherry picking or coming up with a list of hospitals, but what is a methodology based on kind of comparative factors that make sense for establishing a peer group. And then I think we can take that back and get feedback from hospitals, healthcare advocate, you all and anyone else who wants to participate. We can look at those benchmarks. And then we'll I don't know exactly what our timeline is to make sure we can then actually build this thing by July. But that is the goal is to have that conversation and back and forth and data validation. So we'll be in touch, you know, as things kind of crystallize frequently. Thank you. You're welcome. Okay. Next agenda item is being presented by Michelle Sawyer, our health policy project director. And it relates to an extension request from OneCare Vermont relating to their benchmarking. Perfect. Thank you, Chair Foster. I just want to pause because I see a hand up. Okay, never mind. All right. So yes, we're here today to discuss an extension request that came in from OneCare Vermont regarding their Medicare performance benchmarking report. So the requirement for OneCare Vermont to submit a semi-annual Medicare ACO benchmarking report has appeared in their budget order since FY22. The language on this slide is an abbreviated version of the budget order condition number one in OneCare's FY24 budget order. It's important to note that this report has undergone several iterations since its first submission. And during the 2024 budget process, the board decided on some additional analyses to enhance our ability to interpret the results in the report by voting to include both statistical significance analysis and beneficiary risk information for all the ACO cohorts within the report, as can be seen in condition one E. Condition one F is a perennial requirement. Generally, OneCare has submitted this report at the end of March and at the end of September each year. So on March 15th, OneCare Vermont submitted a request to GMCB staff to first extend the initial 2024 report submission date from March 31st, 2024 to April 30th, 2024, in order for OneCare's vendor to receive data from CMS, analyze, revise reporting, and conduct appropriate external data quality assurance processes to allow for this report, including beneficiary risk levels to become a public document. A note about the spring report, OneCare did inform staff that the spring submission would essentially include all of the same data as the fall 2023 submission, but the really only the additional context that would be provided would be that beneficiary risk data information. So by delaying the submission date by one month, this report would not be available for OneCare's FY24 revised budget hearing, which is scheduled for April 17th, but it would be submitted prior to the GMCB staff analysis presentation of the revised budget. And then the second part of their request is to delay submitting statistical significance testing to the September report to allow a continuation of the conversation between GMCB staff, OneCare and its vendor regarding technical specifications to meet the statistical significance requirements of the GMCB. The staff have come to understand from OneCare and their vendor that true statistical significance testing is a time consuming and expensive endeavor. So the staff are working with OneCare to determine the best methodology for this type of analysis. And because they're these conversations are ongoing, the staff feel as though extending the deadline for the specific aspect of the report until the fall makes sense at this point. So here is some potential motion language for the board to consider after any questions, discussions.  Thank you. I'm all up to the board members for any thoughts or views they have on this. Since I'm on mic, I'll go ahead and just share. I don't have an objection to this. It would be nice to have it earlier, but I don't really see a problem with it. So I would support the motion. Same here. Ditto. I'm getting head nods from Dave and Tom. So I'll go ahead and read the motion and then take public comment. I move that the GMCB approve OneCare Vermont's requests, one regarding condition 1F, extend the deadline for OneCare to submit its updated benchmarking report from March 31st, 2024 to April 30th, 2024, to regarding condition 1E, little i, extend the deadline for OneCare to submit its statistical significance analysis from March 31st, 2024 to the deadline set for the second semiannual benchmarking report as stated in the ACO reporting manual. I'll second. And I will open it up to the health care advocate and then public comment via raise the hand. Good afternoon. No objection from us. Thank you. Great. Thank you. Any other public comment? All those in favor of the motion, say aye. Aye. Aye. And the motion carries unanimously. And thank you very much, Ms. Sawyer, for bringing us up. Thank you. Good day. I think that's all we had in the agenda. Is there any old or new business for the board? Is there a motion to adjourn? So moved. I'll second it. All those in favor, say aye. Aye. Aye. The motion carries. Have a nice day. Thank you. We're adjourned.


