 Good afternoon everyone, welcome to Green Mountain Care Board. The first item on the agenda is the Executive Director's Report, Susan Barrett. Thank you Mr. Chair. I wanted to announce first that we do not have a board meeting next week, it is Town Meeting Week and we are taking our board meeting time off. We encourage everyone to vote in their town meeting and also I'll also just remind any folks who are new to the meeting today and haven't been here before just as a reminder or maybe to some of the old folks to sign in up front there is a signing sheet up there and then last our March schedule is available and posted on our website and if you have any questions feel free to reach out to me or to Abigail. That's all I have to report. Super. Next item are the minutes of Wednesday February 19th. Is there a motion? Second. We moved and seconded to approve the minutes of Wednesday February 19th. A lot of the additions or corrections. Is there any discussion? Seeing none all those in favor signify by saying aye. Can you oppose? Okay at this point we're going to turn it over to Patrick and the hospital the health system finance team for discussion on fiscal year 19 year end. Thank you Mr. Chair. Good afternoon to all board members and members of the public as the board chair just said we are here to represent some of the summary points of financial activity for the 14 Vermont community hospitals for fiscal year 2019. Before we begin I just want to make a couple of notes to the board and the people in the audience around a few of the hospitals who reported or did not report for some of this data. So Springfield given some of the circumstances down there let us know that they were not going to be able to report on our timeline. So the information in here is not audited it is preliminary and it is unaudited. We've done our best to copy out that throughout the entire report so please keep that in mind. Second note is Broward Memorial Hospital submitted their narrative and leadership and board chair oaths on Monday and due to the tardiness of that we have not included it in this report. The deadline was January 31st for all hospitals that has put forth in the budget order effective 10-1-2019. And more importantly is North Country hospitals submitted their financial information and their oaths do not submit their narrative so we don't have any detail from their mouth of what occurred in 2019 and that's important because in budget order effective 10-1-2019 the board ordered that North Country will submit reports accurately and timely and we wanted to make a note that that was not fulfilled for this reporting for a fiscal year and 2019. So with that on note we will move forward. This is an overview of what we're going to discuss today. The first three bullet points on here are what this team will discuss. The appendices is supporting and further information. This slide here is a brief reminder of requirements expectations and amendments that occurred in fiscal year 2019 for all hospitals and committed by the work of the three you see on the screen. And at the very bottom is that copy out regarding Springfield's financial information that you will see throughout this report. Okay, so we've also updated this recently as of a few hours ago that North Eastern also had an amendment budget order and we will make sure that that is posted to our website. This is a summary assessment of hospital event by themes and drivers of revenue both up and down and main drivers of operating expenses throughout the hospitals in Vermont. A lot of these are common themes that are known to the people in this room or following the health care situation in Vermont and they are not unique to just 2019. For example the electronic health record puts the implementation of these projects. It's not only costly but we've seen delays on several levels within hospitals that is causing pressures on residents. That will move into our system profile. Here on slide six, this is the beginning of the profile, actual NPR FPP revenue fell short of system-wide budgeted revenues by 0.8 percent while actual operating expenses surpassed by 2.9 percent. Year to year actual growth of 2.9 percent in NPR FPP fell short of the target set by the Green Mountain Care Board of 3.2 percent while operating expenses grew year to year. Fiscal year 18 to 19 4.9 percent which equates to a 2 percent variance in revenue to operating expense growth. The overall results at the bottom of the screen indicate operating expense growth outpacing revenue causing reduction in operating margins system-wide. As a fiscal year in 2019 the system might operate margin was only 0.7 percent totaling 21.1 million dollars. With this in context of dollars actual NPR FPP generated by all 14 hospitals totaled 2.5 to 8, 9 billion dollars in what they walked away with collectively was 21.1 million on operations. The next few slides are going to go into further detail on this summer slide here. This is slide seven and it reinforces the revenue variances for dollars and percentage change perspectives as does this slide for operating expenses and the main focal point here is that UVM Medical Center really does drive those bottom line figures there with the budget to actual variance and actual to actual variance of both revenues and operating expenses for the system. Fiscal year 2019 is the third consecutive year that's system-wide NPR MPP growth target set forth in the budget guidance but the Green Mountain Care Board has not been met with the 2019 target being lower from prior years down to 3.2 percent so we're seeing a trend now where the total system is not able to reach the growth target set by the Green Mountain Care Board. So this next slide we're starting to expand a little the themes that we pulled out of the narrative with the hospitals were reporting to us so this slide here is talking about payer mix and revenues. Several of the hospitals reported to us that they are shifting from commercial to Medicare. We've done a system-wide analysis that's up on the screen right now that shows the three payers over a four-year period of time and this does partly demonstrate that trend but as with any system-wide analysis that we do it's heavily weighted towards some of the towards the largest institution in the system so when you break that down to an entity level there are about five hospitals that show decreases in their commercial increases in their Medicare and so for those hospitals that's that is a significant change for them. Another way of looking at changes in revenues payer mix and looking at gross revenues versus net revenues several of the hospitals reported to us that they had actually met their gross revenue target and even exceeded it by one point I think it says three percent I can't see from here one point three percent on a system-wide level meaning that they they hit their gross targets but they did not hit their MPR targets on a system as Patrick already went over we're at a minus point eight percent budget variance for MPR and so what that means is that what happens between gross and net those deductions grew for FY19 compared to budget and another way of looking at this is the chart below which is MPR, FPP is a percentage of gross revenues so basically what percentage of your growth of your gross revenues was actually made into MPR and it was pretty stable for about four years from FY15 to FY18 but we see a drop in FY19 it went from 47.3 percent to 46.1 percent which are relatively numbers but to put that into context that's about two hundred and thirty eight million dollars a change from FY18 to FY19 in that deductions category and just to remind you deductions are things like bad debt, free care, reserves, contractual allowances so that was a trend that we wanted to bring to your attention and we'll note with that that even though there has been consistency by mapping this out we are seeing this reduction and we are going to be looking further at this moving forward because if this does become a trend in the years ahead we're going to want to know why it's occur. Slide 11 puts into a dollar's perspective operating expenses outpacing operating revenues keeping in mind that operating revenues do consist of revenues that are not related directly to patient care this is where the 340b specialty pharmacy type revenues come into play however you can see that their growth is what's keeping trying to stop with the operating expenses. The impact on the margin is being influenced by this subsidization and some hospitals are making efforts to grow their other operating revenues to catch up with the fact that MPR is not quite getting to their budget goals. We'll talk more about this and slide ahead. Operating margin this gives you a dollar's perspective and highlights what we are seeing in our system as a fiscal year in 2019. We're seeing some consistency with the hospitals who are performing positively but the larger note here is the hospitals who are not posting positive gains. We're seeing consistency or growing losses on those operating margins and it shows that circumstances can shift year to year very rapidly and highlights the current fiscal financial state of our hospital system and this is the operating margin percentage as opposed to the dollar's perspective that you saw previous to this, the standard five-year average and from some hospitals that average continues to grow deeper and deeper in the red. Total margins it really begins to show the future of the hospital system as hospitals begin to have a lead from operating margins into total margins and what I mean by that is the operating margins are becoming deeper and deeper and the unreliable revenues being generated from non-operating funds is not enough to cover that operating loss. For example investments in reserves need to be mined to cover the shortfalls and as they do so they are reducing their balances and those reserves and investments are also at the whim of market forces and as those change we could see even deeper numbers on here should that occur. There's also matters like contributions that go into this and of course depending on who gives what and when there are several factors as to why that could rise or fall. So the operating margins are beginning to believe over the total margins that we're beginning to see more red on this screen if you want to highlight that for this leader 2019. So Patrick just spoke a little bit about the operating revenue and the part that it plays an operating margin and so we wanted to kind of give you a more detailed look of that other operating other operating revenue component. As operating margins continue to deteriorate and programs including the 340B program become less predictable a hospital's ability to rely on other operating revenue is also challenged. Several hospitals as we know we heard in our FY 20 budget this summer that several of the hospitals attribute the funds from the 340B program as being critical to the sustainability of the organizations and even when as far as they keep their doors open. So we as staff as when we look at that and we look at the other operating revenue and the reliance on this you want to keep an eye on this to sort of demonstrate the growth in other operating revenue. The chart below the purple is NPRPP and stacked on top of that is the green other operating revenue which is you know a small part of it but an increasing part of it. So you can see the orange line is the growth of other operating revenue as a percentage of total operating revenue. It's grown from 5.4% all the way up to 8.1% in this last fiscal year. And then the next chart shows an even bigger blow up of other operating revenue showing that same time period of 2014 to 2019 how other operating revenue has grown. It grew substantially between last year and this year increasing by more than 83% since 2014. And then sort of to remind everybody what goes into other operating revenue. We talk about the 340B program but there is a lot in there and the chart on the right shows the different categories over a three-year period. We didn't include the dollar value on these because it became a very messy chart but to see how those categories are growing and shrinking over time and as those programs or revenue sources become less reliable so too is there a liability on the ability to have a positive operating margin or at least meeting budgeted operating margins as a result of other operating revenue. So sort of transitioning from revenues from a revenue look to an expense look and flushing out some of these themes that are really hitting us over the head this year. Workforce and drugs are were cited by most hospitals as being the drivers of their operating expense budgets. And we really wanted to put in this report some reference to the cost of contract labor. Because of the way that adaptive the adaptive software is set up we cannot pull that information out of adaptive. The operating expense that's attributed to the contract staffing but we did have the rural health services task force report that we could reference and so you've seen this information before Robin was the chair of that task force. You've seen this information before but it takes into consideration 11 out of 15 hospitals 15 because Brattleboro retreat is included and it shows over the course of four years how the millions of dollars that are being spent on contract labor are assisted by nurses and for MDs and it's grown from 26.4 million in FY 15 to 52 million in FY 18. We knew that the FY 18 numbers were even a low estimate and our understanding is that this number will be much higher in FY 19. Several of the hospitals reported this to us in their narrative in a narrative form in a sentence not with a dollar value attached to it but we do know that that number is growing and then we also wanted to let you know what is a driver of performance in some of these hospitals and that would be the leadership turnover. We noted that in 2019 there was nine CEOs and CFO positions that changed. We counted four of them were CEOs and five were CFOs. In 2000 this is amazing because since 2017 the only one that has not changed is basically Southwestern. In basically year 2020 just recently we're seeing a possible three CEO changeover and six CFO changeover. Some of that includes of course Springfield's changeover their insurance and things like that. And then before we move away from this expensive slide just kind of a comment on the drug component. Again our adaptive software doesn't really give us a great way of pulling out the drug costs but we do hear from the hospitals that the main drivers of that are new drugs to market and for those hospitals that have an oncology department the cost of those cancer drugs is they're very expensive so those are coming up over and over again as the hospitals report to us. For the actual growth looking at the system the system is below the target that the remount care board established back in 2018 it was 2.9 percent. Excuse me it grew 2.9 percent but the growth target was 3.2 percent and