Welcome everyone. My name is Kevin Mullen chair of the board and thank you for your patients. This meeting was supposed to have occurred on Wednesday, but like much of the rest of the world, many members of the Green Mountain care board staff are dealing with COVID as well. And so we had to delays Wednesday meeting until today. And that brings up something that I just want to repeat. I've said it a few times before that even though today's discussion centers around how we move forward with sustainability planning, that doesn't mean that the board does not recognize the situation that hospitals are in today. And we know that the number of COVID cases in hospitals has reached an alarming point. It's been an alarming point for a long period of time. And there's extreme stresses on anyone that's working in the healthcare system today. So I just want to again reiterate that nothing nobody at the Green Mountain care board has insinuated that the board should get in the way of providers and their patients. And nobody at the Green Mountain care board has said anything about moving ICU beds or closing units. And I just want to reiterate that what we're trying to facilitate is the beginning of what will take many, many months and possibly years to have a discussion and reach agreement with community members, hospitals, and all healthcare providers as we try to figure out how we have a system in Vermont that we can afford and is sustainable. And we know that there are incredible inflationary pressures on our healthcare system today. The largest of which right now are the workforce and will continue to try to deal with those. And I just want to say that we expect there to be inflationary pressures on healthcare costs of Vermont. But that doesn't mean that we can just sit idly by as healthcare costs inflation grows higher than the rate of other inflation. So again, this is just a conversation, the early stages of a conversation. And with that, I'll turn it over to the executive director for the executive director's report. Thank you, Mr. Chair. I have a few announcements. First, I wanted to let the public and remind the board that we submitted two reports on January 15th. Actually, we submitted them on the 14th. And the first is our annual report for 2021. And the second is the Act 140 section 10 report, which is entitled opportunities for and obstacles to aligning and reducing prior authorizations under the all peer ACO model. Both of these reports are available under what's new on our website. They'll also be filed under our legislative report section. I'd also like to remind everyone of the ongoing public comment period regarding a potential next model with CMMI and the state of Vermont. We are asking the public to provide any public comments on their thoughts on a potential next model. We will share any of these comments, obviously with the board, but also with our partners at AHS and the governor's office, as they are leading the negotiations on the potential next model. And then last, I just want to remind everyone that next Wednesday, January 26th, we'll be holding a hearing on the proposed ambulatory surgery center in Colchester. Correct me if I'm wrong. I just want to make sure I have the right time. 9 a.m. Is that right, Mr. Chair? That's correct. Okay, great. And then in the afternoon, we'll be coming back to hear a presentation on the essential health benefits benchmark plan updates as well as a continuation of sustainability discussion leading into a discussion on 2023 and beyond hospital budget guidance. That meeting in the afternoon starts at 1 p.m. or a regularly scheduled meeting.  Just to add that we also are extending an invitation to the director of health care reform to update us on the health care workforce plan if she is so available next Wednesday, but at her earliest convenience. It's often tricky. People will ask board members questions about whether or not all the different pieces were in the governor's budget. And it's hard to tell the way things are put together on a budget. And unless you're sitting in a committee that has finance and management coming in and explaining things like Tom has in the past as a member of the appropriations committee, it's really hard for the average vermoner to figure out if all the items in the workforce plan are truly funded. So hopefully we can get that update and learn from that. I also had a note that another board member would like to say some comments. Jess? Oh, well, sure. Yeah. No, I just wanted, in some ways, I just wanted to echo what you had said, Kevin, about how important it is to acknowledge, you know, the unprecedented strain that our hospitals are under. People have been working tirelessly for two years to keep her mother safe and healthy. I think we're all grateful. And I just wanted to comment on that and just say that today's discussion really in no way minimizes that hard work and dedication. It's really an effort to ensure that we have a robust hospital system in the future that vermoners can access care at low cost and high quality. And, you know, these conversations are this is the start of conversations. There's some of them may be challenging. But today is about reflecting on what we've learned and outlining an inclusive process that brings us closer to that system. And I think some folks have questioned why we're taking up the discussions now in the midst of a pandemic. And I think, you know, in my answer to that is to the degree that we need federal exemptions or funding to facilitate those conversations to provide technical and transformational assistance to hospitals. You know, there's a lot of transformation dollars on the table right now. Do we need transportation dollars to better ensure access? Effectively, in my mind, those conversations need to have start now with the legislature still in session while federal money is on the table and while we're developing proposals for the new federal agreement. So my concern is that if we wait, we may lose access to those funds, access to those exemptions that would actually ease the transition to that optimal system that we're trying to get. So in my mind, that's why we're having the conversation now. Thanks. Thank you. So the next item on the agenda are the minutes of Wednesday, January 12th. Is there a motion? So moved. Second. It's been moved and seconded to approve the minutes of Wednesday, January 12th without any additions, deletions, or corrections. Is there any discussion? If not, all those in favor of the motion, please signify by saying aye. Aye. Any opposed, please signify by saying nay. Let the record show that the motion carried unanimously. So next we are going to turn to the conversation of the integration of the 2021 reports, the data, and the feedback on the healthcare reform leaders discussion that has been held. And I understand that due to time constraints, we're going to call on Mike Barber first and then we'll hear from Elena Baraby. So Mike. Good afternoon. Can you see the slides? We can. It's an interesting layout too, not one that I've seen before. I don't know if you can enlarge that. Wait, Barber. Better. Okay. I'm not used to this. So yeah, I appreciate you taking me first so I can go pick up my kids. And I'm probably not going to set this up as well as Elena could, but you know, basically we thought that you would appreciate having a refresher on the board's authorities as you begin to consider and discuss how to incorporate data or findings from the sustainability planning work. And so that's what I'm here to do. And it's going to be pretty dry. I apologize, but I wanted to start out with some just basic legal principles. The first of which is that agencies have only the authorities that the legislature has given them. Authorities can be either express or implied. Express authorities are exactly what they sound like. They're the authorities that the legislature has expressly granted to an agency. Implied authorities are authorities that are implied as necessary for an agency to fully exercise its express powers. Second, to determine the scope of an agency's authority, courts look to the agency's enabling legislation and seek to give effect to the legislature's intent. And then third, depending on the authority given to it by statute, an agency can exercise judicial or legislative functions or both. The judicial function is exercised through adjudication, which typically operates upon specific individuals based on present or past situations. Whereas the legislative function is typically exercised through rulemaking and it operates generally on a broad class of future situations. And as you're aware, the board exercises both judicial and legislative authorities. Before I get into authorities or duties, I wanted to note that the legislature has directed the board to execute pretty much all of its duties consistent with a series of healthcare reform principles. To be clear, this is not a grant of authority, but it is relevant to what the legislature intended by giving the board its authorities. And so I wanted to just mention it here. The principles for healthcare reform are broad. I have attempted to distill some of the ones that are maybe more relevant to this discussion. But if you want to take a look at the actual language, I've given you the statutory citation there. As you would expect, the principles are generally consistent with the purpose of the board, which is, as you know, to improve the health of the population, reduce the per capita rate of growth in healthcare expenditures, while ensuring access and quality are not compromised to enhance patient and healthcare professional experience of care, to recruit and retain high quality healthcare professionals, and to achieve administrative simplification in healthcare financing and delivery. I'll spend just a minute on this concept of implied authority. It's of the two types of authorities. It's the harder of the two to talk about because there's not a list anywhere that I can run through with you. But I did think it would be helpful to just review a couple cases where implied authority was found and not found to exist to help make it a little bit more concrete. So in the two cases cited here, the Vermont Supreme Court held that the board and its predecessor had the implied authority to clarify a certificate of need that had already been granted. As you know, the CON statutes require an applicant to notify the board prior to making any changes to an approved project, and they authorized the board to review such changes. And so the court looked at the statute and reasoned that, well, the board needs to be able to clarify the scope of the CON to determine if a proposed action is within the scope of the project that was approved or whether it's a change to the project. And then contrast that with this case, or these two cases rather, where the court held that the commissioner of banking and insurance did not have the implied authority to order health insurers to take certain actions in connection with a rate review decision. The statute at issue required an insurer to obtain a permit prior to entering a contract with a subscriber and it allowed the commissioner to refuse to issue a permit if the rates submitted were excessive, inadequate, or unfairly discriminatory. And in connection with one of these decisions, the commissioner had ordered an insurer to take certain actions, for example, eliminate certain coverage clauses, report on prospective reimbursement, and reject cost increases from providers until they were adjusted to the lowest reasonable level. And the court held that the commissioner lacked the authority to issue these orders because nothing in the statutes or the case law could reasonably be construed as expanding the passive power of approval or disapproval of a rate into the act of authority to issue supplemental orders. I'll get to it kind of towards the end of the presentation, but this statute was subsequently amended and there are some cases interpreting that amended language. So moving on to the board's express authorities, I am not going to try to cover them all, but I'm going to try to cover the ones that seem to be most relevant to the sustainability work. And the one that's probably most relevant is the hospital budget statutes authorities. The primary authority here is the authority to establish a budget for each hospital. And as you think about how to incorporate sustainability data or findings into our processes, you'll want to consider who those processes impact and how. And so the group directly impacted by the hospital budget process has traditionally been the state's 14 general hospitals, community hospitals, however you want to have everyone to say it. This is changing. However, effective July 6, 2020, the hospital budget statutes now apply to any hospital that is licensed in the state except a hospital that is conducted, maintained, or operated by the state. So this effectively brings the Brattleboro retreat into the board's hospital budget review process, but not the Vermont psychiatric care hospital, which is obviously operated by the state, and not the VA hospital, which is excluded from the licensing statutes. We have until the fiscal year 2024 budgets to fully bring them in, but that just to remind you that that is coming. As far as how this process impacts hospitals, I don't need to tell you, but the board has historically limited hospitals, net patient revenues, and their ability to increase charges, which impacts primarily commercial payers, although maybe not as directly as we would hope. The statute I did just want to note doesn't refer to revenues or charges. It just, like I said, calls on the board to establish a budget for each hospital. The statute also says that hospital budgets established by the board must meet certain requirements. For example, the budgets must promote efficient and economic hospital operations. The budgets must reasonably reflect a reduction in hospitals net revenue needs for non-medicaid payers due to any anticipated increases in Medicaid, Medicare, or other public health care reimbursement programs, or to any reductions in bad debt or charity care due to a reduction in the uninsured rate. So basically the reverse of the cost shifts, if you're going to get more Medicaid funds, Medicare reimbursement increases that needs to be reflected in the budget and the charge increase. And so in construing the board's authority here, a court would look likely to these requirements. And for example, if the board found that a hospital had not appropriately accounted for Medicaid or Medicare reimbursement increases when it developed its budget, the board could adjust the budget to account for that. To me, at least, that would be pretty clearly within the board's express authority to establish a budget. And then the hospital budget, excuse me, the hospitals must justify their budgets. Another important thing to consider. Besides the authority to establish budgets, the other major authority here is kind of a legislative authority. And it's the authority to define annual criteria for hospitals to meet, such as utilization and inflation benchmarks. Relatedly, the board's rules specify that the board will, on an annual basis, establish benchmarks for any indicators for use in preparing the upcoming year's budget. The rule is very broad in terms of what the benchmarks may cover, and it specifically mentions cost and price indicators, access indicators, population health and quality indicators, profitability indicators, and prior budget performance. The benchmarks do need to be set annually and included in the annual reporting manual, but there is nothing preventing the board from signaling its intent with respect to years beyond just the next budget year. So, for example, by reference to a long-term cost growth benchmark or something. And then