Good day, fellow investors. Charlie Munger is definitely the favorite investor that I look up to because he has done it all in life. He has made money, he has lived life, ate children, had a boat. Really, really, he traveled the world, invested in China, had a lifetime like I aspire to have. Plus, he agrees with something, he sees things from a different perspective and there is so much to learn from him. For example, the favorite quote that I found for now in this life that is really mind-blowing and really summarizes also my wishes. What I want to do with this channel is the following. Our experience tends to confirm a long-held notion that being prepared on a few occasions in a lifetime to act promptly in scale, in doing some simple and logical thing will often dramatically improve the financial results of that lifetime. A few major opportunities clearly recognizable as such will usually come to the one who continuously searches and waits with a curious mind that loves diagnosis involving multiple variables. And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past. And this is exactly what I'm trying to explain when I look at economic data, when I look at stocks. It's not about investing now immediately, it's just about simply patiently waiting for those great investments. In 2002 I started investing in stocks because there was a high dividend yield, those were cheap. 2009, 2011 I invested heavily in stocks because those were cheap again. 2013 I put all my money, what I had from all this moving around. We bought a house in the Netherlands. We did an excellent deal and I'll explain how we turned 10,000 into 150,000 in a few years there. And then 2016 commodity stocks, 18 were very, very cheap copper stocks and we invested there. We invested in Russia, Gazprom six months ago and the key is that there are few of these opportunities. I invest also, I made mistakes, that's normal. But when you find those opportunities, those simply have no risk and exponentially increase your wealth over time. And if you find a few of them, perhaps one or two per decade, over 50 years you'll be extremely wealthy at the end of the line that you will not know what to do with your money. And that's the message Charlie has always been saying, that's his perspective. And that's also what I want to do with this channel. This is the channel's core, is waiting, waiting, waiting for those sweet spots. We play a little bit trying to get advantage of what's going on in the market but when it comes to really betting big, then it will be when everything is in a sweet spot and that might be once in five years, once in three years, once in two years given the volatility of the markets. But we are ready to wait. In the meantime, we learn, we read books, we analyze stocks, we analyze sectors. So if you fancy such a perspective, a long-term perspective on investing, please subscribe to this channel. Thank you for watching. Looking forward to your comments in the comment section on videos. I reply to them so feel free to comment. Ask me any questions so you can send me an email. If you want to dig deeper immediately into the research I do on stocks, check my research platform. Thank you. Looking forward to talking to you again. And I'll see you in the next video.


A political system is a set of interrelated social institutions that collectively perform the function of public governance within a society. Politics is the process through which a group of people make collective decisions that affect all and implement them. The process of doing this we call public governance. A political system is then the set of institutions required to conduct governance within a society. Whenever there is a group of people that are interdependent in some way, their actions will affect each other and some form of organization is required to effectively manage this combined organization and thus arises the need for a political system. Political systems are then a response to the question of how this combined public organization will operate, whose opinion will be included, how will the process of reaching a decision be conducted, how will it be implemented and enforced. In order to facilitate this process in an organized and structured fashion, a number of social institutions are required which constitute the political system. Public governance takes place in and between a group of people that are interdependent as they share some commonality, thus political systems have historically emerged out of a local geographic context and sociocultural organization. All forms of social systems have had some form of political system. Bands, tribes, chieftains, states and empires throughout history have all developed institutions for collective decision making and implementation. People that share common culture and social institutions and thus identify with each other as a single sociocultural organization have historically formed the basis of political unity. However, political systems do not necessarily need to be based on people sharing a common culture and social structure. For example, the great agrarian empires such as that of Rome regarded subjects of vastly different ethnic and cultural heritage to be equally subject to aristocratic and central authority. The legitimacy of the emperor, king or aristocrat had nothing to do with what language they spoke or what culture they came from. With the rise of the modern era, nationalism became a dominant paradigm for political organization. Nationalism means a sovereign state that itself represents one culture or ethnic group over a large area and the belief that this ethnic group or people ought to be self-ruling and this can be seen as a relatively modern concept. An ethnic group or ethnicity is a category of people who identify with each other based on similarities such as common ancestral, language, social or cultural experiences. The idea that people of the same nation are connected to each other is called nationalism. The concept of the nation-state becoming equated to the nation became dominant in the 20th century in Europe. It's true that humans have always lived in groups that share a common culture, religion, ethnicity or race but these were not what we would call states. They were predominantly local kin-based associations, perhaps with the dialect of a language spreading over a number of villages a short distance from one another. The idea of a nation is a relatively modern phenomenon. The central idea of nationalism is, as Ernest Andre Gelner stated it, to each people a state, to each state one people. Nationalism went hand in hand with the rise of the commercial class and capitalism