nine of the hospitals did not reach that maximum growth. So this slide is prompt for beginning the enforcement discussion. This slide is a prompt for beginning the important discussion for this year should the board choose to take any action. It should also serve as a prompt for the MPRFPP targeted growth for fiscal year 2021. As we continue our work and the budget guidance for the coming year this reinforces the budget to actual MPRFPP results of each hospital for enforcement discussions which will begin at our meeting on March 18th 2020. So we've covered a lot of information here very quickly across the system and we want to pause for the board if they have any comments. Comments from the board? I have a quick question. I just want to go back to slide 16 with a specialty pharmacy seeing that there's a large growth in specialty pharmacy resources other operating revenue. We also of course a few and you just said there's increasing growth costs. I'm wondering is there a set to what the margin is on that? No and that specialty pharmacy category is UMM. They are the ones that use that category. So if you have further questions about that we would at least know who to ask. Great I just wanted to comment on the total margin is what we're going to do a lot about this so far but it's very worrisome but you know if you look back at 2017 we had one hospital in red on total margin. You go back this is on slide 14 right in 2018 we had three hospitals in the red on total margin and now we're at six hospitals in the red on total margin and four of them are under the climbing path so this this slide in particular stands out to me as one of the most trouble. I don't know if we're on. We're not even there yet. Okay thank you. If you can go back to the hospital system chart. You know the the part here that I really want to point out which is also you know is alarming with the where the total margin is going right which is sort of dollars of 21 million. But one of the things that I really look at is the you know the 18 to 19 actual growth the 2.9 for the NPR the 4.9 for the operating expenses and then looking at the budget to actual variance and for operating expenses it was three percent higher than that of minus 0.8 on the top warning and three percent is 75 million dollars right it's about 25 million dollars for each percent. Rough but maybe a little bit less than that because expenses are a little 27 million. And the point there is if you look at that 21 million dollars where we ended up in operating profit right 75 million has been taken away because of the higher expenses to budget and the two percent higher you know over a prior year. So it's very alarming where things are going. The biggest issue is the top line going down and the bottom line and the operating expenses going up which is you know something that really they're trying to address with each of the hospitals particularly as they miss their top line numbers and they can't adjust their expenses quickly enough and you know then to kind of skip ahead to the slide 19 where we really look at all of the hospitals 10 of the 14 hospitals that were missing their NPR numbers right some very significantly so the worry there is that that then carries into 2020 because many of them built their budgets off of you know their budget 2019 they built their 2020 you know so we really you know when we do talk about enforcement I worry more about the hospitals on the negative side than those that were up above and that was you know big contributor to more what's happening with the operating in the margin itself. Going back to going back to slide 10 you know this was another area where you know that decline of the 47.3 to 46.1 percent. I do want to just point out one thing just because of the sound bites I know he said it's like about there was $280 million more in deductions a large part of that is because there was higher top line and we get deductions of 50 percent of those right so you know that's going to be about 240 a million of that is just because we have a higher top line we only get 50 percent of that but about 1.2 percent change right there on gross net to gross right when and gross is like double net so it's it's like five billion you know is about a $50 million hit as well so I think it's you know and we know part of that is the bad debt and free care and part of that is going to be some higher reserves that were taken you know but those are to me the two biggest things hitting the bottom line right or the gross to net the deductions it's all of its payer mix clearly but it's the bad debt the free the deductions and then the higher expenses so I know we're going to go into hospital by hospital but I do think it is pretty dramatic you know what we've seen in the changes for bottom line and the other church page you know the other operating so page 16 just want to comment I love this chart as far as like you know around the right side really being able to drive into the other operating revenue pieces and I know we talked a little bit about you know other operating is revenues relatively small compared to total NPR and it would be great to be able to really dial into changes in NPR in a format like this on changes and expenses in a format like this because I think it really highlights you know the changes year over year and the other part of this piece you know I've been tagging on to what just was bringing up it would be also interesting if we could ever correlate the expenses that go with this because there you know there are expenses and when we look at wow we went up from 174 to 127 million so 50 million more in other operating revenue why doesn't that all drop to the bottom line you know at some point to correlate that maybe maybe questions for hospitals but you know overall I think you guys did a great job of summarizing all the changes that went on and I know we'll kind of dive deeper into each of the hospitals anyone else from the board so I'm looking at slide 10 and just a question on that little chart of the upper left hand corner looking at Medicaid Medicare and commercial do you have any insight as to whether or not for example the Medicare increase is being driven by demographics or changes in uh payer you know payer payments and similarly for the Medicaid folks is here a demographic element there or could some of this be cost shift that's our understanding is um that it was primarily driven from demographics but we did not do that analysis it's coming from the areas of the hospitals just another comment on that and then we talked I'm going to talk a little bit about this when we actually dive into the hospitals right we'll see some hospitals where that shift is more dramatic away from commercial and other hospitals where commercial and possibly at UBM right is higher is going up so not only you know it's not only is it as a system but with any hospital and that can have a huge impact on that growths to that when you assume you know that commercial is going to be about 70 80% growths to net and Medicaid is going to be about 30 or 35 and then Medicare about 45 so and we could be swinging 20 points for every every move so I think it's when we get into individual hospitals and the important to look at that a little bit so my next moral observation is on slide 12 and if you kind of just look at UBM the medical center and the system-wide tolls the system-wide tolls for operating margin over the five-year period is $229 million if you add those and the amount that accrues to UBM medical center is 295 million or 29.9 percent of all the operating margin flows in that direction and I you know I just think that you know as we look at hospitals some things are high individual hospitals but some things might be tied to more structural elements across the entire system and my sense is that lowering down on this these numbers is payor mites UBM medical center has a very good payor mites and a very low decade of percentage of population relative to the other hospitals and it might be important to understand that that now is a little bit more and Maureen's question answers one of mine thank you Maureen. I'm good. How many quick questions do you have? I just wanted to say thanks I feel like the he did a really good job this year killing the story and I really appreciate that. Chapter two of the story. Piece by piece. So this is a quick review of actual MPR and FPP dollars per hospital and system-wide the percentage of the system total that he possible contributes and their budget actually varies by hospital system in total noting again this is my MPR fell short budget by these 0.8 percent you see in the lower right hand corner the following starting with Rattle Girls so this is the format that you see for each hospital it is relatively high level but these are the problems areas we chose to focus on so it may lack some specific details but in order to through this process we are are limited in our capacity as far as prescription bills. So with that Rattle Girls Memorial Hospitals but the actual variants remain pretty close on both MPR and operating expenses from their budget for 19 to what they actually produced their FY 18 to FY 19 you can see the MPR grew about a little over 8 percent in year-to-year and operating expenses followed at about 4 percent. The result was a positive operating margin of $670,000 marking the first year of this of a rebound after three consecutive years of losses for the hospital. Up in the upper left hand corner is their budget to actual variants and their actual to actual change so you can see for a prior note that from quarter one to quarter four fiscal year 19 they remain right about on budget for what they were going to produce for MPR however actual to actual they came in at 11.8 percent in the first quarter and then kind of dip and stay relatively stable for the rest of the year but they still outproduced fiscal year 18. Their utilization was driven by acute admissions and physician office visits with some OR coming in below the prior year. The days cash on hand and page of plants there they're still in solid position with 157 days however those three consecutive years of losses have taken a bit of a toll on that but the average age of plant remains remain solid in about 12 years just over 12 years. So that is a preview of what you will see throughout here for the remaining 13 months. Next we have central Vermont their MPR fell short 1.6 percent budget to actual while operating expenses exceeded budget by almost 3 percent actual to actual growth they saw quite a rise in MPR and operating expenses throughout the year. The large drivers of their budget to actual variants of the negative 1.6 percent they said it is reimbursement payer mix which costs about 3.48 million dollars and bad debt and free care increases which impacted that number by a little over $1 million. They do cite contracted labor and drug costs or primary drivers of costs throughout the year which pushes that 2.9 percent figure you see there. Actual to actual although they exceed prior year 6.95 percent respectively the result in 2019 was third consecutive year operating losses at 4.6 million dollars and this was compounded in a total margin loss of about 8.8 million due to a negative impact of pension liability funding. So as you can see their budget to actual variants the blue line did come in under and and the the quarter is actually representative of the year in total with negative 1.6 the actual actual change they remain relatively constant through three quarters and then spiked at the very end. For their utilization we saw increases in OR and ER visits while acute admissions provider of the news and physician office visit especially. Dave's cash on hand they have course incurred losses over the last several years which is depleting those cash reserves but the average age of plant remains pretty solid in 12 years. Copley's NPR also fell short on falling negative 4.6 under the budget to actual and their operating expenses also came up short budget to actual. Utilization was reduced due to medical staffing matters that they cited. It's been no secret from budget hearings that the loss of orthopedic surgeon and slower than expected ramp up of new surgeries has caused that delay but it's really staffing already across the the rest of their perspective. They do cite the commercial medicare error shift and the cost drivers there is the contracted labor again the drug cost and with their specific situation unfavorable health insurance claims. This is the fourth consecutive year of losses the second consecutive year where losses have surpassed $2 million and that has had an adverse effect on their cash position which is now 62 days cash on hand. That puts them in a weakened employment state and that is concerning and they've been on the monitoring schedule for the last couple of years. Their budget actual variance as you can see fell under throughout the year and although actual actual began at 4.8 over settled into a pretty low increase from 0.7 up to 2.7 for the rest of the year and as you can see the utilization numbers are quite shocking at how those came down from fiscal year 18 fiscal year 19. Gifford Medical Center they did come in 10.5 under budget they constrained operating expenses which is a theme that they've discussed with us over the course of the year and that kept operating expenses 6.2 percent under budget. Actual actual growth they did see a little bit of an uptick in MPR but again the constraint of operating expenses has has kept that figure low. The result of that is although they did post a operating loss of 400,000 they made up to $5 million improvement in their bottom line which is promising. We do hope that can continue. Their strength is in their cash position at 237 days. The caveat to that though is that the average age of their physical plant is surpassing 18 years so in the near future they're going to have to make some renovations which will cause a should cause a reduction to those days cash on hand but that's their that's their cushion right now and with the operating improvements it's a promising outlook. Actual actual utilization they did have some reductions in OR and position office visits and the story with budget to actual and actual actual is pretty consistent throughout the year for Gifford Medical Center. Moving on to grace so grace is overall financial performance did not improve as they had expected for FY 19. They came in under budget minus 2.9 percent although they grew 3 percent over the previous year in terms of MPRPP. They had lower than budgeted utilization in their acute emissions which you'll see in the next slide on the utilization slide. Grace also identified Medicaid reimbursement as a factor of their below budget performance. They track their own Medicaid reimbursement ratio and report that it's declined from 34.6 percent to 34.1 percent meaning they're collecting less from Medicaid than they were last year. And grace is one of the many hospitals that sites contract staffing and salary and benefits as