the rule says that the board may adjust proposed budgets of hospitals that do not meet the benchmarks established by the board. The board has some other express authorities with respect to hospital budgets. They're probably less relevant to this discussion, but worth a mention. The board has the authority to adopt rules, to adopt uniform formats for hospitals to report financial scope of services and utilization data, and the board has enforcement authorities to ensure compliance with the requirements of the statute and the board's orders and to deal with non-compliance. The board also has authority over accountable care organizations, or ACOs, setting aside the section of the statute that deals with certification. There are really two primary authorities here. The first is to adopt rules that establish standards and processes for reviewing, modifying, and approving ACO budgets. And the second is to adopt rules that establish standards that the board deems necessary and appropriate to the operation and evaluation of ACOs, including solvency and ability to assume risk. As you know, an ACO is an organization of healthcare providers that agrees to be accountable for the quality, cost, and overall care of the patients assigned to it, and so this process directly impacts not just the ACO, but the providers in it. The board has adopted rule 5, which specifies that the board may, as in the hospital budget review process, establish benchmarks to be used by ACOs in preparing their budgets, and the rule also specifies that the board will establish a budget for the ACO by written order. The statute lists 16 factors for the board to consider in reviewing, modifying, and approving an ACO's budget. For ACOs with 10,000 or more attributed lives, these factors are mandatory and must be considered for ACOs with less than 10,000 attributed lives. The factors are discretionary and the board may consider as many of them as it deems appropriate to the ACO's size and scope. The factors cover, for example, the extent to which the ACO provides incentives for investments that strengthen primary care, integration of community-based providers into the care model, and investments in social determinants of health. I think partly because of that focus, the ACO budget process has focused to a greater degree on expenses than the hospital budget process. So what is the ACO investing in is a big part of that. In addition to the statutory factors, the rule specifies that the board will consider any benchmarks it has established, the elements of the ACO's payer programs, and any applicable requirements of the all-payer model statute or the all-payer model agreement, and then any issues, other issues at the board's discretion. And then like the hospital budget rule, the ACO budget rule says that ACOs must justify their proposed budgets. So Robin, you were correct to mention that the other meeting. With respect to budgets of risk-bearing ACOs, the rule says that the board will approve a maximum amount of risk that the ACO can assume as part of its budget. And then like the hospital budget rule, there are enforcement authorities. So for example, the board can review an ACO's performance under its budget at any time. Such reviews don't need to be limited to financial performance. They can cover any matter approved by the board as part of the ACO's budget. And the board can take remedial actions against an ACO that's failing to meet the requirements of an order. Remedial actions can include monitoring or auditing plans, corrective action plans, things like that. Moving on to the board's rate review authorities, the board has the authority to review and either approve, modify or disapprove rates for major medical health insurance policies. In terms of impact, as you know, this applies to individual small group and large group plans and fully insured association health plans. This is a relatively small and shrinking segment of the overall health insurance landscape in Vermont. And another dynamic to maybe be aware of or consider is that with the individual and small group plans, the board approves the premiums that people pay. Whereas with the large group plans, the board approves the formula and factors that will be used to develop the premiums. The premiums for large group plans are not uniform. They vary by group and they depend on the experience of each group. And then in deciding whether to approve, modify or disapprove a rate, the board is charged with determining whether the rate is affordable, promotes quality care, promotes access to health care, protects insurer or solvency and is not unjust, unfair, inequitable, misleading or contrary to law. The board will also determine whether a rate is excessive, inadequate or unfairly discriminatory. The board is supposed to consider changes in health care delivery, changes in payment methods and amounts and the Department of Financial Regulations opinion regarding the impact of the proposed rate on the insurers, solvency and reserves. I mentioned on an earlier slide that back in the mid 1970s, the Vermont Supreme Court construed a statute that's very similar to the board's rate review statute and held that it didn't authorize the Commissioner of Banking and Insurance to order an insurer to take certain specific actions. In response to those decisions, however, the legislature gave the Commissioner this authority, at least with respect to non-profit hospital and medical service corporations such as Blue Cross and HMOs such as MVP. This authority has been extended to the board as well. And so the board has the authority to issue supplemental orders and attach reasonable conditions and limitations to such orders provided it is found based on competent and substantial evidence that the orders and conditions are necessary to ensure that benefits and services are provided at minimum cost under efficient and economical management. The statutes specify that the board may not set payment or reimbursement rates through these supplemental orders except as provided by 18 VSA 93.75 and 93.76 and I'll cover those statutes in a minute but generally they authorize the board to implement by rule payment reform and cost containment methodologies such as global budgets or risk adjusted capitated payments and to set reasonable reimbursement rates for providers based on those methodologies. So sticking with the supplemental order authority here for a second, there is some case law interpreting this authority. It's worth mentioning. So in this case from 1984 the kind of what happened was the commissioner of banking and insurance denied Blue Cross's request for a 30% rate increase and issued four supplemental orders, one of which was aimed at reforming Blue Cross's hospital contracts. I won't cover all the details of it but it's kind of there on the slide. The court upheld the commissioner's authority to do that noting that the statute had been changed since the last decision. The court noted that the authority had been given to the commissioner to ensure that benefits and services are provided at minimum cost and hospital costs are a significant component of healthcare expenditures. The court wrote that if the commissioner didn't have the authority to order Blue Cross to reform its contracts, he would be in an untenable position of being required to ensure that subscriber rates were not excessive, inadequate or unfairly discriminatory and that rates, excuse me, and that benefits and services were being provided at minimum cost but he wouldn't have the means to actively bring that about. The second case is from 1990 and it dealt with a supplemental order aimed at Blue Cross's administrative expenses. I won't talk about it much. It doesn't really add too much in terms of interpreting kind of the authority under the statute. It is interesting in its discussion of due process. Essentially, the court analyzed whether the subject matter of the supplemental orders had been effectively communicated to Blue Cross so that Blue Cross had a fair opportunity to respond to and offer objections. But in terms of authority, it doesn't add too much. Moving on from a rate review, the board has a duty to oversee the development and implementation of healthcare payment and delivery system reforms and to evaluate the effectiveness of those reforms and in connection with that duty, the board has a duty to implement by rule methodologies for achieving payment reform and containing costs that may include the participation of Medicare and Medicaid. The statute lists several types of payment reform or cost containment methodologies that could be implemented by the board. They include healthcare professional cost containment targets, global payments, bundled payments, global budgets, risk adjusted capitated payments, or other uniform payment methods and amounts for integrated delivery systems, healthcare professionals, or other provider arrangements. Just a note to note here that the statute talks about how the board should develop these payment reform and cost containment methodologies. For example, the board must engage for monitors and providers and it must report its proposed methodologies to the healthcare committees and the legislature before it initially adopts them in a rule. The board also has rate-setting authority. Specifically, the board is directed to set reasonable rates for healthcare professionals and others based on methodologies pursuant to the statute I just covered, 18VSA 9375 in order to have consistently inbursement amounts accepted by providers. Just a note here that while the board's rate-setting authority is connected to its authority to establish payment reform and cost containment methodologies, they are not the same thing. For example, the board could, like Rhode Island, establish a primary care spending target for health insurers under its authority to establish payment reform and cost containment methodologies, but that would be different than directly setting rates for primary care providers under the board's rate-setting authority. Going to hospital global budgets, on the other hand, depending on how you structure it, could implicate both the board's authority to implement payment reform methodologies and its authority to set payment rates. The legislative intent here in giving the board this authority was to ensure that payments to healthcare professionals are consistent with efficiency, economy, and quality of care and will permit them to provide on a solvent basis effective and efficient healthcare services that are in the public interest. The legislature also said that it wanted to eliminate cost shifting between payers to ensure that the amount paid is sufficient to enlist enough providers to ensure that health services are available to all their monitors and are distributed equitably. So these purposes, I think, tie in to a great extent with the issues you're dealing with in terms of the sustainability planning. A few other things to note about this statute. First, the board can implement rate-setting for different groups of healthcare professionals over time so it can start with hospitals, for example. Second, the board is supposed to approve payment methodologies that encourage cost containment, the provision of high-quality evidence-based health services in an integrated setting, patient self-management, access to primary care, health services for underserved individuals, populations, areas, and healthy lifestyles. So you'll obviously want to think about these goals and how they relate to any methodologies you consider, such as global hospital budgets. And then finally, in establishing rates, the board may consider legitimate differences in costs among healthcare professionals, such as the cost of providing specific necessary services or services that may not be available elsewhere in the state. The need for healthcare professionals in particular areas of the state, particularly underserved geographic or practice shortage areas. And then a pretty big caveat here that all payer model, all payer methodologies, sorry, that are not currently authorized by the all payer model agreement could require federal waivers. So this is not certainly something I'm an expert in, but if you wanted, if you were going to set Medicare reimbursement rates, there'd need to be multiple waivers of the IPPS, OVPS payment systems and payment programs from CMS. And if the board was going to set Medicaid rates, that would also require waiver, I think, at least of the single state agency requirements, among others. I'm not sure what others, but just note that that is going to be needed if we're talking about all payer model methodologies. And then last but not least, the sustainability work seems to implicate, sorry, the ATRAP health resource allocation plan. This is supposed to identify Vermont's critical health needs, goods, services, and resources. And as you know, it's relevant to Certificate of Need program, but it's really supposed to be there to inform the board's regulatory processes at large and its cost containment and reform initiatives, as well as any allocation of health resources within the state. So that is all I had. Happy to take questions. So since we are on time schedule for Mike, I will ask that we ask Mike the questions now, and then we'll move to Elena after that. So does any member of the board have questions for Mike? I just have a quick one, which is I think it might be helpful to just briefly note some of the authorities that we have, but which have not been implemented or used just to alleviate confusion between the statutory powers versus what's currently done. Sure. You guys disappeared. We certainly have not exercised our rate-setting authority. The payment, yeah, and the payment methodologies by rule. I think Tom, I've heard loud and clear, particularly from Tom, but from other board members, the desire to require ex-perspective payments through rulemaking, and I'm working on that, but to date, we've not adopted a rule around that. There are some other frankly authorities that the board has around quality that have not been exercised, but I didn't cover those here, so I won't spend time on that. Thank you. Other comments or questions for Mike? Okay. Mike, a question on, before you go, would it be necessary to open it up for public comment at this point, or should that be held till later? I think it probably makes sense to hold it till later. It's all kind of the same topic, I would say, and I'll be here until 2.15, and then I just got to run for 10 minutes, so I'll be around. Okay. I guess we were assuming Elena was going to go for a long period of time. Thank you, Mike. At this point, we're going to turn it over to Elena. Okay. Thank you. So I apologize for any background noise. We are all in quarantine at my house. I will share my screen. Let me know if you can see that. Yes. Okay. Now I just have to find. All right, and I'm on the wrong side. Okay. So I'm here to continue the conversation. Thank you, Michael Barber, for setting this up. First, so this is really to synthesize what you've been hearing over the last number of years, really, and to think about paths forward and kind of agree on some key findings and key insights that could motivate how we can think about recommendations to the legislature, but also how to evolve the board's regulatory levers in a way that might help us get our arms more closely. I don't think the board has all the tools, but how can we move more closely towards a more sustainable health system and for our hospitals? So I'll talk a little bit about the background, key findings, then pass forward and I'll pause for your feedback, kind of throughout this presentation. A lot of the content, though, building up to the key findings should be familiar to you by now. They've been presented in multiple forums. Some of it comes from our hospital budget process, but