during the modern era as a centralized government over a large geographical area can provide an ideal platform for commerce. Standardized homogenous, centrally sustained high cultures pervading entire populations and not just the elite as Ernest Gelner noted. The idea of nationalism is that people have a right to self-rule. In order for government to be legitimate it has to share and express the culture of the people. However, this is typically not what occurred in the past, the legitimacy of the rulers power over subjects had nothing to do with them sharing a common culture. To say that the Japanese should rule themselves and not be taken over by Korea is a nationalist idea. We can note that nationalism is in essence idealistic in that instead of the foundation of political authority being based on power it is seen to be based on the shared culture of the people. The idea of nationalism is to say that the peasant and the noble share something in common that is greater than their differences and this idea would have been abhorrent to the nobility of the middle ages. Nationalism promotes equality within the nation but may also do this at the expense of inequality between nations. It requires literacy and a degree of education because people over a large area must know that they share a common history and identity it is unifying and centralizing in nature. Your loyalty to the government is based upon your shared identity thus nationalism has had a huge homogenizing effect on culture during its rise as out of the many thousands of cultures that previously existed on the planet today only a small fraction have become national cultures. Benedict Anderson pointed out in his influential book Imagine Communities the nation is an imagined community the vast majority of the people will never meet and will live very different lives from each other but they have some conception of a shared identity. Anderson traced the formation of the nation state back to the printing press as a key element in its formation where people consuming the same media came to see that they had something in common. The book illustrates how the printing press played a powerful role in the development of a shared sense of identity that is the foundation of the nation. Imagine Communities suggested that nationalism is not the awakening of an existing community but in fact the invention of one. The nation is an abstraction it emphasizes the commonalities among a group of people above their differences and thus constructs a basis for modern political organization. Nationalism creates one dominant culture over a large geographical area and promotes this as the foundation to political legitimacy. For example today Ethiopia is composed of more than 80 different peoples and cultures but the centralized government still promotes itself as representing one people. A nation defines itself and others through race, history, culture and common language. For example in contemporary France if you know the language and the history you can be considered French. This can be called cultural hegemony. Hegemony is when one element rules without question. Cultural hegemony is when one cultural perspective dominates all others which is the key part of nationalism. The political theorist Anthony Gramski argued that the political state produced cultural hegemony to maintain its rule. Cultural influence is a critical part of the maintenance of the state and that is why language and culture feed into the power structures and the state will try to control them to varying degrees. He posits that the state uses an often subtle array of means and cultural institutions do this from the media to the educational system in order to create a cultural assumption of its validity and the validity of the cultural narrative that supports it. For a political system to operate and exercise governance it must have the institutional means to affect or influence the members it governs. This set of political institutions can take different forms from bands to tribes, chieftains and empires but the contemporary form through which governance is exercised is called the state. In terms of a political entity a state is any political organized community living under a single system of government. The Oxford Dictionary defines the state as a territory considered as an organized political community under one government. The key aspects of statehood are population, citizens, territory and governments. States are defined by a given territory with boundaries to it and they exercise governance within their confines. States have a permanent population, a defined territory and a government that is capable of maintaining effective control over the corresponding territory and of conducting international relations with other states. These elements are summed up in Max Weber's definition which describes the state as a compulsory political organization with a centralized government that maintains a monopoly on the legitimate use of force within a certain territory. For most of human history people have lived in stateless societies characterized by the lack of concentrated authority and the absence of large inequalities in economic and political power. The earliest forms of state emerged whenever it became possible to centralize power in a durable way. Agriculture and writing are invariably associated with this process. Agriculture as it allowed for the emergence of a social class of people who did not have to spend most of their time providing for their own subsistence and writing because it made possible the centralization and dissemination of vital information. It is only in relatively modern times that states have almost completely displaced alternative stateless forms of political organization all of the planet. Roving bands of hunter-gatherers and even relatively large and complex tribal societies based on animal husbandry or agriculture have existed without any full-time specialized state organization. These stateless forms of political organization have in fact prevailed for all of pre-history and much of the history of humans and civilization. Initially states emerged over territories built by conquest in which one culture, one set of ideas, and one set of laws have been imposed by force or threat over diverse nations by a civilian and military bureaucracy. The modern state arose of the breakup of European Christendom during the early 16th century. The Reformation integrated a century of religious wars between Catholics and Protestant powers by the end of the century the modern state had been established in Western Europe. A centralized power with exclusive lawmaking and law