a cost driver to their operating expense budget. You can see below grace's operating margin now we did use a consistent format for all 14 hospitals but we know that grace's total margin is also a very important part of their financial look. They ended the year at a minus 0.3 percent total margin which was below their budgeted expectations so on all counts grace did not improve as they had expected to in FY 19. On the next chart it shows their excuse me before you go to the next one the numbers that you cited on the Medicaid what is it a percentage of it's the percentage the difference between their bill charges and the amount they collect from Medicaid. And that's their own analysis that is not our analysis. So on this next slide it shows the quarterly results they were off budget all year although they grew a little bit year over year in actual you can see the impact of that acute admissions minus 11 percent in their budget in their year over year acute admissions. Their days cash on hand is relatively stable and we would consider it to be relatively stable. Moving on to Mount Skutney. So Mount Skutney did not improve as they had expected to in FY 19 compared to budget. They came in slightly under budget minus 0.7 in the NPR basically no growth year over year in terms of NPR. They in their narrative they reported to us that they made an effort to support the Springfield patients were coming to Mount Skutney. They also reported they had challenges with ACO participation. They are one of the hospitals that are experiencing a paramount shift from commercial to Medicare and they also cite the pension plan that their pension plan obligations contributed to losses in their non operating income. So I will just say that this is something that we have staff have flagged as an issue that we want to track not just for Mount Skutney but for some of the hospitals that have these pension obligations. Let's see so they've had a decline in their operating margin for it's I'm sorry it's the first time they've had a negative operating margin since FY 15. We do consider and they consider their cash position to be stable which you'll see in the next slide and they do cite their affiliation with Dartmouth as a positive support for their financial and clinical initiatives. So on the next slide you can see that cash position has been steadily increasing since FY 16 and their utilization is up year over year however they were under budget by minus 0.7 percent. Moving on to North Country. As Patrick already stated our analysis here is pretty limited because North Country did not submit a narrative so and as of this morning we flagged some things and their adaptive entry that requires some follow-up so what you see before you is just just the data with very little analysis and interpretation of that data. They were under budget minus 1.1 percent their operating margin did have a recovery this year in FY 19 so they went from almost a negative two million dollar operating margin last year to a positive 1.6 million dollar operating margin. On the next slide you can see that their budget to actual variances, big variance in the first quarter pretty steady for the rest of the quarter. Their utilization is up in their emergency room but very much down in their physician office visits and you can see that their days cash on hand has been growing for the last four years and as soon as we get their narrative we'll make sure that you get that. Moving on to Northeastern. Northeastern experienced increases in utilization from acute patient days in their emergency room department which we know something that the board has been keeping a close eye on. They've gone up 3.7 percent in their emergency room visit zero over a year. They had an accounting adjustment that actually happened in FY 18 where they the reference lab revenue was reported as other operating revenue but they're flagging that for us it resulted in an amended budget order in FY 18 so our budget to budget analysis I'm sorry our act would be correct because it was incorporated into an amended budget order but they just wanted to point out that this was the first year that they were they had it for the full 12 months. They're another one of the hospitals that sites their cost drivers as contract staff bank salaries and benefits. We would consider that Northeastern perform performance was stable in FY 19 and that their cash position was stable and you can see by their operating margin that they've had a pretty consistent stable operating margin for the last five years. So I talk a lot about this slide so maybe we can just go into Northwestern and then Northwestern. So the most important thing to know about Northwestern this year is they implemented a new electronic health record system and it's step in the right direction but it had a significant impact on their revenues and the way that it hits their revenues is it hit their utilization so as we know when a hospital implements an electronic health record it can have a negative impact on utilization and it really comes down to can it can really come down to the doctor cannot see as many patients as they used to and this happened at Northwestern and it happened our our understanding is that it happened to a degree that they were not expecting. They estimated that the negative impact on utilization as a as a result of the electronic health record was two point six negative two point six million dollars in their in their NPR. Northwestern reported that they have challenges with ACO they had challenges with ACO participation they also experienced an increase in bad debt and another one of the hospitals that attributes their cost drivers to contract staffing and they had unfavorable health insurance claims with their own employees. So you can see from their operating margin that they have had significant operating losses in the last five years. Ten million dollars in FY 2015 and they finished this year with minus nine million dollars. So this is a hospital that's participating in bi-monthly monitoring and you can see on the next slide that their days cash on hand position is also diminishing going from a high of three seventy four in FY 15 down to two hundred fifty five days in FY 19. You can really see the electronic health record implementation which happened in the first part of Cal New Year 2019 so it's coming in around Q2 of the fiscal year. You can see how their budget performance changed from Q2 down to Q3 and Q4 how their budget variances grew during that time period. And you can see it in the realisation physician office visits down almost 15 percent year-over-year. Porter Medical Center. Porter stated in their narrative that they had challenges because they had an accounting change for one thing and payer reform investments. They had utilization was below budget but it increased from their previous year. They had their payer mix change from commercial to government figures and but what was favorable for them was they had a favorable ACO settlement for fiscal year 2018 and favorable settlements for Medicare for 18 and 19 but also this hospital was talking about cost drivers that included contract staffing. So those items may get that they have a budget to actual variance of 0.5 percent so they basically hit their budget and then also for their operating expenses 0.5 percent. Action to actual the NPR grew 5.7 percent and operating expenses grew 6.7 percent. This hospital has been improving greatly since 2015 where they had a negative 1.7 million operating margin and now they're 4.7 million. That these drivers of that operating margin is the ACO and Medicare settlements. The as you can tell by their budget variance budget to budget and actual actual growth they started out in negative and then they ended up in the positive. Their budget growth was 0.5 percent and actually actually 5.7 percent. This hospital also saw increases in their utilization actual actual definitely in acute admissions and operating procedures and a little bit in their emergency room. Porter has gained that in greatly I'd like to say that word. In their days cash on hand if you knew this hospital back in the 2013-14 they were struggling and now they're in 128 days cash on hand and their age of plant is about 13. Rutland Regional Medical Center they came in just about a budget for the NPR but they are 2.2 percent in their operating expenses. The actual actual growth was 1.2 percent NPR and 2.2 percent operating expenses. This hospital saw increases in bad debt and free care. They also were a hospital that changed had a parents change from commercial to government payers and they found challenges in participating in ACO. The cost drivers for Rutland in pharmaceutical cost was the new drugs in our oncology and also contract staff. Rutland is a hospital that saw improvements in the operating margin but it did not achieve their budget of what they expected. But they as we are noting they even noted in their narrative that they haven't met for three years in a row. What has helped this hospital is the other operating revenue 3-4 to be to help on the margins. They also have they mentioned in their narrative the gross revenue was over budget but they needed to increase their bad debt and reserves so that ends up wreaking a less NPR and that's what we've noted in other hospitals. Rutland's quarterly information for budget to actual and then actual a growth for the the the actuals were 1.2 percent by the end of the year and then as we noted before for their budget to actual was a negative 1.6 percent. The utilization was kind of mixed we didn't want to really seem to have higher emergency room visits but they also had higher operating room visits but all payer models want to see less acute emissions. The days cash on hand is stabilizing but it did go down for 2019 and their age of plant is about 14 years. Southwestern Medical Center this hospital again was basically on budget at minus 0.8 percent but not on operating expenses that's high 1 percent. Their actual to actual growth is 1.8 percent in NPR FPP and operating expenses 4.6 percent. This hospital participated in all three ACO payer programs but they had challenges in that participation. They invest in telemedicine in their ICU. They did see lower inpatient volumes if you want to see the real payer model. They are another one who had a pyramid shift from commercial to government payers and another hospital their cost drivers were contract staffing, salaries and benefits and drugs. This hospital also has oncology drugs. We think that southwestern is a stable hospital through fiscal year 19. They also said that contributing factors to their operating margin is the other operating revenue 340B grant income and other items. They are a hospital that has regularly had a positive operating margin for a number of years so as of this year it's 5.6 million dollars or 3.3 percent. This hospital's actual to actual change has started out positive and has continued to grow. They had a dip in the second and third quarter and then it leveled off the fourth quarter 1.8 percent. Budget to budget was a negative 3.9 percent in the first quarter and then the end of the year at a negative 0.8 percent. This hospital's main utilization was seems to be in position office visits because their QT emissions was a negative 0.5 percent. Emergency revenue was 3.1 percent and this is actual to actual variances not budget to budget. And this hospital has days cash on hand these seem like pretty low numbers but this is one of the hospitals that has a parent organization that also helps in the days cash on hand. For fiscal year 18 their parent with their parent organization it was almost 163 days for 19 was almost 165 days for the days cash on hand. This is also one of the hospitals with the highest age plant. They're at 18 or grace is 20 years. Springfield hospital this is the hospital that we've been monitoring for couple years. They declared bankruptcy last year and we are having little trouble sometimes getting their reporting. We do have their unaudited data that we're using for this information. We should be getting their adaptive data within the next week or so if all goes well. So for this report we're saying that they came in to budget to actual a negative 2.1 to 21.6 percent and operating expenses were negative 4.2 percent. Actual to actual also was down 10.5 percent for MPR and they're operating expenses as well with 6.1 percent down which is good. This hospital's days cash on hand is very very concerning. We're seeing almost 17 days that's only as a fiscal year at 19 and their age of plant is between 17 and 18 years. They also are part of um we're owned during this time period and still are at the moment owned by the FQHC. So their operating margins it's been a concern since 2014 where they were negative 3.7 million and now they're negative 9 million operating margins. UVM um this is the hospital that definitely as you've seen drives the system averages. So we are showing UVM at a budget to budget um actual to excuse me budget to actual variance of 0.9 percent for the MPR and 4.9 percent for the operating expenses. Actual actual growth MPR 2.5 percent operating expenses 6.6 percent. Their operating expenses they mentioned are mainly because of implementing and building the Miller building and then of course implementing advocate we're hearing from other hospitals who are doing these EHR projects. The revenues are not coming in as expected their expenses are higher than expected. Staffing even though we talk about travelers they also have contract staffing helping with IT that some don't take into consideration. This hospital had lower than anticipated ACO revenues also. They had change in outpatient Medicare payment rates and then in other operating revenue that 340B especially to pharmacy this is what helped their operating margins. When you saw that we showed the other operating margin for specialty pharmacy that was UVM. They also had higher utilization but it was offset by pay or reimbursement rates. So this hospital is even though they have positive operating margins it's been dropping through the last couple of years. They are now at a 31.4 million dollar operating margin for 2.2 percent. As we mentioned their utilization though for actual they had an increase in acute admissions. We also heard that at the budget time last year they had a surge that they mentioned. We also saw the inpatient excuse the emergency room visits increase provider work RVU and physician office could be reduced. The operating though decreased a little bit here and most likely you would see that even in their fiscal year 20 because of the Daniela campus. This hospital for their budget to actual variance started out at 2.3 percent and ended at a 0.9 percent over the quarters of this last year and actual actual they started out at 4.8 percent but then became 2.5 percent for the year in actual action. UVM days cash on hand was very healthy the last few years and then it started to take a dip because of the Miller building and Epic and probably