this is really an opportunity for me to hear from you about what you think the priorities are and how we should kind of vision our next steps. So and pause and ask questions, clarifications anytime. So as a reminder in 2019, the Green Mount Care Board required six of the 14 hospitals to participate in hospital sustainability planning, which at the time looked very different and was kind of a series of questions according to a framework for the hospitals to help us understand what they were doing about their sustainability challenge. As we dug into this more and COVID kind of came upon us, you know, this change and I think we recognize the systemic issues that were kind of bigger than what the hospitals could do and really required a different set of analyses. And I think it was one of, you know, when we had some of these early meetings of hospitals that, you know, they had articulated me, why don't you just start with the capacity analysis, you know, let us know what we're dealing with as a state. We don't operate in silos. We have, we share patients, we share, you know, bigger issues. So that really got us thinking in a different way. And with COVID, you know, they they're banned with certainly shrunk, as it should, so they could focus and prioritize, you know, patient care. And we kind of followed up on that and and did some some preliminary analysis to get this going. And then in 2020, the legislature kind of, I think, shares some of the same concerns that the board had seen and codified this work into statute and asked us to consider ways to increase financial sustainability of Vermont hospitals, but also in the context of achieving population based health improvements and maintaining community access to essential services. So, you know, I think that's where this affordability challenge comes into play that, you know, if we don't consider access and affordability, you know, these these things could continue to get out of whack. So I'm just quick reminder of your homework this and I think I mentioned this, you know, I'm hoping this will be more conversational. I tried to put some links here to some of the previous resources, but would love to hear your insights on what you think, you know, how we should be framing these key findings. And if there are any that I've missed at the end, I would love to hear that. And then recommendations. So, you know, we know that the hospitals have not been able to participate with us in, in a way that we can get to some concrete recommendations. But I think we can provide some guardrails and some kind of next steps in terms of a process for how we might get to this optimized vision shared vision as a state. And so, you know, what what can we do there but also then looking within ourselves at the board, what can we be doing differently and how should we be evolving to make sure that we are robust to some of these issues as well. Okay, so I will dig in now. So I did want to pause and talk again about COVID. You know, I think we do recognize the challenges that are ahead of us and the data that we have are only as good as as they mean something going forward. And I think the best source of information we have for looking at long term trends really go up to 2019. And, you know, we're still in the midst of this pandemic. This does not mean that our prior world will just somehow kind of turn back on and we will go back to it. But I think it it gives us an idea of trends and of longer term kind of knowledge of what's happening across the system. That doesn't mean that we won't need to update analyses as we go forward or as COVID and some of the utilization patterns kind of settle that we might not have things to learn. So I think we this is again an ongoing conversation. But for the purposes of what we're doing today, we've been looking predominantly at 2019 and prior. Okay. So this slide you should should be familiar with, you know, rural hospital closure is is substantial 181 hospitals have closed nationally since 2005. So this problem is not unique to Vermont. And that rate of closure has only been increasing. And then certainly the pandemic, you know, put a whole another challenge to these issues. And then, you know, what's really important to know is that the median overall profit margin is is a strong predictor of hospital closure. And that's, I think what signaled a lot of alarm to board members and why we know we're continuing to push to have this conversation now, before we see continued challenges to the system. And hospital closures not only threaten patient access, but also materially affect the local economy. So, you know, if we do nothing, we could see kind of a ripple effect of repercussions. And then, you know, certainly there has been a canary in the coal mine, which we all know in the southern part of the state. And we just want to make sure that that doesn't happen again. So the growing challenges faced by rural hospitals is, you know, not all these are unique to Vermont, certainly, but declining populations, rising medical inflation, rising costs, workforce challenges, rural bypass for larger community hospitals or towards, you know, academic medical centers, aging plant needed investments in population health under value based care models. You know, these things aren't free, even though they'll have longer term payoffs, it takes money and resources to get that going. Technological and clinical inflation requirements and managing a public health crisis is certainly a challenge that we're still all facing right now. So here's one of the earlier slides that you've seen. Just very dramatic decline in margin, operating margin over the last five years. In 2020, there were some federal funds that helped kind of stabilize, though not a healthy system. So, you know, we don't want to kind of return to where we were and to the trends that existed before the pandemic, which were largely based on kind of this fee for service and volume base model. And so how can we think about strengthening our system and ensuring that, you know, it's strong, capable and able to serve remonters to the best extent possible and forward. The reason for this is, you know, revenues outpacing expenditures, we all would be nice, expenditures outpacing revenues. So costs are continuing to increase despite kind of reductions on the top line. So costs of labor and benefits are increasing, costs of supplies, pharmaceuticals, and then aging population is more expensive to care for individuals with greater chronic conditions. And this is a system-wide issue. So you'll see that largely most of our hospitals have experienced some kind of challenge over the last couple years. But, you know, this is compounding and expanding. Total margin looks better, but this is not a sustainable source of revenue. And so we really want to make sure that operationally that we are sound. Other operating revenue, I think this just speaks to the COVID relief funds and 340B is another example here. So, you know, there are other ways that hospitals have cobbled together means to keep going. But, you know, that's not, again, it puts us in a precarious situation. Age of plant is a growing concern and is a real problem in some areas. So, you know, and this will only get worse if they can't maintain margins or they have very slim margins. Margens are not a bad thing. We need to have a little wiggle room so that we can invest and that we can stay on top of, you know, advances in medicine and making sure that we're delivering the best possible care. So why does this matter? I think we'll speak, I spoke to this a little bit and I'll continue to highlight why we need to continue down this path. Affordability, quality and access. You know, affordability in Vermont hospitals primary levers to increase operating margin is commercial price. And this really only exacerbates affordability crisis because their government payments are largely stable. So if that doesn't kind of meet their needs, then the commercial price is where they have room to lean. On the quality side, we know from the literature that hospitals and financial distress struggle to maintain quality and patient safety and often have worse patient outcomes relative to well-resourced hospitals. If we do nothing, and hospitals continue to decline, we may see that bleed into some of our quality outcomes of Fervor Monters. And then access, as I mentioned before, financial distress is a key predictor of hospital closure, which could leave some communities without access to care or would have to drive, you know, double or triple the time it takes to get to those services, which for emergent services is, you know, a big problem. So key finding number one, I think, is just, you know, financial health of Vermont hospitals is assessed by operating margin, declined over six recent fiscal years. This means that the cost of delivering care is increasing faster than payments to hospitals for providing services to patients. Left alone, this trend could lead to the erosion of service quality, reduced affordability, and or hospital closures. Hospital closures compromise access to essential services, and have been growing concern among rural hospitals across the US. And while non-operating revenue sources offer some relief, this is not sustainable. So I'll pause there for our first one. Hopefully this one isn't controversial, but I will open it up and see if you all have any thoughts. Hi, Elena. One tension that I kind of noticed thinking about this is that there's a timeline issue here that we might want to consider that, you know, yes, in as we struggle with the pandemic, that's a near-term issue as we deal with Medicare on reconcilable FPPs. That's another timeline a few years down the line. At the end of the, say, the all-pair model number two, we might be down out at 2028. And by then, people might have processed fatigue, which some folks have talked about. And so I'm just wondering how we kind of put together a timeline that kind of maybe projects out the trajectories of stuff that we've already got in play and kind of think that through so that people kind of know where we are and know where we're going. And is this going to be, I mean, Stroutwater recommended 2030, you know, as kind of the end date. To me, personally, that seems too far out. The end of all-pair model two would be 2028. That still seems far out. But on the other hand, you know, we need to have the time up front for the hospitals to kind of get back to a stable situation. And that's something we don't control and we just have to wait until we get there. You know, I think that's a really great question. I'm not sure I have all the answers for you today, but I think that's something I could take back and work with directors and our other state partners on. But I think, you know, getting to what we call the optimal, you know, that's a long, lifelong journey. You know, I think there's a lot of learning. I don't think anyone has all the answers, but I think there's things that we can do now, things that we can do over the next couple years and things that we can continue to work towards as a state. But I agree that we need, we need to establish that shared vision and that shared timeline and hold each other accountable to it. I think the all-pair model timeline is definitely one that needs to be considered in this work, because I think there's some opportunities there, I think, but even in the next budget, the hospital budget cycle, there are probably some things that we can think about doing differently there. So I think, you know, for an official timeline, I think we can get back to you. But hopefully, if you have thoughts on what you think, I'm happy to take those back. The major thought I have is what on the timeline do we not control? I mean, if you look at the trajectory of the trend on operating margins, you know, that trend line, including UVM Medical Center and without UVM Medical Center, is heading in the wrong direction. And how long can it continue in that direction in another year, another two years, another three years? And at the same time, you know, the investments that we're trying to make to kind of reform the system are in play. And I just think that that's something we don't control and we really have to respond to and respect. Yeah, thank you, Tom. Anything else? I'll go ahead and jump in. I think in response first to Tom's timeline question, I think when we get to next steps, it would be nice to think about that in relationship to the next steps. But it certainly makes sense to me to have you think about it on a bigger scale and come back with some ideas, because I do think it's good to at least identify, even if we don't feel like we can pick a timeline that identified that that is clearly a next step and probably involves other stakeholders. But in terms of this particular finding, I felt like it did a good job summarizing kind of what we've been talking about around and worrying about really with the hospital financial health. So I didn't have any specific adjustments or anything that I felt like was missing from this particular one. I'll just agree with that with what Robin just said. I thought the verbiage here was perfect. I think it summarizes exactly where actually precipitated all the sustainability planning efforts, the concerns we have. And to me, I just look at those graphs that you presented, Elena, and it's just so deeply troubling to see those operating margins shrinking. I know you're going to get to this in a second, but cost coverage of public payers is part of that problem. It's contributing to that. I also think, I know you're going to get to this, but reliance on fee for service is not sustainable in communities that have declining populations and where care is being moved out of the hospitals into their patient settings. You can't rely on volume to cover fixed costs if the volume is shrinking. So I think you're going to get to some of those solutions. But left alone, we're in trouble. So I think this is an excellent key finding and the sense of urgency is there. Elena, this is Tom Walsh. I just echoed my fellow board members. I mean, this key finding really highlights the need to not stand still. We're in a crisis, but there was a crisis brewing before the pandemic. And standing still, letting one crisis unfold and another not addressing the other, I think is would not be a good move. So I appreciate the effort that you've put forth in kind of developing the why behind all of this and why we need to be moving forward now. I would just say ditto, Elena. Thank you. And I don't expect if you don't have, you know, we don't have to do a full round, but this is great. This is thank you all for the thoughts and the feedback. Okay, so we have 63 slides. I'm going to try to not make it a two hour presentation, but this is important. Okay, so prices vary by hospital, payer and setting. So this should look familiar to you or some analyses that Burns and HMA put together for us not too long ago, looking at hospital specific price variation. And so they grouped it by kind of critical access. CAH is critical access hospital, PPS hospitals, so those medium sized hospitals and then academic medical centers. And you can see that there's, you know, quite a bit of variation across the left is inpatient if it's very small writing the right is outpatient. And so, you know, this even after adjusting for case mix, this variation is quite persistent. And this, you know, means that there's different kind of bargaining power, I think across hospitals or could mean, you know, as one, one explanation, different bargaining power across hospitals and their ability to drive prices. And then we know that costs vary. So this could also, there are a number of explanations here, but there's variation in hospitals to deliver certain this is an aggregate level. So certain package of services more or less