enforcing authority over a territory. Conventionally however the modern state and state system is dated from the Treaty of Westphalia in the 1600s after a period of intense inter-European warfare. The Westphalian Treaty established the key principle of modern statehood which is sovereignty. Since the late 19th century virtually the entirety of the world's inhabited land has been divided out into areas with more or less defined borders claimed by various sovereign states. However, even within present-day states there are vast areas of wilderness like the Amazon rainforest which are uninhabited or inhabited solely or mostly by indigenous people. Also there are states which do not have de facto control over all of their claimed territory or where this control is significantly challenged. What we call failed states such as Somalia or contemporary Syria. Currently the international community comprises some 200 sovereign states the vast majority of which are represented in the United Nations. Nation states often force into a single mold a diverse set of people and cultures that historically have had little to do with each other. The state tries to mold them into a single entity under a single rule of law and subject to the same fixed rules. In order to achieve this nation states often worked actively to foster a sense of national culture over that of local cultures. If we look around the world most of the nation state borders are those that were imposed in a very artificial way by the colonial powers and today remain fragile. Iraq is one such example being a product of the British carving out of a territory according to their own interests not in the interests of the indigenous people. For example the northern border of Iraq was drawn so as to enable the British to exploit oil resources or the line that the British drew separating Pakistan and Afghanistan cuts right through the Pashtun area. The colonial empires had little interest in developing the institutional capabilities required for a functioning state before leaving after the world wars. In the absence of the required institutions many nations around the world have remained weak particularly in Africa and the Middle East. However the nation state remains the dominant institutional framework on a global level through which political order and organization is maintained and remain the primary units of analysis for much of contemporary political science. States may be classified as sovereign if they are not dependent on or subject to any other power or state in exercising influence over their territory. States then may or may not be sovereign. For instance federated states like that of contemporary Germany are members of a federal union and may have only partial sovereignty but are nonetheless states. Such states are subject to external sovereignty or hegemony in which ultimate sovereignty lies in another state or some super state institution. States that are sovereign are known as sovereign states. sovereign states exercise supreme authority within a limited sphere. The ability to rule absolutely within a territory when no outside force can dictate the internal workings of the state. Sovereignty implies supreme rule or authority. This authority can be achieved through what people see as legitimate or illegitimate means. Illegitimate means are those that people do not see as correct. The most obvious being the arbitrary use of physical force. Legitimate means are those that people see as being right or correct. When a government is seen to be legitimate people act in accordance with the government's will because they recognize its authority as deriving from something higher or more valid than their own specific interests. Culture and national homogenization featured prominently in the rise of the modern state system. Since the absolutist period states have largely been organized on a national basis. However, even in the most ethnically homogeneous societies there is not always a complete correspondence between state and nation, hence the active role often taken by the state to promote nationalism through emphasis on shared symbols in national unity. A state can be distinguished from a government. A government is a particular group of people and organizations that control the state apparatus at any given time. That is to say, governments are the specific means through which state power is employed and exercised. States are served by a continuous succession of different governments. States are immaterial and non-physical social objects, whereas governments are specific groups of people with certain powers. A government is the means through which the abstract concept of governance is realized within a particular community. The government is the organization within the state framework that manages the process of governance. The relationship between a government and its state is one of representation and authorized agency. That is to say, the government acts on behalf of the state. Governments manage societies and they do this by defining the protocols or rules through which that society will operate. They then have to implement these rules, enforce them and adjudicate in certain matters. Governments firstly need some system for defining who gets participation in the decision making process, what may be called an electoral system. Secondly, in order to make decisions and create rules, a decision making body is required, what we call the legislative. Thirdly, there needs to be some organization for executing on the initiatives and rules agreed by the group, what may be called the executive or public administration. Finally, there needs to be some organization for ensuring that members adhere to the rules of the government and adjudicate on disputed issues, what we call the Judiciary and Law Enforcement agencies. In political systems based on the principle of separation of powers, authority is distributed among these several branches in an attempt to prevent the concentration of power within the hands of a small group of people. Although it should be noted that the mere existence of such institutions in law does not guarantee a separation or balance of power. Many autocratic political systems have all the institutions designed for a balance and separation of power while behind this power remains concentrated within a centralized group. Governments manage the public sphere and they have to decide the best choices to make on what is the best direction to go in. This starts with deciding who gets a place at the decision making table, whose opinions will be included in the final decision. Different political systems will do this in very different