reduced revenues caused by the reduction in the utilization. Their age of plant is at 2.3 years. So before we get to further board comments we do want to say that although this seems rather bleak the results don't come as a surprise and the reason they don't come as a surprise is that the hospitals have been submitting for quite some time now financial documents on a monthly basis to the Green Mountain Care Board which allows us to actively monitor their financial situation. This monitoring has continued into the current fiscal year 2020 and we are in possession of your first order fiscal year 2020 operating results and that monthly monitoring will continue in support of these fiscal year summer you've seen here today. Before you open it up to the board and then the public if you want to make any comments about the events or we don't have to go through them this is really a reference section but we will tell you what's in there. So we consider these the key financial indicators there's six cash days cash on hand operating margin total margin next slide days payable days receivable debt service coverage ratio that's showing the change from year to year with a key that shows an increase of the good thing like an increase in operating margin with a good thing and when it decreased it was a good thing like a decrease in days receivable is generally a good thing. These next few slides are the five year looks of the key categories MPR operating margin I'm sorry operating expenses and we include in those a CAGR which is the only place in this report where that five year CAGR exists and we have a repeat of the operating margin slides in the back and this is one thing that we do want to bring your attention to the case mix index. This was submitted to us by Vaz thank you Vaz and we put it in here as a reference for the fiscal year 2019 but also to point out to the board this will be the most updated information we have on case mix index as we move into the FY 21 budget cycle so so keep that in mind that this exists we have this the one thing that has to be updated is quarters numbers that's why they're in yellow are still being reconciled so those still need to be finalized and then lastly it is just a glossary for people who aren't familiar with some of the terms that we use today. Here we will open it up to comments or questions from the board. I have one quick one which is my recollection from when I read the areas on the issues with ACO participation was that it was related to Medicare's operational claimed processing issues that they had in early 2019 I just wanted to confirm that with you. Yes the reason why we put them as challenges with ACO participation is that there was so many different ways of describing the same issue and there were issues even beyond that so we would encourage the board to read the narratives to see what the specific circumstances were for each hospital but yes you're right Robin. Just an observation of how every hospital has its own personality just kind of checking in on a couple of them. I'm looking at Grace Cottage and the operating margins over recent years have not been not been rosy. In fact they've all been negative but when you go to Grace Cottage cash on hand that's remaining relatively flat and when I visited with Grace Cottage what they said was they had a very good separate board that just raised fundraising mostly from out-of-state speakers you know but it's just you know you know they they they have problems with their Medicaid payments and the payment rate but they make that up through a volunteer effort and my guess is that that's my PY you see the cash on hand a kind of holding set is that their fundraising effort I don't know that but I'm just guessing from from past discussions that might be what it is. That's true that they set for minimum use. And similarly for Southwestern Vermont one of the reasons that they're back so to speak is that they were down there in the corner of the state with Massachusetts and New York and as I recall the Medicaid payments that they received from Massachusetts and New York are higher than the procedure received that they have from Vermont in terms of per procedure per procedure rate and so I'm just wondering if that still is kind of a a truth for Southwestern that you know they have New York people and they have people from North Adams coming in and that helps them quite a bit. I'm just looking at their narrative to see if they call it out specifically which they don't. So if that's been the trend here in Rear then it's probably still the trend but they don't call it out specifically. Well I raise that just for comparison sake because I do think that payer mix and cost shift are substantial structural problems and here you have one hospital this might be you know in circumstances that aren't that they aren't as affected by that and you might and so what we're seeing in their in terms of their budget health is the fact that they have a large constituency of their patients coming from out of state that it's more of a hypothetical question than a statement of fact. Anyone else? If not then I will open it up to the public for any comments or questions and if you could arise statement name and title which would be whatever organization you might represent and then direct anything through the chair. Susan? Susan Arnott, her mom's developmental disabilities council senior planner and policy analyst and just a quick question I'm wondering if the narratives that were referred to are available on the website and if so where because I've just surfed around a little bit and wasn't able to find them. Until exactly where? So from the Dermont and Yassair posted from the Dermont and Care Board webpage on the left hand side there's a menu and you click on hospital budget review and then the way we've organized it is by fiscal year so you would click on fiscal year 2019 actual and everything is in there and more than just the narratives and as soon as we get North Country will post it. Anyone else? Yes. Mark Stanclas from the University of Dermont Health Network. For the University of Dermont Medical Center they were $65 million over budget from an expense perspective and I think it's very important to break down the line items under that $18 million came from what came from workforce challenges and what I'm getting at is I think you're going to start to see a repetitive story through much of the hospitals not all of it is the same but I really think we need to start to think about when we build our budgets and what sustainability means there's a conversation coming up we need to work look at workforce separately you need to look at pharmaceuticals separately there was a 22 million dollar unfavorable variance of pharmaceuticals much of that flows back through the revenue line for NPR not all of it some of that goes to other revenue too and then there was eight million dollars in supplies which goes back to taking care of the patients that we serve so 30 million dollars was directly related to the patients that we serve and one could argue that the 18 million dollars is directly on the workforce or the contract labor is directly related to the patients that we serve and in some of these there are correlation NPR dollar amounts that flow through because it's just a pass through a drug that you use to treat a patient that comes to your facility for treatment it comes from the expense side and it comes from the NPR side so as we think about how we break down these budgets a little bit more and how we think about what a reasonable growth is will to lead to what a sustainable margin is and a sustainable margin is is how do we make sure there's still 14 hospitals on that list in the future I think we're going to have to break down these conversations in a little bit more detail versus just taking a single NPR approach across um thank you big CEO Howard center I just have two clarification questions in the days of cash is that a point in time or is that a 12 month moving average and then for the financials that are being reported of those consolidated financials of the entire related corporations or is this the data only for the operating corporations thanks so the cash on hand is at a point in time and the operating figures you see up here are for the hospitals only quite want to say what the point is oh sorry this is your thank you any other questions or comments seeing none thank you all right uh serendipity health services researcher with a green mountain care board i'm here to uh review the first half of this presentation about the 2018 all-payer growth loss of care results and then Michelle will be talking about some proposed technical changes to our agreement with our federal partners that is a large fund so to be a little cavalier we're going to start with some conclusions and just say 2018 was the first year for the majority of the all-payer model we have the benefit of our partners at medicaid having a pilot year in 2017 but that was a very different network than participated in 2018 and as such comparisons therefore in the ICO and out of the ICO aren't particularly meaningful without some substantial adjustments to the data so we'll be working on that as some next steps to look at how we can get a more apples to apples look at the costs and utilization as they compare but in 2018 the aco controlled very little of the expenditures in our system so this is about the state of vermont's performance according to the agreement this is not an assessment of one care vermont so i just want to make that crystal clear in the schedule so i'm going to start with a potentially boring lecture about a data analysis and how our regulatory processes differ so whenever i think about starting an analysis in this realm there's two main lenses i try to think about is this really a resident look is it based on where people live and it doesn't matter where they get their care or is it a provider look and it's based on where the care is delivered so the all-care total cost of care is an example of a resident based analysis so what would people who live in vermont what's the average cost for medical care for that population so they might go anywhere else in the united states to get their care we're still on the hook so to say for that spending versus what you just heard about hospital budgets that's very much a provider analysis so no matter who shows up through the door be there vermont or not that's a very much a different population to look at denominators much easier resident look because we know where it is much trickier for a hospital because you know your denominator be who could potentially show up with appendicitis which is a very hard thing to guess so in 2017 which is our most recent expenditure analysis our resident spend for vermont it was six billion dollars and it was a little bit higher if you look at the provider spend six points these numbers are much higher than anything we're regulating but this is if you take the full picture of the pie including a lot of things that you might not traditionally think about is healthcare expenditures and that's why it's such a useful tool to try and look at that so we have two principal financial targets and again this is for the all-pair model agreement that's statewide federal agreement it involves ACOs but this is not an ACO thing this is a statewide target and we have the all-pair total cost of care and a medicare total cost of care we're just going to be talking about the all-pair total cost of care today we should be able to release results for the medicare total cost of care very soon but there was a bit of a pick up in our data for that so we'll get that out as soon as we can but for the they're both resident based analysis so it's vermont residents and for our all-pair target we're aiming that our growth between 2017 and 22 on average is 3.5 percent whereas for medicare we're aiming for that same time period that our observed growth is below national projections by 22 points so to contrast our regulatory functions here with the total cost of care we'll start with hospital budgets and for each of these there's two different ways they're different one is the populations involved and the other is what they're measuring so if you want to compare the all-pair total cost of care with our hospital budgets the all-pair is vermont residents and it's going to include money for the care delivered within the hsa or within the state and outside of the hsa where the person lives and then outside of the hsa including out of state even out of country at times so that is all that's included for our all-pair total cost of care non vermont residents are completely out of the picture we don't have their data so that that spending even though it's in our system i'm both the resident and provider side is not included in in the total cost of care that we're measuring today whereas from the hospital budget perspective it's people who are in vermont or out of vermont but show up at the door for that hospital so much different population that we're talking about and depending on the hospital it can be dramatically different and so what it's measuring how are those things different so the all-pair total cost of care is looking backward at actual expenditures for a fixed population and it's even just a subset of those medical expenditures we're talking about medical claims and the prospective payments through medicaid's all-inclusive population-based payments shared savings and losses as long as in some blueprint and sash payments so that's all that's included in total cost of care and to think about an analogy is if all vermont residents had to submit the invoices for their car repair to a database we'd just be looking at those repair costs and trying to figure out the average cost to maintain a car in this state so it's it's just looking at bills backward and trying to figure out on average what it costs to take care of a population whereas hospital budgets this is an estimate for future spending of an unknown population they can have some pretty good guesses based on the past but it's a much broader set of information so they not only have to think about the care that's being delivered but there's maintenance and equipment salaries and fringe they have to worry about care that doesn't get reimbursed there's taxes and drugs and supplies so a hospital budget would be more like the mechanic shop and what that they have to think about to keep their doors open so it's much more than what it costs to repair cars they've got staff to take care of they've got supplies to buy so it's a much better it's a much different look than this total cost of care thing now insurance review so again total cost of care just care in and out of an hsa for Vermont residents rate review that's the kind of untidiest of them all because it has the whole insurance industry works on where the business is located or where the policy is in place so sometimes you might not be a Vermont resident but work for a Vermont employer so your insurance