efficiently than others. And then there, this is cost coverage by hospital by payer and care setting. So inpatient or outpatient. And so a couple of things you'll notice here is that for government payers, those generally less able. So the red is below 85% cost coverage. The gray is, you know, around, you know, 95 to 105% of cost coverage. That means like you're the cost in the price are roughly equivalent. And then the green is higher revenue than cost, so higher price than cost. So that's around 100, over 115%. So commercial you'll see is more likely, particularly in outpatient setting, to be to cover the cost of delivering care. But commercial inpatient, you'll just see on the whole inpatient is a little rockier of a setting than outpatient. But that there is certainly a shift in ability of hospitals to cover their costs depending on the payer. And so, you know, and this varies by service category. So depending on what services hospitals offer, you know, this will affect their kind of cost model. And this and particular some services while they're, you know, on the whole, you know, more likely to have a higher price if, you know, for a commercial patient, sometimes that that in some cases does invert. The key finding here is that there's significant variation across hospitals and the extent to which reimbursements cover the costs of delivering a particular service, even after controlling for case mix. And this varies by payer and care setting. So inpatient outpatient. And these variations could be driven by relative efficiency or pricing strategy, which are or likely both, you know, these things are not mutually exclusive. Commercial payments are higher than governmental payments for similar services. And often governmental payments are insufficient to cover the current cost of delivering many services to patients. This disadvantages those hospitals and populations that serve a higher proportion of patients that are insured by government payers, which are often those patients with greater social and physical health needs. So I'll pause there for thoughts and feedback. Hey, Elena. This is Tom Walsh. When you're talking about cost coverage, could you tell me a little bit more is the cost figure? Is that what the delivery system is charging? Is that the base number that we're comparing to? So the cost is based on the claims data. So I think we use the Medicare cost reports. And then there was a method used to take that allocation method and apply it to the other payers. So it is an estimate of cost. It's not perfect. We do not have cost accounting systems in all of our hospitals. That would be nice. But that would be in another administrative burden. Anyway, yeah, so it is an estimate of cost. Yeah, I'll pause there. It's an important point that the language becomes important as we're trying to build shared knowledge and shared understanding across a state, really. But if I'm in private practice as a physical therapist and I have a treatment that I charge $100 for and government payments pay me $85. That's a 15% loss, right? They're covering 85%. But that $100 isn't really my cost of doing care. It's what I charge. It doesn't reflect fully the direct and indirect costs, the fixed and variable costs associated with the time and the people and the activities that they're doing. And so it's important in my experience across multiple healthcare delivery systems, it's important that we get to some shared understanding of the limitations of these words. And that's just an important thing that as we move forward, I believe we'll have to spend a good deal of time developing shared language and shared knowledge to get to some shared understanding between and amongst ourselves. Thank you. That's an excellent point. So maybe if I weave in some of the definitions here of how we approached cost and price in the analyses that we're leaning on, maybe that would help. Yeah, I think it would. And there's a risk, of course, of going too deep with how Medicare estimates the cost of care. But at least among the board, I think that that'd be good for us to dive into a bit deeper. I think the reliance on assuming a charge is the same as a cost can be a roadblock to reform efforts. If we believe that what I'm charging is my cost, any time there's a payment to me under my charge, it will feel to me like a threat and a loss and can be perceived as that. But if my actual cost of doing the time and the activities to deliver the care, I can get that below what I'm reimbursed, even if my charge is different. They're different things. Cost and charge are different things. But we use the terms interchangeably. So it's a really important point. And you're going to see in your first hospital budget process this summer, Tom, that some frustration because when you're setting a change in charge, one hospital might be reimbursed 85%, another one 80%, another one 89% of their charges. So you're really not seeing what the actual reimbursements are. And I would just say that that in conjunction with this key finding, the more fundamental question in my mind is, can the cost be reduced through efficiency? Thank you, Chair Mullen. In my experience, there are techniques. There are skills, principles, practices, software that can help with that. But they're not free. And to say that everybody should start doing those things now would not be sensitive to the operations that are happening around us. But to start, I think building the shared language and shared knowledge, your example was spot on, but it's even worse, right? Those numbers that you just provided can be in the same facility for the same service, just with different reimbursement, depends on the negotiation between the provider and the payer. Absolutely. Yeah. And I think your points, while taking that, despite the definitions, costs are not fixed. And that I think that's kind of why we have healthcare reform to think about whether and when costs of delivering healthcare or the spending in general is utilization appropriate, which we'll get to. But I think that is something that as a state, we need to kind of have some, like you said, clear definitions and that will help us move towards that vision. Thank you. I think just to build on that a little bit, I think to Tom's point, it would be helpful in the report to give definitions. As you mentioned, Elena, I think the prices and the payments were taken from claims data, what the hospitals were reimbursed by the insurers. The cost data was taken from the Medicare cost reports. This is what the hospitals self-reported their costs were. And then the charges were taken from the charge master of those hospitals. So those are the three definitions that were used in the analyses that HMA burns provided to us. And so maybe it'd be helpful to just clarify there is that we use the terms payment, charge, and cost very specifically in these analyses. And so for me, maybe just to build on that, I found these analyses incredibly helpful to my understanding. And frankly, it raised a lot more questions. It gave me some understanding, but it raised a lot more questions. There was wide variation in payments. They weren't always tied to underlying costs reported by the hospitals for those services. And in many cases, you would see wide variation in average costs of providing those services. So I think we need to understand it better. This is the first look at this HMA analysis. So one possible takeaway that I have for other board members and maybe our data and hospital budget teams to consider is how might we incorporate price and cost and cost coverage analyses like this in our processes going forward, specifically in our hospital budget process, but also maybe in our rate review process. And also one of the things that the consultant did not do is they didn't look at reimbursements for professional services. So should be looking at that as well in our future analysis. So I will leave that for our data and hospital budget teams to consider. At the very least, one of the key takeaways that I came up with was I think we may want to separately evaluate commercial rate requests of hospitals for inpatient, outpatient, and professional services separately. So I learned a lot from looking at this and there's huge variation. Like I think, for example, one of the takeaways for me was smaller hospitals are actually getting higher reimbursements for outpatient care than even the academic medical centers. That surprised me. It may surprise communities that they're paying more for outpatient services in their local communities than elsewhere. There's lots of, you know, perceptions about out there about where are the highest prices? And at least on the outpatient side, the highest prices were in some of the smaller communities. And so I think we just need to understand that a little bit better. And I also think in terms of the cost coverage data that was provided by HMA Burns, the evidence was striking. It's not new, but it's when you see all of that red on those charts, it's very clear that neither Medicaid nor Medicare are covering the cost of delivering care to their patients. And if the Medicaid and Medicare patient populations continue to grow, which we're seeing, and our commercial populations continue to shrink, and if the public payers fail to keep up with inflation, some of our most vulnerable communities are going to lose access to essential services. So I think the takeaways for me as we go forward are thinking about, we need to explore ways to address Medicare shrinking cost coverage in the next federal agreement, if that's a possibility, at least it should be on the table to be thinking about. And I think we may want to discuss as a board whether we want to, you know, add to the February 1st report to the legislature a discussion of the impact that Medicaid shrinking cost coverage has on hospital sustainability. There's a role to play here for the legislature. And if Medicaid reimbursements don't at least keep pace with inflation, then there's going to be implications for hospital solvency, access and quality of care. So those were some of my takeaways from the data that you just presented and some of the information that we've heard related to key finding number two. Yeah, I'd like to as quick as I can add to that. I've been very critical of the cost shift in thinking that the cost shift could not in our annual report that we just issued the cost shift prior through 2019 has been growing at 9.1%. And if that is truly the cost shift, i.e., Medicaid not covering costs at a growth rate of 9.1%, that could be fatal. But then during the hearings that we had with the consultants, you know, I raised the issue of the cost shift and the consultant said, well, the cost shift isn't what you think it's really the market power of the hospitals relative to the commercial folks. And so it's not it's not a cost shift. It's the it's hospitals using their market power to get more out of the commercial folks. And that may be true or may not be true. I don't know. But I just think it's important that on price and cost, we dig deeper to come to a truly consensus understanding of what's what. And I think Tom's point is a very valuable point. And I think that that's an area where we don't do our data well, you know, we price variation, etc. We don't do that well. And I think that is an area that we have to pick up the pace a little bit. Thank you both. I've made notes. Anyone else on this one? The charges first payments. So this was out of the the same analysis. And this just showed that there was not a one to one correlation between charges and payments. And so what this means for staff key finding number three, to your point, I think we talked about the definition, so I won't spend much time there. But in Vermont hospital prices are regulated through the board's review and approval of hospitals commercial change in charge in the hospital budget review process. However, changes to a hospital's charge master is not the best way to influence the net payment received and to address affordability. So pause there for thoughts or feedback on the language. This is Robin. I thought this did a good job as I frequently say in our meetings, when I think about the hospital budget process, I think of it as a sledgehammer, not a scalpel. And that's particularly true when we're setting the charge, the charge increases. So I do think this is an area that it would be good to think about for future hospital budget processes, how we can move forward with a more nuanced approach to make it more effective. Yeah, I guess I'll just add there, it's clear from that data that burns presented that the relationship between charges and payments is weak. And it's especially weak for outpatient care, which seems to be, as we know, an increasing share of hospital revenues. So I guess I would ask again for the data team and the hospital budget team to work together to help us think about how we might use some of this price and cost analysis to make more informed hospital budget decisions going forward. What would be a better lever if change in charge is a weak instrument? What would be a better way to make more informed hospital budget decisions? Hi, Elaine. It's Tom Walsh again. I just add to that that in addition to the the price reimbursement costs, those definitions, and when we are having our budget team look at that, the other piece we have to be looking at is just utilization rates, right? Because if I I'll go back to the example of me in private practice, if I charge $100 for my service and the reimbursement gets capped at $90 and I feel that I'm always losing, right? The way that I would try to survive is to see more people, right? And if my schedule is already full, then I'll feel like there's a workforce shortage. I don't have enough people, right? And so these issues are interconnected. And when we're when we talk about putting a cap on a charge or a price, the variability that your the data have shown so far, that variation will just reappear in utilization records. And so you have to watch both because it becomes an issue like pushing on a balloon, right? It just bulges in another place. The third thing that we'll need to design systems to be able to look at, of course, are going to be the outcomes that are produced. Because if we're trying to lower prices or control prices and monitor utilization, we've got to make sure that people are still getting the health care they need and they're healthy. Thank you. And I think I don't want to well, spoiler alert, you know, I think part of the problem is the fee for service structure, which which is creating all of these dynamics that you're describing that, you know, my rate isn't enough. I need to bring in more volume. Oh, I don't have enough people to service this volume. And it's just the cycle, right? And I think, you know, part of this is, you know, if we can get to global budgets, might that alleviate not only the financial constraints, but also the volume constraints and allow providers to really focusing on the right care, the right time, the right setting. You know, so that's something I hope you all will keep in mind as we go through this presentation, but, you know, we'll get there. But I think that's a very good point that in our current environment, you can't just look at cost price that we also have to think about how this affects utilization and ultimately Vermonters health outcomes. Okay. I'm going on. All right. So I think, you know, hopefully we want to spend much time here, but the levers that hospitals have in our current structured environment are to increase commercial prices, reduce operational costs and increase volumes. I think Tom, while she just did a great job describing those levers in the current situation. So, you know, there's this tension, right, between hospitals and using those levers and the affordability