ways. Some will be restrictive, reducing the number of people, others will be expansive, some will be based upon the use of force, some on individual rights and representation. In an autocratic system, decision making is concentrated in a single center with a limited number of members having representation within the decision making process based upon their access to the source of power. However, today almost all political systems around the world purport to be based upon the interests of their people and display the institutional apparatus for public opinion to be expressed within the decision making process. Of course in autocratic systems this is merely for appearance only. In a modern republic based on the social contract, the law ensures that the decision making process is open to those who have citizenship within the nation. In such a system the decision making power of the citizens has come to be mediated through a representative body that is elected by the people. Broadly speaking an electoral system can be defined as the regulation of the election of public officials. In a more concentrated definition an electoral system can be seen as the regulation of the relationship between voting and the elected officials. Therefore an electoral system is the way in which public opinion and interests through votes can be translated into elected representatives, into elected representatives and ultimately the decisions that the citizens wish to see enacted even if this is a highly mediated process. The design of electoral systems determines the ways in which votes are turned into public offices. The constitution of most countries today both provides the legal framework for that country and serves as the basis for the conduct and delivery of free, fair, credible and legitimate elections although this is only realised in practice in a subset of political systems. Those who are elected to government form part of the legislative system. The legislative makes laws that are binding for the community. Modern democratic political systems based on law are designed to formulate new rules based upon the use of reason through debates. This process is called argumentation. Individuals have particular perspectives from which they derive opinions on topics. They then construct a case for particular action or sets of rules. People construct a case by presenting data, creating premises and drawing inferences that lead to conclusions. However not all arguments are reason based in which case people resort to various other means such as persuasion and manipulation. People present their various cases before an audience with the hope of persuading them to adhere to their course of action. Ultimately the outcome of the process depends on the audience that will in some way express the approval of some options over others which then go on to be implemented by other government institutions. What the legislators can and cannot do is governed by the constitution. Indeed the constitution is the expression of the social contract made by the people informing the government and thus defines the parameters of the government, what it can and cannot do. A constitution is a set of fundamental principles or established precedents according to which a state or other organization can legitimately operate. These rules together make up the entity itself. When these principles are written down into a single document or set of legal contracts these documents may be said to embody a written constitution. Few states in the modern world have constitutional arrangements that are more than a century old. Indeed the vast majority of all the world states have constitutions that were written in the 20th or even 21st century. The executive is the element within the political system exercising authority in and holding responsibility for the management of the state. And public administrations take the typical bureaucratic form found within most industrial age organizations similar to that of the corporation. As is the case for all hierarchical bureaucratic systems of management the operations of the executive are broken down into various departments with department ministers or heads responsible for the provision and maintenance of various public services. In a presidential system the leader of the executive is both the head of state and head of governments. In a parliamentary system a cabinet minister responsible for the legislators is the head of government. In this case the head of state is usually just a ceremonial monarch or president. It is very often said that politics is about power and power is the ability to impose one's will on others. For the state to have power it must have some apparatus for influencing or controlling people towards the ends that it has decided upon. Ultimately politics often involves power in that it often requires the implementation and enforcement of rules made by the collective on the individuals the group. In this respect the origins of the state is to be found in the development of the art of warfare. Historically speaking all political communities of the modern type owe their existence to successful warfare. The exercise of power through the use of force is the origins of the state and it remains a critical element of it. This power of the state is exercised through the law enforcement agencies. Law enforcement is the element of the political system by which members of the government acts in an organized manner to enforce the laws by discovering, deterring, rehabilitating or punishing people who violate the rules and norms governing that society. A modern law enforcement system will include such elements as police force, courts, intelligence and surveillance agencies, army etc. These enforcement agencies are largely limited to operating within a specific jurisdiction. Outside of this the military is responsible for state security. Questions of how to interpret and apply the law within specific contexts are managed by the judiciary which adjudicates between the written code in its application. The judiciary is a system of courts that interprets and applies the law in the name of the state while also providing mechanisms for resolving disputes. In some nations under the doctrine of separation of powers the judiciary generally does not make laws or enforce those laws but rather interprets the law and applies it to the facts of each case. In other nations the judiciary can make laws which is known as common law by setting precedents for other judges to follow as opposed to statutory law which is made by the legislators. And the judiciary is often tasked with ensuring equal rights for citizens under the law.