is is goes through the insurance process here in our state so they theoretically might check all of these boxes and yeah we'll leave it at that so again I'll pay total cost of care just a subset of medical expenses looking backward that would be like taking a whole database of car repair receipts and trying to figure out what it what it costs to maintain a car for Vermonters whereas rate review again is trying to estimate the future and it's an unknown population they also have of more of a lag so they're looking two years ago basically for historical data and trying to trend that forward for the upcoming year and then the premium is going to cover more than just medical expenses on there's administrative costs they need to contribute to their reserve in case something bad happens so they can still foot the bill for anything they're at risk for and then they have plenty of assessments and fees of their own to the public so this is in our analogy like your insurance premium for your car so you know I don't I don't often think like about the connection between my insurance premium and what my mechanic charges because let's feel like really different things to me and I think that's kind of analogous in this situation here they're just different populations for different matters finally our ACO budgets and here again they're the most similar and that most of the people attributed to ACO or Vermont residents but at least the way our Medicare program works is that you don't need to live in the state to be attributed to a Vermont provider so there are in fact some non-vermont residents that are attributed to the ACO and the ACO is on the hook for all that spending but we don't have it in our total cost of care because as of today we don't have that data available and so again we're looking at the receipts looking backwards to try and figure out what the average cost was to take care of our Vermonters whereas an ACO budget again is forward-looking they're trying to estimate before these contracts are finalized what they think the targets are going to be for their populations and they also have you know some operational expenses and investments in our population health programs so again it's a broader set of financial information in a for future-looking direction instead of a backward-looking one so if we compare expenditures so here we have the 2017 expenditure analysis total again this is for Vermont residents there's that six billion dollars so of that six billion forty percent is included in what we call the total cost of care for purposes of the all-payer model and it's actually going to be a little bit less than that because odds are this will go up to 18 but it's the most recent data we have available so close enough though so about half basically is included in the all-payer total cost of care things that are notable exclusions include retail pharmacy anything that is delivered through a Medicaid program outside of diva including some home-based and community services we also have you know a ton of governmental activities you can kind of and we're working on ways we can help better represent these exclusions in the next expenditure analysis to help kind of frame some of that so of the total spend what we're on the hook for for the all-payer model is only about half of that total spending and in 2018 if you look at one pair of Vermont's actuals they only had 10 percent of that total spend and some of that is actually out of state residents so even less than 10 percent of their spend is controlling anything to do with this so that's why i just want to be really clear this is a statewide analysis for our all-payer model agreement so uh here we're again going to talk just about the all-payer total cost of care performance in 2018 so if we look at what the per percent total cost of care was in 2017 as compared to 18 our growth rate was 4.1 percent now that exceeds the target of 3.5 percent here consider on track as long as it's below 4.3 percent so higher than we'd like but not a trigger that we that is of concern at this point and again there are no annual targets in the agreement we just have to check in to make sure whether or not we're on track each year so um we won't know what the fat lady has to say until 2023 so if we look at that the actual per member per month cost went from 501 to 521 dollars and if we look at that by pay or type of medicare grew statewide at 4.4 percent commercial at 1.5 percent and we'll break down some of these numbers in subsequent slides um but uh Medicaid is the one that grew the most at 6.5 percent um but you'll notice that even though it's the highest growth it's the lowest dollars so that means it has kind of less leverage on that um and if you want to look at the Medicaid growth uh within and outside the ACO you can see that on a per member per month basis the ACO um per member per month actually went down from 17 to 18 and grew quite a bit more outside the ACO um not any conclusions to draw at this point that's probably largely explained by attribution algorithms and population more than anything else and that's part of why we know more detailed apples-to-apples comparison is warranted so but we do want to flag um these numbers all are post the quote unquote will harm the president of the agreement which um deducts allowable price increases from Medicaid so this is these are the official numbers we're on the hook for for the purposes of the all-care model agreement uh so just to break that down um so on the left hand side here we have um proportion of the total cost of care by pay or type and on the right hand side we have the proportion of the total cost of care membership so Medicare while they make up 45 percent of this um 2.9 billion thank you i'm really bad at math in my head that total spend it's only 27 percent of the population so again this is a lot more influenced by the dollars than the number of people so because they're more expensive they have more leverage on influencing it commercial is more flat one to one 40 percent of the spending and 44 percent of the market and Medicaid makes up about 30 percent of the population for primary insurance coverage in the total cost of care but only 15 percent of the total cost of care so we're going to just break out some of these uh air types into some chunks so uh accountability for the uh Medicare breaks down into two populations and stay green on disease again these are folks who are eligible because um they are dealing with some significant kidney problems um and they uh are more expensive even though there's not very many of them so they did not show much growth and the growth target tends to follow the non ESRB just because there's so many more of them just must be dizzy um and then uh if you compare so uh the total Medicare PMKM was 878 um for those attributed to the ACO it's 961 dollars these numbers might look different than what you're used to looking at because these are loud amounts um so again that's the paid by Medicare plus the members responsibility we find uh we we think it's really important that we include the member responsibility because we wouldn't want to you know um be able to meet a target by shipping costs onto members basically so um I wouldn't be surprised that um those who are attributed would have a higher total cost of care because in here we have people that never see the doctor or those who just have part A or part B premiums so they tend to be a less expensive population for Medicare um so for our commercial market so the real story here is our Medicare Advantage business which is increasing um actually showed a substantial decline at 8 percent uh between 17 and 18 now I think that part of this and I'm investigating right now might have to do with a coding issue where one of our submitters was using the wrong product code for their Medicare Advantage business so we're trying to sort that out to get that right um but nevertheless that 1.5 percent commercial growth rate which I found surprising is largely thanks to this Medicare Advantage um change in the claims and I think that's also explaining maybe why we're seeing a decline in our fully insured population as well um so uh once we get that right we can always update these numbers um and then our self-funded business and again this is limited to the data we have available in V-Cures which is a substantial subset particularly of our self-insured business in the state it's um either those municipal plans that don't have a choice about spending data or those voluntary submitters to which we are very grateful um and so here we actually see that um again that the PMPM is higher for the ACO-attributed population um however that's only true for the fully insured population uh the self-funded was a little bit lower but that's really just um reflecting the risk pool for that self-infunded player I wouldn't read too much into that another reason why this um these adjustments are so important to be apples to apples there's a new question yeah my question that coding error that you mentioned your possible coding error is that going to affect the data of 7.7 you know it would just bring this number down and this one up yeah it would all come out in the wash but yeah yeah yeah thank you yep um and yeah uh so then uh medicaid uh so uh here are the unadjusted PMPMs for the ACO and the non-ACO populations so here you see a decline of 1.5 percent for those attributed to the ACO across years and an 11.5 growth for those not for blended 8.9 percent growth rate once you make the adjustments for the permissible price increases that's where you get the numbers you see below so we're um you know actively working with our colleagues at medicaid to try and help unpack what can explain some of this we know that it's certainly part of it is utilization and potentially the intensity of utilization but we um want to be careful before drawing too many conclusions because you don't want to be fair and make sure accurately representing this stuff but again even though it was high growth because it's relatively less dollars it's having less of an influence on our our all-payer target and we're only on the hook for that all-payer target in this analysis so it's good to know what's happening underneath the hood but yeah there's still a lot of work to do so just for a minute to to go back to our conclusions i mean i wanted to say for this slide basically you know hashtag too soon you know like we have just one base here under our belts for this all-payer thing um there's a lot of comparisons we still need to look at um and we will be as next steps really unpacking particularly the utilization piece and plan to produce a interactive dashboard on the website that will help expose that to interested parties and you'll be able to download that information for yourself and again these are statewide all-payer bottle results so this should not be conflated with RAC at all. Any questions before we turn to the technical changes portion of the presentation? I don't have more of a comment to the question but in thinking about the target versus the 4.3 both of those numbers were calculated based on historical economic growth so in my thinking about it is since we know that health care spending historically has grown faster than state economic growth whether we're talking 3.5 or 4.3 i still feel like 4.1 is a pretty good result because that means we have at least for one year which is not a trend so who knows uh managed to get within uh state economic growth historically and i do my recollection from that calculation and Tom i think actually did these more recently so he may have a clearer recollection uh was that the 3.5 included some of the the recession whereas the 4.3 was really predated the recession so might be a more a better number in some ways just but i think it's always good to strive um you know to give ourselves a challenge that was just my thinking on that for what it's worth i just want to comment on the 1.5 percent commercial um which doesn't really jive with what we know is increasing the commercial year over year and do we think that that attributes really to what's not counted in the total cost of care you know pharmacy things like that that may be growing at a higher rate because you know the 1.5 is clearly helping us on the 4.1 number that we got it total right and if that had been you know a 3.5 or something like that you know we would be well over the 4.3 percent so i'm just a little curious as to how good we feel how 0.5 percent increase in commercial yeah so retail pharmacy's exclusion is definitely a big deal um yeah and again like when we think about how premiums change that's a much different um calculation than the way that this this real subset of medical expenses are changing but i think the biggest driver really is our increasing market penetration for Medicare Advantage and that a healthier population seems to be selecting those plans so because we're coding Medicare Advantage to commercial um which is you know in black and white the agreement not really up to us um i think that's really the story there 3.5 percent is less crazy which was the fully insured trend yeah yeah but if i remember we could actually pull out from the filings um what the medical trend was again it's still not apples to apples but i think we were seeing 2.6 on the medical trend for QHPs not that would be what i would consider most analogous to yeah i just want to say a hashtag thank you especially particularly appreciated at the beginning slides where you try to break down the populations in each of our regulatory processes and you know resident non-resident all the fantastic thank you it's always hard to follow sarah and i always get paired with her so i have the push out degree help policy advisor for the board i have the pleasure of walking you through some technical changes to the all-care model agreement um that are currently out for your review so uh in carrying out our responsibilities under the agreement the GMCB staff and CMMI identified the need uh to amend the agreement uh these amendments that are being contemplated are technical in nature and are intended to do four things so first is to define a process by which the GMCB could submit one or more proposals to modify the Medicare ACO initiative we currently already have that ability in the agreement it's just allowing for more than one uh address data sharing between CMS and the GMCB for health oversight activities um sarah sort of talked about that before with our access to Medicare data address excuse me uh improves the accuracy of financial and quality performance reports by revising reporting deadlines to allow for more complete data and it allows us to update certain quality reference points to better reflect actual performance for existing measures um so this slide here i just want to start by reminding folks that we began this conversation specifically on the quality framework uh back in july after our federal partners came for a visit and i presented some of this information to the board um at a