of healthcare to Vermonters. So hospitals have to increase commercial rates, you know, that doesn't come without an offset to what Vermonters feel in terms of their premiums, what employers have to take out of their paychecks to pay for that care. And so it doesn't just come out of thin air that these are real costs even though they may not be an official tax. It is a tax to the system and to Vermonters. And we know that this is being felt on the ground already. This was in 2018. I think this is a HHS, this household health insurance survey. You know, so more than a quarter of those are uninsured, who are uninsured work for an employer who offers health insurance. A large proportion of these people indicate that cost is either the only reason or one of the main reasons that they do not have health insurance. Not being on the state insurance anymore, I can tell you for a small Vermont company that my husband works for, this is a real problem and has been a problem, you know, personally. Overall, more than a third of Vermonters under the age of 65 are underinsured. And among those who have private health insurance, 40% can be considered underinsured. And the proportion of Vermonters younger than 65 who have private health insurance are underinsured. And that's increased from 2014 when it was 27%. So, you know, this is a real problem and it's affecting Vermonters. And again, if left alone, this will only get worse. So, you know, I've seen it in premium rate growth. I, you know, I think the 2022 is a little misleading, but all the years prior to that, you know, we're seeing upwards of double digit increases, which is nowhere close to inflation, you know, and these are real, real charges or sorry, shouldn't use that word real, these are felt by Vermonters in terms of what comes out of their pocket. And then we've seen it in the hospital budget process. These are the commercial charges increased year over year from 2017 to 2021. And so, you know, the commercial rate increases, increases not only lead to higher premiums, making private health insurance less and less affordable for Vermonters, but this pool, this commercial pool has been shrinking in Vermont. So that means that the number of Vermonters who are expected to shoulder these increasing increases is smaller. And so those increases will have to be higher and higher in order to make those gaps. And at some point, it may not be sufficient to keep hospitals afloat. So between 2013 and 2019, Medicaid Medicare populations grew compared to the privately insured. So the staff key finding here, the magnitude and growth of commercial rates has created significant affordability problems for employers and for Vermont residents with employer based coverage, continuing to rely on this mechanism will only exacerbate the affordability crisis, potentially compromising access to care of the commercially insured as care becomes increasingly cost prohibitive. Further commercial rate increases are an unsustainable lever to address hospital financial health. And due to declining commercial population in Vermont, and at some point may be insufficient to keep hospitals open, another risk to Vermonters continued access to essential services. So I'll pause there. So Elena, one statistic that I noticed during going to the ACO budget process was looking at the rate of growth. I think it was 22 over projected 21 of the kind of fee for service payments versus the fixed perspective payments. And so the fee for service payments as a total were growing at an 11.6% rate year over year. And the fixed perspective payments that went through the ACO were growing at 9.5% a year. That's a small percentage, but it's a 22% difference. And so even within the ACO, we kind of lost some ground to fee for service. And I just I'm not asking that I just make that point, because time is somewhat of the essence here. And even though even though both fee for service and FPP grew, fee for service grew faster than FPP. And for us to kind of, I would think be able to say that things are going in the right direction, that would be the other way around that fixed perspective payments would be growing at a faster rate than fee for service. Just an observation. Yeah, thank you. And just as a reminder, I mean, I think the board should know this, but that ACO and hospital budgets overlap but are not concentric circles. Yeah. Oh, and I'll just say I agree with this finding. So I think the the way it's outlined is exactly what I believe is actually happening. So. Okay, thank you. Okay, we will move to the next one. So I think we can all agree that commercial prices are not the way to solve this problem. So what about reducing operational costs? I think we've touched on this a little bit.  You know, and change is hard, not just change is hard, but sometimes if you're so small, there's not really a whole lot of room to cut. So a few reasons for these challenges, you know, small rural hospitals struggle struggle to cover the fixed costs of running a hospital. Recruitment challenges are also a problem and lead to higher staffing costs. So as a reminder, the majority of a hospital's budget is for its people. So that becomes extremely costly, particularly as there's this shift to travelers and, you know, different staff can demand higher wages and then lower volumes. So you have fewer people coming in the door, and this is the same problem I think we've been describing in the fee for service environment. So these challenges will only worsen as plant ages and capital investment becomes more expensive. Workforce wages put higher pressure on wages and volume strength due to declining populations and, you know, the shifts away from inpatient care. So I hope I'm not repeating myself. I just want to make sure we're all very clear about the dynamics that we're witnessing. And then so according to the Berkeley research groups analysis, small Vermont hospitals face low occupancy rates pre-COVID. Some hospitals may face excessive or excess capacity in the future, particularly given Dartmouth's expansion and our population decline. Though other hospitals may need expanded capacity to population growth. So this is not, you know, one trend across the state that, depending on what community you're in, these dynamics may look a little bit different. So the low volumes in certain services may increase costs and compromise quality. We know that particularly for some low volume services. There are concerns about, you know, how many services you need to be delivering to ensure a certain threshold of quality. And centers of excellence may be a path forward to think about efficiency, financial sustainability, and high quality care. So the staff keep finding here, you know, while improving hospital operational efficiency is necessary and important for minimizing healthcare spending waste and improving quality, focusing within a hospital alone is unlikely to solve the issue of financial sustainability due to the small size of many hospitals in Vermont and other rural areas and relatively high fixed costs. Thus any significant opportunities to increase efficiency will require streamlining operations. So we could think about centers of excellence recommendation, for example, and eliminating duplicative services across the entire system of inpatient, outpatient care. And before I pause here, and maybe I should have written it in the finding, this is not saying that the board shall determine how this is done. This is simply saying that as a state, if we're serious about looking at operational costs and rethinking and reshaping the cost of healthcare, that these are things that we will need to think about as a state. So I don't want anyone to come away with this key findings with the idea that I'm suggesting the board do anything at this time. This is just stating the problem for the state to think about how to solve. So thank you. Any feedback? So I may be reacting to the concept of operational efficiency as it's used here, but what I struggle with with this finding is that there is a balance between the system-wide data and information and then how change actually happens, which requires that to happen not at the state level, but at individual provider levels, right? So I think what we're trying to say here is that hospitals, and I think we did hear this from the hospitals, they're not going to be able to cut their way out of the problem. But I do think, and so maybe it's just a matter of being a little more clear that that's what the first clause is implying, that the hospitals can't just cut their way out and that something more transformative operationally would need to happen, but for me that this sort of minimizes the way the finding strikes me, and it may just be me, is that it kind of minimizes the amount of work that has to happen at the individual provider level to make the change. Because even if you're looking at a center of excellence, that from that flows a billion operational changes that would have to happen at multiple places, right? So I don't have specific language suggestions, but I think there needs to be a little bit of tweaking here to kind of balance that a little more. In my opinion, other people may disagree with me. No, I can see that. Thank you, Rob. Right, because I think, so what the example I would give is, one way to reduce cost is to get all your orthopedic surgeons to agree to use the same joint, right? And that sounds like it should be super easy, but it's actually an incredibly difficult, challenging operational effort that would actually take way more time than many of us would think. And that could have significant cost savings. It's probably not going to help if the hospital has consistently been in the red as the only initiative, right? Like it's not going to solve all the problem. It could help a little bit. So and that may be, but I would say that getting that done is still very challenging, potentially, for a hospital to do, depending on their culture and the physician leadership in that area. I'll work on that. Any other thoughts? Yeah, Elena, this is Tom Walsh again. I think so far through everything that you've presented, you've done a nice job showing that we're facing systemic problems. And so a key insight with that is no one facility on its own can solve the systemic problems. It will take a systemic response. Yeah, no, I think that's what I was trying to convey. And I think Robin's point is a good one that we can't minimize the effort that would be required in either situation on the part of the provider to innovate. I think I was just thinking, can you flip this to staff finding six, which is the next one? Because in some ways I think maybe it's a matter of, if you speak about this in a second, then maybe I can, maybe it's a matter of combining five and six in some way. Yeah, maybe I'll read it and get your thoughts on this. So preliminary analysis suggests that absent COVID demands Vermont's care delivery system is over capacity in some areas and under capacity in others. Several Vermont hospitals are operating in a very low occupancy and some of these hospitals are located relatively close to one another. This suggests that despite demographic shifts over time, right sizing of hospital infrastructure has not kept pace. Projections of Vermont population demographics indicate that post COVID the mismatch between need and distribution of capacity across the state are expected to widen absent any changes. COVID has also revealed the need of health systems to pivot quickly to meet evolving patient needs but also that maintaining cross the excessive capacity is not necessary as hospitals have the ability to innovate in response to changing environments. Given these trends and lessons learned, there's an opportunity to strengthen Vermont's health system and rethink the structure of care delivery to ensure it is efficient, nimble and innovative and prepared to serve Vermonter's high quality affordable care. So I think you're right. I think this speaks well with the last one as well. Yeah. Yeah, I must, I mean I kind of take, oh sorry, somebody else speaking? No, okay. I mean I kind of take findings five and six together and I think to Tom's point together, taken together the point is we need a systems approach to optimizing care delivery, right? And you know, let's be honest, this is where the conversations are going to be the most challenging and where we have to recognize that it's human nature to resist change, right? That's an emotional response status quo bias. It's a preference for the status quo and any change from the status quo is perceived as a loss. But I guess I would say we're not winning right now and many of our hospitals as you've shown us are struggling financially. Commercial rate growth is no longer going to be the backstop. Even if the board approved higher and higher commercial rates, there's not enough Vermonters to afford them. So that's not a sustainable path. And I guess when I think of these two key findings together, I think we know we can do better on cost, quality and access. And if we were to take a whiteboard and draw the optimal hospital delivery system, I guess the question we should all ask is would we end up with a delivery system that we have now? And if not, how do we get closer to the optimal delivery system that we might write on a whiteboard, right? And there's a lot of concern. We've been hearing about this on the news. It's the most pressing concern right now is our limited and shrinking healthcare workforce, right? So how do we deploy them in a way that's the most efficient and has the greatest impact on population health? That's part of that systems design. It's thinking about how do we design a system, our infrastructure, and how do we design a system that maximizes our workforce, which we know is going to be shrinking over time if we don't do something. And I think some of the questions that, the hardest questions that have to be asked and answered are which services need to be available locally? And these are essential services that have to be available locally. And then other services that could be better delivered at a center of excellence, right? That's a set of questions that we need to answer as a state holistically together, inclusively, inclusive of communities, inclusive of providers, inclusive of the state. And to the point and hear about the pandemic, the pandemic has taught us a lot, right? Technological innovation has showed us that we can meet people where they are through telemedicine, through remote monitoring. There's this new movement towards hospital at home that we heard about. And in a public health emergency, we saw that we could build a 400-bed hospital in one week, right? We saw that actually happen. So we need to take those learnings and move forward. And so I guess I would just echo kind of some of the points that we've heard earlier. We need to move forward together. It can't just be the Green Mountain Care Board to your point, Elena. It has to be the state. It has to be hospital leaders, hospital trustees, communities, patients, providers, together thinking about what does that optimal delivery system look like? And we have to resist status quo bias because if we don't and we stay on the same trajectory, we're going to end up with hospital closures, suboptimal access, suboptimal quality, and cost growth that we can't afford. On a more practical, immediate level, I would say the Green Mountain Care Board, what we can do internally ourselves is we should be improving our tracking of trying to figure out over and under capacity. I think we can do that by gathering better data on wait times, on borders in the hospital, whether they're boarding in the ED, or I'll call them boarding in inpatient areas where they subacute. They should be moved out of that setting, but there's no subacute setting available to them. So