pretty high level at that point in time but now that we've had the opportunity to work with our federal partners we're going to do a little bit of a deeper dive today into what really the result of those technical changes looks like um it's important to note too here much like sarah said these changes are not to the measures themselves but to the performance year five targets and in some cases the associated baselines and also to note that we're talking about those measures here for which the state is accountable under the all payer model agreement we're not talking about ACO responsibility we're talking specifically about those measures that the state is accountable for while some of them are ACO specific that is separate and apart from the ACO's agreements with the payers um so i'll also note um that you know in some of these discussions we have communicated with cms cmi and have sort of a preliminary agreement and it would make a good amount of sense to update the base years in the agreement to reflect data that's relevant to the model's performance now that we're starting to produce reports um at the time agreement was signed in 2016 the base year reflected the most recent data available and in some cases that was back to 2013 or 2014 so using those reference points now producing data for 2018 seems a little silly um but so we're going to propose to update those um to 2017 as a base where applicable or available and in cases where the measurement is specific to those aco attributed lives we would propose updating and utilizing 2018 as the base year so year one performance and 2018 would be the same and the reason for this is that that's the first year of the next generation multi payer aco initiative so for models where we're measuring multi payer aco performance it doesn't make sense to use a reference population that was not in fact multi payer aco attributed lives um and one final note before i move on these technical changes are currently under review with cms's office of the general council um and all proposed languages subject to change based on any comment that they might have i move it of course bring that back to you so here's the fun part uh for suggested technical changes so on the previous leg it's had noted that we broke these down really into categories so one of the big things is the heaters measures which are claims based measures that are referenced in the agreement um the heaters benchmarks would have required the state to purchase a tool called quality compass which is a product from ncqa and that provides payer specific benchmarks as we started to gather some data and sort of investigate it was realized that the data for from quality compass are both proprietary so once we received it we couldn't publicly report it and incredibly cost prohibitive it would have cost the state about a million dollars for the duration of the agreement to purchase that benchmarking tool um and then again we wouldn't be able to actually publicly report out where the benchmarks fell because that data is proprietary um so the goal of these five measures so i know it looks like four but initiation and engagement are two right there uh are two separate ones so we wanted to remove of course as i just said the percentile references that were currently in the agreement language um to update it to utilize um sort of follow along some of the other metrics and really just set a hard target for lack of a better term for performance year five so we did work um with contractors and payers to sort of talk about some of the rates that were proposing here as our targets again for performance year five of the model um for the last measure you'll know there's a another little fun fact there which is um the medication management measure itself there's actually two ways to calculate that and it was not set out in the agreement which performance metric to use so it's utilizing the same measure but there's a 50 percent compliance and a 75 percent compliance rate um this just codifies the decision to use the 50 percent compliance rate as our rate moving forward and the second thing is uh specific to measures that reference the Medicare share savings program um so for the measures listed here which are all referencing MLRP target um CMMI actually noted that there is in fact no 75th percentile produced which is what the agreement refers to um which is why you'll see it's been updated to reflect a decile range that is how CMS produces and reports and measures against their targets and so that's that was kind of a choice that was made to uh get at that 75th so for the first measure here um it's Medicare specific it's going to remain the same again with the exception of proposing to update those percentile ranges the second measure the chronic conditions target uh CMS and the Medicare share savings program actually disaggregated this measure so we would follow suit um we wouldn't want to report a composite measure that's no longer comparable to national um performance so we would also suggest disaggregating the measure and produce three separate rates and three separate performance targets um for these measures so it bring the total number of reported measures in the quality framework to 22 as opposed to 20 as it was before the last two measures the tobacco use assessment and the screening for clinical depression both of these measures require both claims and clinical or chart review data and because of this clinical aspect these measures can actually only be aggregated weighted and then reported for those payer programs who contract with the ACO to collect and report this measure so we are able to receive numerator and denominator data from the ACO and their performance on these measures it's reported through their budget review we receive that um and then I'm able to weight the performance based on that submission and the uh proportion of the population um and again here we would need to update the performance range to indicate the 70th to the 80th percentile because there is no 75th so one of the final technical changes so there's two um reporting timeline technical changes that we are proposing so um as you see here the first quality report was initially due on September 30th of the year following each performance year so in other words the 2018 report would have been due on September 30th of 2019 this timeline doesn't work for several reasons the first being that some of the measures rely on survey data that are collected through the behavioral risk factors surveillance system these results are produced by our partners at VDH and are actually not available until late fall of the year following survey implementation so we wouldn't be able to report them in our federal reporting um additionally utilizing six months of run out for the claims measurement allows for more accurate performance calculations and it's something that um through the board we're trying to utilize as sort of best practice for all of our uh reporting metrics that utilize things like that so the proposal here is to extend that deadline to December 31st of the year following each performance year so the 20 2019 report will then be due December 31st of 2020 and I have a slide that tries to make this a little easier the next technical change that we're suggesting um is for the total hospital care reporting so currently there's a September 30th deadline and again doesn't really allow us any adequate claims run out so the proposal here um is to extend to December 31st this change aligns with the reporting deadline um for the quality framework that I just discussed and it allows for adequate claims run out and um given um that we would like to use six months the state also proposes here to produce a fifth final annual report um and that's what sarah presented on today so that's the total hospital care data that you saw today that included six months of run out um and so this is just sort of codifying that decision to add an additional report and have that complete by December 31st of the year following each performance year of the model there's one I know uh so here's just a timeline to try and wash it out um so this is just looking at 2020 and how the impact of the changes would be seen through the rest of this performance year so you see state-wide health outcomes down here in December um total cost cares are on there we're going to go right there you I missed one um and that's just you know to sort of give a breakdown of where all of our reports fall throughout the performance years um these are again technical changes they are on our website and they'll be open for public comment uh through we're looking at March 10th at this point um with a potential forward vote on these proposed changes um the 11th by the questions and comments from the board before we show them if not I'm going to open it up to the public for comments or questions again stand up say your name your title and organization and address it through the year uh student error on the month of the council senior fanarm policy analyst and a similar question one from before um is there some written version of the proposed measure changes other than what exists in these slides yes there is a waterworks version of the agreement that um outlines all of the changes and it's on our website under the all-pair model tab and it's like one of the first things on there I'm looking at Abigail to make sure I'm correct it's actually on the public comment tab if you go to the public comment right on our landing page and you click on that you'll see ongoing special comment periods and then it lists this one February 26th through March 10th on the proposed technical changes to the all-pair model and there are links within that to any of the documents related to the technical changes thank you thank you thank you other public comment so you know I want to thank you both okay so um I'm Aliyah Berge director of these programs these new regulations and I'm Patrick Burney director of health systems finance and before we start we just wanted to provide some background on how we arrived here today so I've you've probably seen this slide a number of times especially throughout the services task force presentations but as you know since 2005 166 hospitals are closed nationally and 25 percent of rural hospitals are predicted to be at mid to high risk of financial distress so that was apparent you know if not in our budget cycle hospital budget cycle this earlier this afternoon with our 19 actuals you can kind of see that here in Vermont so that risk that has been growing so this kind of reflects some of that that you've seen this morning highlighted on the last oh I'm sorry Patrick so by now this slide looks familiar to everyone here in the audience with the growing number of hospitals falling into the red sustainability is creeping on at the scene is the topic for consideration there's a growing number of literature out there on this topic which means that Vermont is not alone when beginning to look at this type of theory for how do we make our hospitals more sustainable and up here on the left side in the yellow you have these six hospitals that are currently ordered to participate in the sustainability plan in the coming year so this conversation is not new I started earlier this our last year we had a panel discussion that highlighted a number of things we brought in an expert also from Stroudwater to participate in this panel and some of the outcomes we're talking about these national pressures but you know kind of reassured us that we were on the right track with our all-hand model in terms of what could be done at this point to address these issues and to help stabilize revenue and focusing on population health and preventative care which is really critical to kind of getting our arms around this however you know our hospitals are still experiencing the defeat in two canoes if you will with their existing financial and economic headwinds you know we talked about earlier today and I'll be here commentary because welcome again on pharmaceuticals and workforce and supply costs has been these really important drivers of these trends in addition at the same time we're asking our hospitals to engage in health care reform and move towards value-based models where they have more predictable payments but also doesn't create that dollar-for-dollar that you'll see in NPR as you heard earlier today this in conjunction you know with Act 20, Act 26 the legislature kind of acknowledged their their commitment to this issue and the World Health Task Force commented on a number of presentations or recommendations including those about hospital closures they focused on workforce, telemedicine, care coordination made actionable recommendations to the General Assembly on these areas that are being pursued so the first three of these you know work are in line with the Bipartisan Policy Center recommendations are represented in the Rural Health Services Task Force recommendations but number four which I will read to allow rural communities to adjust their own health care services to better fit the community's needs including changes to critical access hospitals small rural clinics and rural hospitals is really about right sizing and finding what the right services are for our communities to provide so that's what the sustainability plan hopes to address and kind of rounding out an approach to ensure that our rural health model is a sustainable one so as you know the new memorializes concern in the hospital budget process this past summer with the requirement for six in the 14 hospitals to submit sustainability plans and to reiterate the goals for today the staff we're going to provide an update on the sustainability framework and hope to have more discussion and feedback on that framework and then outline some next steps so the goals of the sustainability plans so we worked you know with a number of parties and discussed with our hospitals and and landed on these goals for these plans so to engage a robust conversation and community access to essential services and barriers to sustainability of our rural health care system to ensure that hospital leadership boards and communities are working together to address sustainability challenges and formalizing their approach in their strategic plans over time to identify hospital-led strategies for sustainability including efforts to right size hospital operations particularly in the face of Vermont's demographic challenges and payment reform efforts and to identify barriers to sustainability that are more actively addressed by other stakeholders policy makers or regulatory bodies and insights gained through this hospital sustainability plans may be leveraged as the state begins to think about the subsequent proposal to our all payer model so it's important to note that you know we recognize the community-centered focus of this model and that it should be community driven and the intent is not to dictate which hospitals will perform which services but rather to make sure as was said before that the board has all the tools at its disposal to ensure that we don't have another spring field so that we can identify when there might be a risk of another spring field and and feel like we have the tools to problem solve this as a state together so we just also wanted to highlight the many multitudes of resources that went into this framework and informed what what it now looks like so for the financial benchmarks the S&P global ratings was kind of the key resource there I won't read through all of these but you know compare your pricing across hospital methodologies addressing healthcare needs in rural communities there are frameworks and research out there that speaks to all these things we are not reinventing the wheel there are other states and other communities that are leveraging these services to try to answer these really challenging problems in addition what you'll hear more about later the volume quality relationship there is a substantial amount of research that that supports this notion and actually some countries will not reimburse or will reimburse only over a certain threshold so I think there's a lot of research and practice that suggests that this might be a warranted approach we also thank Vaz and hospitals for their input and continue to seek input on what is feasible and actionable and will really further this conversation the framework has three main components so first is the discussion of the hospitals financial health the second is about ensuring provision of essential services and the third is about discussing the sustainability of other services so this is the financial profile that we mocked up from the S&P global ratings and rankings scale and it runs from extremely strong probably vulnerable and the ranges within also come from S&P for standalone hospitals throughout their area of covers that they have and this is an actual Vermont hospital we're not going to call out who it is but it serves as an example and the idea here is to show where they currently stand but also either progressive or regressive activity in these areas so you can see up here from under financial performance from total operating revenue down to deserts this particular hospital is it has had no movement over fiscal year 18 or 19 within those metrics the blue represents fiscal year 19 where their actual numbers fall and the gray serves to recognize fiscal year 18 where their actual numbers fall so we took their actual numbers for each one of these categories and plugged them into this scale so for this hospital as I stated there was no movement everything stays within this highly highly vulnerable um end of the spectrum here and if you go down here into the liquidity and financial flexibility we have regression in or sorry we have progression of age of plant where the age of plant actually got younger their capex depreciation expense receded as did their days cash on hand for extremely strong for strong and the idea here is um if if the hospital is is kind of camped out down here with sustainability plan how can we move them or help help move them up the scale by report having a report back on their sustainability so these are an example of some of the metrics that we'll use to show where those hospitals currently stand and to monitor movement with respect to these metrics either up or down and here is as I alluded to the steps that they'll be asked to respond to regarding the profile action steps on how to bring underperforming metrics into the attitude zone the time needed to achieve those sometimes it takes time to turn these around to some of the initiatives that they would be putting in place and to report back on the obstacles to moving up the spectrum there towards the adequate zones where they would be financially more sustainable great so the second section is about ensuring the provision of essential services so the main question that we'd like to be able to answer here is as Medicare moves away for fee for service in the state against developing our proposal for 2.0 welfare model 2.0 how can the hospitals capitalize on predictable payment streams and maintain access for their community to a baseline of high quality safe and effective services so two main components here to think about are access to essential services in an effort to achieve population health goals cost efficiency so with fixed revenues cost to county a service line becomes critical to understanding hospital efficiency and sustainability kind of meet those you know capitated payments with the costs that are currently serving as inputs you know how can we make sure we keep the doors open the definition for essential services that we leveraged is from the American Hospital Association's Task Force on ensuring access and vulnerable communities and identifies a number of categories of services that should be considered essential to a community there's primary care prenatal home care dentistry psychiatric and substance abuse services emergency and observation services diagnostic services transportation and robust referral system and transfer agreements for specialty services that may not be provided locally this is just a visual of what it might look like to a hospital to to submit this information so you have a series of services at a granular level on the left and then these metrics on the right which we will talk to you in more detail in the subsequent slides so you know hospitals will okay hospitals will be asked to respond to the following as it relates to essential services the first is our community needs for a service met partially met or fully met then they'll be asked which entities deliver these services is that delivered by the hospital fphd the designated agency etc and then we'll ask a series of questions about financial metrics by the hospital at that service level so contribution margin or total margin not looking for a dollar amount but rather is it positive or negative just in a very high level and then commercial to Medicare reimbursement ratio Medicaid to Medicare reimbursement ratio pay or mix and percent contribution to NPR we would look for an estimated amount nothing's has to be precise we're not tying anything out we just want to understand generally how these services kind of tell tell the story are you know is the delivery of your service financially viable are you charging a reasonable rate as we move away from this week for service you know is this service line contributing to your sustainability or not you have to subsidize this essential service in some other way so those are the kinds of questions that we're looking to answer with these metrics and have a conversation with the hospital about what the right mix should look like have them identify that right so subsequently there are a number of follow-up questions we would ask you know what is the percentage what percentage do the above defined essential services contribute to total NPR 40 essential service please describe any current or future obstacles to sustainability as we talk about you know workforce and these other drivers pharmaceuticals that may be outside of the hospital's control you know it's important to continue to identify those and if any opportunities could be identified for solutions to those problems or if we disaggregate those problems you know just talk about nursing versus physicians are there particular recommendations that could be made and then we're looking you know like I said for those solutions that either the hospital or some other body might be able to push forward the sustainability of other services so would be anything that was not already listed as essential if you know so in a value-based world we want to prioritize those essential services because we recognize that there may be tension between the use of scarce resources at a community level so that's why it's important to kind of look at these things separately so can the hospital deliver these services at a high quality and low cost you know we talk a little bit about volumes been correlated with quality at least for surgical procedures and are you able to to provide services at a threshold that allows you to produce high quality outcomes for patients and then capacity and utilization is a proxy for efficiency are there underutilized resources in our system and are there ways that we can think about what this looks like you know at a system level and ensure that we're being as efficient as possible especially as you know some of these other services may not be focused on primary prevention and are more focused on specialty are we really investing in the right areas if our theory of change is really about prevention and primary care practice again this is following very similar formats and we look to simplify and create consistency across what we were asking for and so similar to essential services we would ask for those other services at hospitals identify the same financial metrics to understand at a service line what you know the financial viability of that service in addition we have a series of questions or tables on capacity so looking for information on stacked bed occupancy rates meeting visits per day and the number of births at the birthday center is present there are probably a number of ways we can get to capacity so it'd be interesting to have a conversation about that and then procedural volumes so looking at the number of procedures done and the number of procedures performed by the physician to try to understand whether you know these quality thresholds and what the right quality threshold might be so again this is just a visual depiction of what that might look like and then some other questions that stand you know more broadly that are important to consider how will your institution balance the need to deliver care to rural patients who on average may be older or less mobile than other patients with the need to ensure that services are delivered efficiently at a low cost and high quality and then for commercial Medicare reimbursement rates that are greater than 150 percent these described strategies that you tend to bring down the cost of delivering while maintaining access to services for all and then you know table four which is about volume especially three you know where you have hospitals where you have volumes for services below these thresholds of 50 and 25 that were you know identified by the literature that literature review you saw earlier please assess whether the surgical volumes are sufficient to maintain low cost and high quality outcomes for your patients so we would expect that conversation to be more evidence-based question four so assuming that we're moving towards this value-based world and primary prevention and population health our goals and hospitals are held accountable for cost and quality please discuss what an optimized service line would look like for your hospital whether the hospital can sustainably deliver each of the services listed in what table three is referring to the other services table that we just described earlier and if not what action steps might a hospital take to move forward towards a cost effective high quality delivery of these optimized service lines and then what steps can hospitals take to ensure that patients have access to digested services through referral and transportation options establishment of regional collaboratives or other strategies and then given the existing financial and economic pressures to streamline operations how do we simultaneously plan for impending public health crisis I think we've all heard about the coronavirus but there might be other crises on you know on the verge that we should also be prepared to plan for so what is the right level of slack in the system because we don't want to get so lean that we can't adapt in the case of change almost there please describe any current and future obstacles to sustainability and fully delivering cost effective high quality care in your community for your envisioned optimized service line and then please offer possible solutions to those obstacles as we discussed before it would come from the hospital or from other parties so as next steps we would like to discuss the framework and solicit any feedback you might have and then you know I think the next steps from there would be for staff to synthesize that to identify resources for hospitals to use as they engage in sustainability planning we're certainly happy to put together all the materials that informed this work in a place that can be consumed at their discretion and then a special public comment period that would start today through March 11th and then we need to establish a date for publication and submission and obviously a number of hospitals out there own primary care providers and a lot of primary health would be happening within the domain of the hospital and given that population health and preventive health are core to our all pair model effort it would seem to me that we would ask them to enumerate the services that they have now in addition to asking them what you know the services might look like three to five years from now sure and we have there's primary care and pediatric care in those broad categories but there like you mentioned there is nothing further beyond preventive we leveraged the definition from the AHA to be consistent with the existing research and the existing frameworks I think we'd certainly be open to that and especially regulatory integration but thought that the board might have opinions on what the right level of detail would be I think I think it makes sense I wonder if really some of it can be to just be clear that for example when you look at what primary prevention and population health ends up looking like it's usually embedded within primary care lifestyle medicine that could be an OB dental so it may be sort of part of the other labels without explicitly calling it out so maybe we can figure out a way to make that clear and the other area is that I you know as we go through this process and I know nobody believes this that you know that all of the problems that our smaller hospitals have are their problems and not structural problems and you know just to kind of emphasize here on page one of the early pages you have the payer mix for 2018 and you're showing that at 53.2 percent but the range around that number across the 14 hospitals is 63.2 percent down to as low as 30.9 percent and in terms of Medicaid which is you know the statistic here system-wide it's 11.6 percent that range is 7.5 percent 18 percent so you know it's you know and I am hopeful that you know the all-parent model and the fixed prospective payments especially when they get down to a Medicaid level that that process will allow the cost shift to kind of be mitigated because we're going to be able to see Medicaid payments per member per month by the difference hospital service areas and then be confronted with the question why is that so and it might not it might be that the distribution system of Medicaid money is not a level playing field