we need to figure out that. And looking at, you know, we collect data on occupancy rates and average daily census, but we don't really do much in the hospital budget process with it. We probably should. We should be looking at that data more carefully. And the analysis that was done by Berkeley Research Group, projecting bed need, I think we should continue to do that. We might have to fine tune it and tweak it and, you know, update it with 2020 census numbers and try and figure that out. But I think we need to continue to do that estimate of capacity needs and see where we're at over and under capacity. So I think that's a question I guess I would put out towards the hospital budget team. Again, in the data budget, the data team, how do we better track over and under capacity and future bed needs? Thank you. I do agree that there, you know, I think what I'm reacting to is that I don't disagree that a systematic system-wide look is important. But we don't have, like, there's no, our system is not a system that is structured around central planning or you know, creating and actually creating a structured delivery system, right? Like, our system involves 14 independent boards of trustees and lots of other provider entities. And so I think we just have to acknowledge in the finding that having information and data about the system as it exists today and what, and to Jess's point, projected potential needs of the population, that quite frankly all fits in very well with HRAP. But then to your earlier point, Elena, is then what happens with that. And I know we're going to talk about next steps after we get through the findings, but I just think it's important to make sure that the findings don't sound central planning, like a central planning entity is going to be doing this, because we don't have that. Like, we don't have that type of system in this country. And we alone are not going to create that for many reasons, including capacity, resources, appropriate staffing, appropriate, you know, contractors, etc. So that would just, these two findings to get, I agree they do come together. I just think they need to be nuanced a little bit to be more explicit that what we're talking about is really more like HRAP, creating the data and information to inform multiple parties decision making. That would make me feel more comfortable that we're not overstating sort of A, what we personally as an entity can do, which has its resource limits, or B, what we would think is necessarily going to happen as a result. Yeah, I think we can do that. Thank you. Okay, any other? And this is kind of a half-baked thought, so I probably shouldn't even say it. But one of the things that's true is that in terms of the cost shift, and in terms of the inefficiencies that may or may not be out there, that BRG and others have kind of identified, those payments all go through commercial insurers. And so my sense would be that the commercial insurance folks would have some very insightful insight into the operations of hospitals, or providers in general, because they sit at a kitchen table somewhere and they negotiate a deal. And so my general thought is to kind of keep the door open to put some of the burden on commercial insurers with their economic capabilities to affect changes that are clearly identified as areas for innovation or inefficiencies to be fixed. Instead of kind of keeping the money flowing, I certainly agree with Robin is that there is no way that we or any board could kind of specify a specific joint as an efficiency, although logic would say that that would be efficiency. But these are separate institutions and unique institutions, but we have insurers that are married to those institutions. And in the long run, it's in the insurer's interest, I would think, to make sure the system is as efficient as it can possibly be. So I just would put that on the table that kind of seeking avenues with commercial insurance folks to help unfund inefficiencies and to fund innovations is something that we might consider. Yeah, I guess I just want to follow up a little bit on that. I think this is an all-hands-on-deck kind of exercise that has to happen. I mean, I think all stakeholders, there's so many stakeholders that have to be involved in this process. And I think part of maybe what we need to be thinking about is who needs to be at the table to start moving things forward. And to Robin's point, this is a lot of this is beyond the Green Mountain Care Board. It's a conversation. It's learnings that we've gleaned from our process, but it doesn't mean that the Green Mountain Care Board alone can fix this. We can't. We are one piece of a larger puzzle. So it involves the legislature, it involves AHS, it involves commercial payers, it involves hospitals, it involves communities, patients. I mean, this is something that if we really want to ensure a sustainable hospital system, we really need all hands-on-deck. Any other thoughts before? And I'm not turning away. I'm writing notes, so... Okay, our time? I will go to the next one then. So I will, once we have worked that out, I think reducing operational costs at the hospital level alone, we don't expect this to move the needle sufficiently to address the problem. And so now we'll talk about volume. So what about increasing volume? So increasing volume may be warranted when there are gaps in access, but it could also lead to unnecessary expenditures and possibly worse health outcomes, depending on how that's done. The organization and delivery of services should be based on Vermonters needs and which services and care settings will yield the best possible outcomes. Healthcare reform and the shift to value-based care has been precisely focused on this issue. And according to some work by Mathematica on potentially avoidable utilization, there appear to be opportunities to further address some of the volume concerns that we've been talking about. So in their analysis, they looked at readmissions within 30 days, ambulatory care sensitive admissions, avoidable ED visits. So this wasn't just for Vermont, they created a tool for rural hospitals across the US and came to present. It was last September around then. So if you need a refresher, but they found that some ambulatory sensitive admissions were upwards of 30%, most hovering around 20. Same hospital readmissions were in the teens, but the proportion of revenue for avoidable utilization in ED visits was between 20% and 40%, which appears to be pretty significant. And so this, I'm recycling a slide I stole from Dr. Elliott Fisher who was here recently just to talk about one of the impetus for healthcare reform was thinking about all the different sources of waste and how we might begin to get US spending more in line with some of our peer countries, their failures of care delivery, failures of care coordination, over treatment, administrative complexity, pricing failures, and fraud and abuse. So some of these kind of fit into some of these discussions that we're talking about. And then other health care reform efforts that are kind of underway at this state.  And we know that there's support for this shift to value based care. It's quite bipartisan at this point. And then we know that there was a refresh and a recommitment to this view and Liz Fowler, now the head of CMMI, you know, we need to find a way to bring everyone along and we can't have fee for service remain a comfortable place to stay. Something she said earlier last year. We also know that the AHA has been, you know, pretty supportive of this shift and that during COVID they issued another survey and found that 49% of health care executives say they have a greater interest now in participating in value based care than they have before. And then, you know, an issue brief on global budgets. They actually had some support for this approach, which is one of the ways that you can shift to value based payments. And that would ensure access in rural communities. So, you know, that that is a theme that keeps coming back, but something that's perhaps worthwhile looking at given the, you know, the large support for that approach. So where are Vermont hospitals in their transition of value based care? On the right, you'll see the land category framework, which talks about all the different kinds of value based payments. And that this is not something that you traditionally, you know, switch on or off overnight and it has been largely opt in to date. And they have category one, which is, you know, fee for service, no link to quality or value. Category two, fee for service with a link to quality and value. Category three, alternative payment models. So that means something different here built on fee for service architecture, which is kind of where we are now. And then category four, population based payment. And when I say where we are now, I mean pieces of our system are here now, other pieces of our system are still in category one. And then category four is really where, you know, the theory says we need to be before we can really focus on population based outcomes. And that's population based payments. There's kind of a tiered approach. I think, you know, one of the things we'll get back to it at the end that we've been talking about is how do we get better reporting in our, you know, in our regulatory work on what kinds of participation we're seeing. We've heard that, you know, there's some hospitals participating in value based programs and outside of the state's all payer ACO model. So that would be important to know. But, you know, largely the proportion of revenue, you know, in 20, you know, was largely non-existent before 2017. That's when Medicaid kind of came to the table. And then we saw some increases. And in 2020, it's kind of resting around 15.7%. It's a system wide proportion of value based hospital revenue from Vermont residents. And so, you know, that might be an opportunity. So, despite being leaders in their commitment to value based care, in the shifting to value based payment, Vermont hospitals are still predominantly paid on a fee for service basis, which continues hospitals reliance on these volume driven strategies that we've been talking about in order to ensure their financial health. So open to feedback and thoughts on this one. So, can you go back to the prior slide? I just think it's important to note that you're looking at the proportion of revenue in prospective payments. And I recognize that 15.7% from the last budget process. And I think that was slightly lower than the, but it's in that range. But that percentage is basically driven by Medicare payments and Medicaid payments. And not very much at all, less than a percent of it is commercial payments. And I just think that's an important proportionality to keep in mind. When I look at the hospital data, and you see that the Medicaid expanded and Medicaid traditional folks are in the 35 to 45% FPP broadly defined. And the Medicare is around 45%. And that's what gets you up to that 15 points or down to that 15.7%. But a question I have is, what is the right number? I mean, is there a target for fixed prospective payments? And let's say category three and category four payments that we want to get to to leverage the innovation and efficiencies we're hoping for. Is it 100% or is it 50%? I don't know. I can see from the hospital budget process where we're at. But I don't know where we want to be. I don't know if our goal is 100% or 80% or 60% where we get to that tipping point where the efficiencies and innovations we're hoping for begin to come real. Just a thought. No, thank you, Tom. And I appreciate you bringing me back here because I think I want to talk with you about that. And then one other point that I forgot to make here. What is the tipping point? And I think there is no consensus because no one has figured this out yet. But what we heard from Eric Schell from Stroudwater, who is a CPA and has worked with rural hospitals all over these countries, this is bread and butter, he thinks 80% minimum is what you need to do to really change the incentive structure. And I think that's why global budgets are so appealing or facility-focused population-based payments. There's a lot of ways to think about what that is. But basically, if most, almost 100, as many as you can get, payments that go to a hospital are fixed, are paid based on the population they expect to serve, then they can stop worrying about volume and start thinking about how do I keep these people healthy? If you're only at 40%, 50%, you can't rethink your strategy for delivering care. You still have to worry about how am I going to get that last 50%. So I think that's been where my brain's been going with this. I think the other point I wanted to make here is a good one. This is value-based care. We're not talking about fixed payments. We know that Medicare is a reconciled payment at the end. And I think that's one thing we've heard from hospitals does not work for them because they're still managing against that fee-for-service amount. And while that fixed payment gives them flexibility in the interim, they still have it in the back of their minds. So I think we have to be clear that not all of these value-based payments give you the same kind of incentives while it might be better than Category 1. We're not there yet. And so I think there's some conversations about how far do we think we need to go? Are we willing to go? I think we need to go all the way to Category 4. But how far is the state? Do we think we need to go? And I don't know that anyone has that right number, but I think there are a lot of evidence. And the evidence we do have points to the higher, the better. Thank you. Anyone else? I'll go back to the language. So oops, we can see. Okay. To Tom's point, I think you could potentially add sort of a recognition that Medicaid and the public payers have been a leader in this area. Yeah. And I think that's a good point. Great. So quality improvement and measurement. So while for the first time, we've kind of collated some quality data. This was part of the BRG analysis that was presented late last year. We learned that the data are not reported consistently across Vermont hospitals. They participate in different programs. And so you might not have reporting at all, or you might be reporting a little bit differently. And so there's no nor is there consensus across hospitals as to the most appropriate hospital quality measures and for whom we spoke with quality directors, care managers, hospital leadership on this topic. And I learned a lot, but I don't think we've not yet landed anywhere. And so I think this sparked work with our partners at VPQHC who are now convening a stakeholder group to work on establishing a quality framework that can be considered in the hospital budget process. And so we will have those voices, hopefully, back at the table to help us think about what the right way to think about quality is depending on what kind of hospital you are. And so the staff key finding here is really just to recognize this challenge and commitment to this work. So there are likely opportunities to improve the quality of care being delivered to Vermonters. For example, in some areas volumes may not be sufficient to guarantee high quality of care for some services. In addition, Vermont hospital's rate of potentially avoidable admissions is below optimal levels, suggesting better care for patients with common chronic conditions is warranted. So while this baseline data are helpful for highlighting general areas of opportunity, measures of hospital quality are not consistently reported and make systematic review of hospital quality difficult, if not impossible. So I think, you know, we're sharing the data that we did find, but I don't think there's any action that I'm recommending the board take by any means, except let's see