across all hospitals nor is the distribution of the commercial payer mix so I just want to emphasize that that you know here no one's saying that the problems that our hospitals are having are their problems and that can be solved by mixing their service midges and you mix those things that sort which will be helpful but there's also some structural system-wide issues that are outside the control of hospitals that I think folks at the state level are going to have to deal with absolutely and I think this framework recognizes both pieces and that we're all in this together and so I think we're just asking to know all pieces of that story I just want to make a comment if you could go to slide three I think really what you do is it's hard to read anything there but you can see a lot of red on the slide over here and you know really focusing on why we were concerned with this and why we wanted to look at this and it's like you know the key word of sustainability and saying you know it's not sustainable to stay in the red you know year after year and we know that's not the intent of the hospitals and that you know that they don't want to be there either you know either but it's as things are changing demographics are changing and many of these that are in the red could be also looked at that NPR we would see they this their top arm forecast and it's that whole cycle that they can't cut their expenses so it's really trying to address you know what what's the right services toward that size hospital to try to bring them into that range of you know what you saw was adequate even right because you know some of them right off the top many of these hospitals are never going to be in the NPR level of adequate because I think the lowest was 130 so it kind of already shows that we're looking at a national picture and they're driving it down to Vermont that many of our hospitals already fall you know into some of what would be a disadvantaged status so I think we're really just to get across that we're trying to do this to help the hospitals in a process to really look at you know what services they're providing how are they providing and you know where have been it's going to be in three to five years because if changes aren't made now and this continues you know going along at status quo you know there will be more hospitals we can't continue with more years of negative losses for these hospitals so I know you know some of this work may seem onerous but I also think that a lot of hospitals are telling us they're doing this and they're you know they're already looking at this so you know we're trying to help them along that that path and so you know I think just the earlier presentation today really highlights why we need this it's a lot of good work out here thanks just yeah just to echo Maureen's points and I think the presentation this morning this morning feels like we've been here all day nothing um a few hours ago by the hospital budget team underscores why these sustainability plans are so important and certainly I've had questions from legislators about where are they when are they coming and what's it going to look like I think there's a growing concern about the sustainability of our hospitals you know and just to emphasize the demographic challenges are real our population is aging and it's declining and our fixed and variable costs are rising and as we saw earlier at rates higher than our revenues in many of these hospitals and the payment models are changing at the federal level and the state level and they're rewarding low-cost high quality providers so these hospitals sustainability plans are asking hospital leaders and their boards I don't know if this is mentioned but the the desire is to have hospital leaders and the boards engage in these conversations to assess the overall financial health and their capacity utilization it also asks the hospitals to assess their service lines by asking them about service line margins and pricing and volume asking them to review this data and plan for a value-based future which we are going towards and asking them to think about how they can sustainably deliver their essential services in their communities and think about this world in which we're going to be accountable for cost and quality what does that service line look like I think these are the right questions and my hope as Maureen said is that the hospitals already have some of these answers for us this process should be meaningful for them and it's definitely going to be informative for us so thank you for the presentation well Robin yeah I think you know this is this is a hard conversation and it was always going to be a hard conversation but I agree with what Jess and Maureen have said in terms of the the trends that we're seeing and operating margins total margins is very concerning and the way I think about it to be slightly blunt is we can plan on how to ensure that we can sustain our system or we can have it happen through closures and we know from the rural health services task force that a hospital closure does not just impact that hospital it impacts the entire community in terms of the unemployment rate it impacts the other businesses there's statistics in the report about the impact economic impacts from a community hospital that closes it impacts on the services available to people and I don't think any of us want that so while this is a tough conversation to start and to have I think we're going to serve ourselves well in the future by starting it now I also I'll be interested to see what we get for public comment I also don't think this is necessarily a fast process so I think we all have to be expecting that this is not going to be a couple months and then the plans are in and we're done I think it's going to take time because if it's done well and right it would be incorporated into the strategic planning process to the extent it may already be incorporated and those processes of course are continual and constant and you'd also hope that you would then see this reflected in the future community health needs assessments which are done every three years so that's just my sense is that if it's going to be done for real then it's going to take some time and will require some patience but I think that's also why we need to get started on it now so I would just echo the patience part especially as we're coming closer and closer to hospitals budget submission time things like that I think there may have to be some flexibility realizing that Rome wasn't built in a day we can't ask people to do more than what they're structurally able to do but those caveats I guess I'll open it up to the public Jeff hi Jeff teaming with the hospital association um I'm actually going to channel rock one a little bit because I know it's all over this page so I'm gonna do my best to get to all of them actually I think that the comments made by Maureen Jess and Robin I would largely reflect those the hospital association and my members across the state definitely support the work to examine sustainability and have a sense collectively of financial stability of our hospitals both now and into the future so we support that work there's a few concerns and areas I just want to comment on one of them especially having just heard this presentation is that this absolutely adds burden so while we agree with the potential benefit and the hopeful outcome of this exercise there is no doubt that this is a lot of new work on top of budget submissions that already have to be created a lot of the sustainability hospitals are small ones with not a lot of staff and resources to do this kind of work so just the sensitivity to the pretty substantial new reporting that's being asked for here and to the point about timing I think I'm happy to hear about patients I think it's better to do this right and to do this fast I a vase is happy to consider and think about what a timeline could look like and make a more specific proposal and some written comments our point is not at all to try to delay any of this but just to make sure it's being done right and thoughtfully given hospitals other regulatory obligations the second area I want to comment on is confidentiality it the green mountain care board has heard this over and over and I will say it over and over that we have a deep concern about the information being asked for from a proprietary information confidentiality standpoint if legislative language or other legal solutions to that problem cannot be managed I can almost assure you that hospitals will be very reticent to provide information that that could reveal proprietary data for them or could actually speak to issues at the hospital in the community that would be that would be alarming and probably unnecessarily so so preserving confidentiality just hugely hugely important I've heard that from every single hospital I share that concern as do all the lawyers we've talked about this another area of caution and again there's a few CFOs in the room Robin and Mark and Jen who can speak more articulately to this issue than I can but I think on the service line data that's being requested I think it's important to understand hospitals have various levels of ability to extrapolate that kind of information and that some of them may need more sophisticated kinds of systems to be able to do that in the way that that is being asked and again when we're talking about service line kinds of stuff I think it's again speaks to this really serious need for confidentiality given that people expect the services that are in their community to continue to be in their community and if they viewed this as an exercise to potentially change or eliminate those services it could be really alarming and potentially problematic I would also just say that hospitals especially the ones in Vermont they're nonprofit they're mission-based and they make determines they make determinations about their service lines based on the need of the community which they assess and they often provide services that do not have a positive contribution to margin burn units and NICUs never make money we desperately need them so it's really important to understand that piece too so just to reiterate I think hospitals have various levels of ability to get to some of the specific data and we want to make sure we're in conversation about that confidentiality is important and this will take a lot of time and this is really labor intensive so no matter how a hospital approaches the project it's an attempt to get a lot of information it will definitely require significant investment in time and effort and and then lastly just be sensitive to sort of the other regulatory obligations and and we appreciate very much the opportunity to have a voice in this process before these plans were even sort of crystallized and as they continue to be finalized we would appreciate our voice continuing to be part of that process so thank you very much. Thank you Jeff. Is there another public comment? Yes Mark. Mark Stansos from the University of Vermont Health. These are just technical observations from the presentation I would reiterate what Jeff said from a system perspective the hospital systems just aren't built to report on service lines and I would even go so far that Visian which is the standard for the academic medical centers across this nation 105 they don't even have a service line for professional service so that's how challenging you know this is um I struggled to find the place where total margin should be I mean and should be tracked a big impact of total margin is is we know what just happened in the stock market the last three days and today and I have a how do you correlate that to what the services true impacts are from a profit or loss at a local big um basis it really needs to be looked at direct cost of direct payments because if if if the payments are more than the direct cost then those dollars go to funny overhead so um that is another piece as we think about payer mix I think the payer mix there as it was referenced was shown as a percent of total revenue you really need to understand the relationship of the payer mix of gross revenue and net revenue and if those percentages are different there's an implied cost shift period and you want to look at those over time to see if it's going up or going down that is a very very quick way of doing it and then finally I'd just like to say you know um I guess we need to figure out what sustainability means and I think it's good to be looking at services because this is going to come down to services and you know looking at the services across the various well communities and um but I think it's important to understand how we got here we have a very very regulated system and these hospitals are met very managed in a very very tight position along with the impacts of the cost shift too so I think you know these hospitals didn't get there completely all on their own there's some decisions about rates in the past that the green mountain care board has made that has played some of the role there's some legislative decisions with a cost shift that has played some of the role so you know I think for us to figure out what this looks like for us to provide access to care as close to home as possible that what Vermont needs I think it's really looking at all three of those to come together in their specific way and that's going to take time so I mean so um I'm not there here or there but we know those were just some technical comments well that I saw from the presentation thank you thank you very much I'm sorry um the I guess I'm just encouraged to be that going to stand up and say your name and title the uh there's an assumption in a lot of this discussion that it's going to take time we need to redo this that and the other thing the assumption that under the underlying that is that you have time and one of these things I would just remind people is that the the springfields uh snuck up on you totally and it all happened very fast and it's anyway wrote in the novel once that bankruptcy bankruptcy comes on slowly and then very fast and so your assumptions so so the idea that well we just will decide to take time we could decide to take time but it's not at all clear that you've got time what we're thinking about you don't have any is no provision in any of this but triggers in other words how far you've got you've got six hospitals are in trouble you've got so you have no you have no metric okay which says okay help is a is a given hospital is it is it three months out is it six days out is it six months out is it two years out and if you have no trigger then the then then you have no ability to react thank you thank you anyone else seeing none I wish to thank you and at this point is there any old business to come before the board seeing none is there any new business to come before the board seeing none is there a motion to adjourn so moved to move and seconded to adjourn all those papers thank you everyone have a great rest of the day