where this hospital quality framework ends up and then continue discussing with our stakeholders about how we best incorporate quality into the hospital budget process. Any thoughts, comments there? Hello, my name is Tom Walsh. Just a comment in the quality measures that I've seen to date and outcome measures. There are some from an administrative standpoint, there are some from a financial standpoint, there are some from a clinical standpoint or medical, but we don't have routine collection of outcomes reported by patients about their perceived health, their ability to function and fulfill their roles. And that's where quality assessment is headed. So if we're thinking of building a system that would guide us in the future, thinking how we can incorporate patient reported outcomes would be important. Very good point. I can add some language about that. It's a very good point. Thank you. I like that idea a lot, Tom. I look forward to, you know, to hearing what VPQHC suggestions are. I know they're engaging in that stakeholder group and I imagine that's going to be a challenging conversation too, as you've noted, Elena, nobody can agree on the right set of measures. We're obviously going to need input from the medical community. I know VPQ will be facilitating that. I just want to add that Dr. Tapui and Dr. Macy at Cobley offered to engage the board on this topic, so I think we should definitely take them up on it. And I also want to note that it's so far to date been really hard to assess quality in small hospitals. You know, if you look at the Medicare hospital report cards, basically they don't report measures if the sample sizes are too low. You just get NA in those categories. And as we heard from our consultants, it's the low volume, you know, if there's a relationship between low volume and quality, which we know there to be, we need to really understand the quality in those hospitals. So we need a better process to assess our, you know, quality levels in those low volume areas or for low volume procedures or things like that. So I'm just going to throw out for discussion. I know we can talk about this next week and we get to hospital budgets. And I certainly know that this will be a part of a longer conversation that we'll have once we hear back from VPQ-HC. But I think we might consider collecting data, first of all, some easy to collect data on 30-day readmission rates, which we know Medicare collects anyway, reported for Medicare. But there was an interesting study that I saw that was trying to assess quality in rural hospitals. And so I was looking at how they were assessing quality in those rural hospitals. And they looked at mortality rates from AMIs, heart failure, strokes, GI hemorrhaging, hip fractures, and pneumonia. And they also looked at complication rates from elective surgeries. So I was thinking we could, you know, that seems like an interesting place to start potentially. And another area might be revision surgery rates for surgeries that happen either at the same hospital or another hospital. So we can get this data, I think, largely from the discharge database. The study that was actually that I read that I looked at was a part of a larger study from the healthcare cost and utilization project that pulled in state inpatient databases. Vermont was listed as a contributor to that. So this is data that might already be collected. And I would say that, you know, there's always the concern about small numbers. And I recognize that. So we could aggregate results over three to five years to increase sample size and reduce some of the influence of an outlier in a particular year. If we looked over three to five years, we could, you know, smooth out even the COVID effect looking back in time. So I'm just going to throw that out there. But I do think that from what we learned from the consultants, we do need to be assessing quality, particularly when it relates to volume. So we need to come up with some measures that relate to that. I could just respond to Jess's comment a little bit. I would like to agree that incorporating care cost and utilization project, H cup, that data set has been is rich. It's been used, data collected for, I think, more than a decade. And it seems like we could crosswalk that with our data set to get some of their utilization data and some of their cost estimates. They have not solved the cost definition issue either, but it'd be another window to look through. From a patient reported outcome measure standpoint, an organization where we may be able to learn more from the International Consortium of Health Outcome Measures icon is a good resource to help us all learn more about them, how they can be used, and how they can be implemented. I have just one small suggestion, which is I wonder if we just, because when I think about quality improvement in particular, it seems like it's not really a one and done. And I'm by no means a quality expert at all, but certainly in the areas where folks talk about quality, it seems like creating a culture of quality is really where a lot of providers want to go. So I just wonder about incorporating that concept of supporting a culture of quality in this finding. Yeah, I like that. Yeah, and we can bring this to our meetings with VPQ and get some discourse around it. That's very helpful. Any other thoughts? One more thing, sorry to be building off of what Robin just said. The group that's doing the most that I'm aware of about quality improvement and sustainment and change management, they're pulling in theories of performance and efficiency in high reliability organizations. Those organizations began in nuclear medicine and aviation, the theories behind how do you sustain quality improvement? How do you build a culture that drives quality improvement? So for us to learn some more about high reliability organizations might be helpful. Great. I need to notice that as well. Thank you. Okay, so I will keep going. So I'll pause again. Back to you. Are there, you know, if we've gone through these key findings, are there any other key findings based on, you know, conversations, analyses, some of our kind of thought leaders we've had in, you know, did we go through them all or are there gaps? So I would suggest that we include a key finding or two related to COVID. And I think that you wove that in with some of the findings. But I think it's important to acknowledge COVID's impacts and how it has been a disruptive force. And similar to the disclaimer in some of your comments earlier and just as comments earlier about some of the lessons learned, I think sort of incorporating that into an explicit finding is important both to acknowledge the current environment, but also to acknowledge that, you know, there will be additional lessons that we learned from COVID moving forward as the pandemic becomes endemic. And that will inform, further inform, you know, the work to date and the work as we move forward. Great. That's a great idea. Any other gaps, thoughts? This might be a small footnote, but in the Stroutwater presentation, he talked about the private sector growth and health care and talked about CVS and Amazon and Walmart, etc. And as we go through this COVID situation, you can see that these large corporate players are playing a bigger and bigger role at the local level. And I'm just, you know, I don't know how we get our arms around that, but if they're absorbing a significant share of some market, you know, it might, it's something that we might want to be aware of. I think that's a good point. Yeah, how do we measure when it's happening? Yeah, I don't know, but maybe Stroutwater does. Yeah, we can ask. Great. Thank you, Tom. Pellum, I should be more specific. Okay. I will move on. And of course, if you think of anything else, Robin, did you have something? I just had one. This is also in the footnote category, but in terms of the age of plant stuff, we either have or are expecting several large CON projects from some of the hospitals that have the older age of plants. So I would just note that because that number may move significantly depending on the outcome of those CONs and that kind of thing. Okay. No, that's, thank you. I will. I will definitely note that. Okay. Okay, so now, now we've talked about key findings. I think we all have a pretty good, you know, baseline for, for now, what's next? And so in the Act 159 report, this is the report that was given to us by the legislature to identify how we can improve hospital sustainability with all these other kind of key outcomes. You know, and so defining the work, we said, how can we ensure that hospital revenues are sufficient to cover the costs of operating a system that strikes the appropriate balance between efficiency and access in rural Vermont? How can a sustainable hospital reimbursement ensure equitable access, efficient economic delivery, and improved health outcomes for Vermonters? And so I kind of took a stab at aggregating across the key findings that we've been talking about in more detail to, to try to get to some, you know, instead of having a laundry list of little things we, we could tackle or we, we should all tackle, you know, what are the, what are the key big picture systemic issues? So left alone, hospital financial health is likely to deteriorate, potentially leading to hospital closure and healthcare affordability is likely to worsen for the commercial population. Vermont has numerous opportunities to redesign care in order to improve quality, efficiency, affordability, and access to care for Vermonters and completing the transition to value-based payment models will enable the healthcare system to improve quality and control healthcare spending growth and allow us to seriously address affordability while maintaining access to needed services. So I recognize some of the feedback we've already received. So this isn't aimed to kind of distill down to the fine points, but to, but, you know, I'll pause here just in case you see kind of the big picture differently. Okay, that helps. Great. So recommendation number one. So to establish a shared vision for the transformation of Vermont's healthcare delivery system to improve access, affordability, quality, and health equity. I did not put an actor here, but I think maybe I should recognize the many hands outside of the board that may need to be at the table for this work to be extra clear based on some feedback we've already heard today. So how, so I think this would require some appropriation for a contractor to lead state leaders, hospitals, and communities and advocates, you know, it's not an exhaustive list, in a process to assess the efficiency and quality of the current hospital delivery system and to lead efforts to design a system that optimizes access, quality, and costs in order to be sustainable in a value-based world. So I think to your point, Robin, earlier, you know, we are not a central planning board. We don't have, we don't have that here or in the US, I don't think anywhere. But what, what could a collaborative approach look like for establishing the shared vision? And, you know, might that be a way that we can all kind of work towards something to Jeff Thiemann's point in a positive way, build some positive momentum around delivering better care for Vermonters. So any thoughts, adjustments? Beth, Elena, I think the, I think in the second, second bullet, leading efforts, I think being more explicit about collaborative efforts, need collaborative efforts to design a system. And then the first bullet, assessing the efficiency and quality, I think the slides that you've shown have done that. So I might put a bullet below lead efforts and, and say, collaboratively build the tools to assess the efficiency and quality of the redesigned system. We've got assessments of what's been going on. It's not good. We don't need more assessment of that. Yeah. Yeah. And I think, I think the step, the step one here was, what is that shared vision? I agree that whatever it is that we build needs to self reflect and be a learning system. But I think we don't know, so I can incorporate that element, but I, and maybe evaluate is not the right word here, but, but what is that shared vision? How do we get there? Yeah. And there may be more data needed to say precisely what that looks like in some places. Elena, you talked about a contractor, and I think it's important to think about what skills we want that contractor, skills and experience we want that contractor to have. And I think, you know, we ideally we would like somebody that has experience leading large hospital systems, you know, there are consultants out there that have that experience, somebody ideally with a medical background. So they have the credibility and somebody from outside the state who doesn't have a vested interest in the status quo. So I think those are some components of who should be leading that process. And I don't know if that's helpful, but yeah, absolutely. Just make sure you don't whatever languages you land on, don't run into RFP problems, right? So legal need to take a look at it. Thank you, Robin. This is Susan. I just wrote that down. And I would actually recommend changing the word contractor to facilitator. Okay. Maybe I am just more of a pessimist having sat for years of the Sim Grant, where we had $45 million and multiple stakeholder groups to design a system. It's not that easy to do. So I think what we need to kind of acknowledge in this process is that you know, it's sort of designing a system kind of implies that there is like a blueprint or like a some systems design that then gets magically transformed, like the system magically becomes that way. Whereas to me, the way this process is more likely to be effective is that there's statewide information and data about areas where we don't have access. We have to all the stuff we've talked about, you know, where there's too much access, not enough access, the cost considerations, so that the people who make the decisions, which in my mind, when you're talking about the hospitals are the hospital boards of trustees, that they then have more than just their little piece of the pie that they know about. And so it could include bringing together multiple regions to get to the point that like anyone hospital is not going to have enough information or the ability to kind of think about the bigger picture, which they had indicated early in this process was the case. So I think it, you know, perhaps some sort of regional type thing. But the process to me has to really be community based, because like I just don't see practically as a practical matter how the change happens any other way than really engaging boards of trustees in hospitals and, you know, maybe throwing out this idea of more than one together, like different sort of hospital referral regions that make sense with and maybe an academic medical center, would it be engaged to do multiple because they serve a much wider referral region. But I think for it to be effective, like we did the process already where we had the usual suspects at the state level sit together and quite a few people who weren't the usual suspects quite frankly in the same process. There was a lot of good work that was done, but then the work was done and then it didn't get implemented. So to me, like engaging with the people who are making the decisions is kind of the key component if you want it to actually get implemented. So I do, I totally agree with the collaborative piece of it, but I think it also has to be clear that there's a, to me, I would advocate for a community focus. So statewide information data to provide the context that an individual community wouldn't happen have, but acknowledge that there's community decision making that's happening. And now there are pros and cons to that, that is going to be expensive and time consuming. Yeah, that's helpful. Any other thoughts here? Just have to say, I unfortunately agree with Robin, you know that, you know, in terms of my experience, I've never, I can't recall, I'm sitting here trying to recall one, but one of these consultant led, you know, efforts to, you know, in gender change just seemed to kind of have a life and then it goes away. And so somehow the decision making process has to be kind of more organically embedded in the population that is going to be changed or tried to be changed. But then again, you have concerns about vested interest in people, you know, kind of, you know, not being as aggressive as they might be.  It's going to make a bad joke about adding the hospital budget to town meeting day agendas, but I won't go there. Okay, any other thoughts here? I think this is all really good. I think what I'm hearing is that this is all well and good, but we need to think about how to engage the deciders and that change is hard and that that part isn't a guarantee just because we put up the money to do some kind of statewide analysis, so we need to be thoughtful about how to make sure that if we, if we, if the legislature goes that route, how does change then happen, I'm thinking through that. And maybe the thing to do here is to have like, you know, we could kind of brainstorm different sort of process options with pros and cons, like you could have a couple different examples, right? There may not be time given the report deadline of February 1st to do that, but you know, that's just a thought. Yeah, I think that's a good, good idea. And even if we can't do it immediately, it's something we can keep thinking about. Okay. All right, so I will move on to recommendation number two, which I think would support whatever comes out of recommendation number one, but explore moving hospitals to all-payer perspective population-based payments could be a global budget. And so I think there's, I'm using that term, but it can mean a lot of different things, different people. So, you know, a facility-focused budget in which the majority, which can be defined in a number of ways, revenues would be relatively fixed. So, but also flexible and sufficient to deliver high-quality affordable care to Vermonters equitably. And so how, so I think we would need to appropriate funding for a contractor, I think in this case, to assist with the design of a facility-focused all-payer population-based payment. And then it's incorporation into a proposal for a subsequent agreement if we wanted Medicare to also be at the table in that payments structure. So, thoughts on this? Do you agree with the approach and then how it's been framed or any adjustments? To me, I think, you know, I think there's a path that we started down and feel like has some promise is moving to the fixed payments for certain sectors of the healthcare system. And I think the challenge that we've run into is that in a multi-payer system, getting consistency across multiple payers is not an insignificant challenge. So, I do see this as a way to move that work forward. And while also recognizing that we have the hospital budget process, which is a facility-based process but has largely built on a fee-for-service chassis in the past. So, this to me is sort of a way of trying to think about how we can re-envision the hospital budget process in order to incorporate consistent fixed payments to that particular sector. But I do definitely agree we need more work. We did in the Act 159 report, we did include several different options under this payment model with some areas that we concluded we would need further study in order to actually implement it. So, I do think it's important to do this well and not like we need the resources to do it well in order for it to be effective and not harmful. So, I was going to hold this comment till the end. But since Robin brought it up, I think that I'll say it now in that in the report, there has to be a range of what the cost would be for each of these recommendations because this isn't something that can be funded out of the Green Mountain Care Board's budget. So, this would require appropriations from the legislature. And if you don't have that information for them, it's not going anywhere. Well, for this one we definitely have the range because we did that in the Act 159 report. Yep. I wonder if, and I agree with this recommendation, and I'm just wondering if there could be a parallel recommendation, which is regardless of whether we eventually end up at global budgets, which I know this would be a process to explore, but we are moving towards value-based payment in some form or another because the federal government is moving that way. I mean, all direction is pointing in that way. So, I'm wondering if we might want to ask for additional funding for hospitals to better prepare for that value-based world. I mean, effectively the value-based payment model is going to ask them to turn their business model upside down, and they've dipped their toes in the deep end a bit. But I'm wondering if there's a, we know that there's a lot of federal money coming into the state right now, and there's a lot of appropriating that's going to happen. Is this a good time to ask the legislature to fund some technical assistance to hospitals to better prepare for value-based payment and to, you know, think about how they could optimize their delivery system even in their own siloed world to be prepared for when they're going to be held accountable for costs and for quality. So, just wondering if we might want to ask for some additional funding for the hospitals to better prepare them. So, Jess, I'd like to follow that up. I planned on saying something similar later. The large organizations that I've been involved with previously that have undertaken efforts like this, whether Navy Medicine, Defense Health, the VA healthcare system, the training of the healthcare delivery system is crucial. And it involves disseminating the principles and practices of quality improvement, understanding value, what do we mean when we're saying value-based? The principles and practices of high reliability, just culture, there are a number of these things that those organizations, when they're trying to move, whether it's 14 hospitals, 20 hospitals, or 1700, there's a focus on providing the education resources along with the time for the people in the healthcare delivery system to do what's being asked of them, which is to change their business model. Thank you. Yep. I can add a bullet for that as well. And a price tag. Yeah, and I definitely agree that that transformation dollars are needed. And but I mean, there may be more in terms of the timing, there may actually be more flexibility on the timing there because if the federal money has to be used within a certain period of time and the hospitals are still engaged largely in COVID, they may not have capacity to actually start working on this yet. So that doesn't mean we shouldn't ask, but we certainly would need that kind of feedback from the hospitals having heard their limitations and give understandably, given what's going on with COVID. And also, I think we have to understand what the time limit is on the federal dollars. So I don't know, you know, when they have to be used by. So I think we have to learn a little bit more, but I think this is a good time to ask for money. It does seem like that. Okay. Elena, just again, this is a half-baked thought, but I'm just wondering if rather than looking at a whole 14 hospital process in a compacted period of time, whether or not say between now and the end of the all-payer model two that we roll this out by working with three or so hospitals during a time period, find ones that want to go in this direction and maybe getting some subsidies to do that and to support it, but to kind of build the process based on a smaller set of hospitals that, you know, like obviously UVM and the network is an animal of its own, but kind of working with the others to get them into a successful place. I mean, we're talking about, you know, pulling their bacon out of the fire of operating margins that are sinking them, you know, and working to make them successful and better facilities serving their people and trying to do all 14 at the same point in time might be too heavy a lift, whereas if we can divide it up over the next seven or eight years doing, you know, two or three hospitals a year, it might be a little bit of a more manageable lift. Just a thought. I guess I'm going to be a little bit negative on that, Tom, if you don't mind. I just worry that if we don't look, take a systems level look, really, because which three hospitals are you going to pick? And they're all interrelated and their services are interrelated. I think we have to look at the entire system together and really understand how they're integrated, how they could be better integrated, you know, how we could coordinate care better, how we could find efficiencies across the entire system. So I just worry a little bit about taking a siloed approach, even a larger than one hospital siloed approach. The worry is well taken. I'm just trying to, you know, find a path that is, you know, that we're not trying to swallow too much at one point in time, but I get your point. There's some ability to do both by creating the system-wide dashboard that Robin was talking about and keeping that picture of the system in mind as we start, as whoever's doing this starts rolling toward that. You use the big picture to guide the progressive efforts, right? So not every place is going to be able to run at the same speed at the same time once we have the data to guide us. So it makes sense to start and be progressive with it, I think. I think there's aspects of both. And I think also just to make sure, as a Vermont taxpayer that we're using our pennies wisely, if we're going to be designing something like this, I don't think we want to be going out to bid for a contract to design a different model every couple of years. Like I'm wondering if there's a design process and then the implementation, there might be options for piloted approach or some kind of staggered rollout. There's different ways we can think about how to chunk it out, but I think we want to make sure that we're designing something that recognizes the unique needs of communities, but I think we have to consider them at the same time. But that's open to hearing other thoughts. Okay. All right, lots of great feedback here. I will, if you have more feedback, feel free to say it later. And I think we'll, I mean, I'll get to the end, but we'll be opening this up for public comment. So there's time to weigh in on it. Number three, so this is about the quality framework. So establish a hospital quality framework that can be incorporated into the hospital budget review process. As I mentioned, we'll continue partnership with VPQHC and stakeholders and ensure that resulting hospital quality framework is ultimately incorporated into the hospital budget review process. And I have lots of notes from some of the recommendations you all shared earlier, which were wonderful. And so if you have other thoughts on what we might bring back to that group, feel free to share or other recommendations worth considering here. Okay. I just don't want to cut you off too soon, but I will keep moving. Are there other recommendations that I've not articulated that you feel are imperative for addressing the key findings we agreed upon earlier? I think my only additional recommendation would be to think about whether we should at least recommend that Medicaid reimbursements be adjusted for inflation. So, you know, I think if they're not, if they don't keep pace with inflation, it threatens the financial solvency of our hospitals, and it actually impedes their recruitment of workforce, which you know is a big issue. And it's placing a big burden on a, on a shrinking commercial population. It's not sustainable. It may fall on deaf ears as we've tried this before, but I think it would be important that we at least acknowledge that component of the sustainability issues. I would, I totally support that. And I, you know, I think it's, I mean, because we, we always want to be partners.  And so I would support that. I would probably word that on a per member per month basis. Because looking at the, I, you know, if you look at the information that they presented last week to the emergency, the emergency board, the diva that the caseloads are, they're projecting are actually dropping. But they're, and their per member per months are ranging between a half a percent and 3. something percent. But, but because of the caseload dropping, I would stick to per member per month so that you kind of neutralize the inflation increase, you know, be based on caseload. Great. It also might make sense. I have not followed, to be frank, the details of the Medicaid budget projections this year, but they diva did come to the prescription drug technical advisory group to speak to some of their budget pressures in relationship to that particular groups, recommendations that had dollars needed. So it, I would do a little homework here to see what the Medicaid budget projections are. And if there's a deficit or, you know, budget challenges that we recognize that in the finding so that it's not, you know, it's a little more holistic. Any other recommendations? I would fine tune that recommendation and that when you're talking about a blanket statement about keeping pace with inflation, we've tried that once before, it didn't work. But I think if you can equate it to terms that everybody understands with the reality that is happening now with the workforce and the incredible pressures that that's going to create on what I would call healthcare inflation in the next couple of years, it might be something that people would latch on to better. And I would hope that, and again, like Robin, I have not seen the diva budget, but I would hope that they're taking into account the fact that across all providers, there are going to be very large inflationary pressures that aren't normal. So we can work on fine tuning that. Great. Thank you. Okay. So next steps, kind of the internally focused thoughts, and I won't be exhaustive here because I feel like there are a lot of other Green Mountain Care Board staff who have a lot to contribute here that aren't up here with me today, but you will certainly speak with in the near future. But, you know, evolving our regulatory levers, I think Michael Barber did a great job going through where authorities lie, but hospital budget review would be a great place to start. And so I just kind of populated some ideas here. You know, for this year, would it be possible to report revenues according to some, you know, I know we started working on this on according to the land framework, include price and cost coverage and information, which I think we talked about earlier today, and NPR change in charge decisions, how would we do that? Track annual growth of commercial hospital prices on a per capita basis, and how much those prices are contributing to overall trend. And then, you know, maybe an out in the future, I don't think we need to understand what this would require on parts, you know, in terms of burden on hospitals, but how could we track fixed versus variable costs? There's a study happening right now to look at, you know, rural hospital fixed and variable costs is a really important indicator of financial health and sustainability. And then, you know, other work that we've been thinking about, you know, clinical view on incorporating health equity into the hospital budget process, we've been working with some residents who've been thinking about that who have some thoughts for us. So that might be out in the near future. But I wanted to pause here and get your f