 So good morning everyone. Everybody's mic down. The first item on the agenda is the executive director's report. Yes, good morning. Good morning. Just a couple of upcoming scheduling announcements. April 11th, we are having our second advisory, general advisory committee meeting of the year. That will be held in the Pavilion, I believe, where we'll update our website. We'll have it here for 10 to 12 that day. And then we are going on the road up to St. Johnsbury and the community up there to listen and learn about what they're doing in healthcare. And that is on April 18th. We'll be up there the full day. And that's all I have to report. Thank you, Susan. The next item on the agenda is the approval of the minutes of March 14th and March 21st. So we'll move. Second. We've moved and seconded to approve the minutes of Wednesday March 14th and Wednesday March 21st about any conditions, deletions, or corrections. Is there any discussion? If not, all those in favor signify by saying aye. Aye. Okay. At this point, Todd, we'll welcome you up. Thank you. All right, my first meeting in the new digs here. Do my best to try to read your... Well, you're dark, so I can't read your faces over there, but my best. So for the record, Todd Moore, CEO of OneCare Vermont. But we could put on a play up here. So maybe when Ham Davis finally finishes his book about this period of health reform, we can turn into a play and do it all together. We can all play ourselves. We can play ourselves. Okay, so I know the topic at hand is hospital budget guidance for fiscal year 2019. And that's really going to be the nature of my remarks. I'm here, you know, truly wearing the hat as an all-payer model, risk-bearing ACO, and my thoughts on that today. Okay, I couldn't resist yesterday. I dropped in a slide. It took me a while to go back and find this presentation from almost five years ago to the Accounting, Reimbursement, and Cost Committee of VAZ, which has all the CFOs of all the hospitals on it. And we were talking about where this could go. This is right after we had crossed over into under the SIM grant having upside-only shared savings programs for Blue Cross, Blue Shield of Vermont's Qualified Health Plans for their first year of 2014 and Medicaid in addition to our Medicare program. And at that point, I sort of predicted that in the future, the Green Mountain Care Board would have a third dial in the middle, which was the ACO economics. And, you know, really that's where we are today. And I remember during that meeting, and I just took that from some sort of clip art that had three dials on it and put words around it. But I remember saying at the time, you know, the biggest risk for us is, will the Green Mountain Care Board, you know, not succumb to the temptation to set those dials at different numbers, meaning, you know, they try to artificially have lower insurance rates but want the hospitals to get more resources to do what they need to do, to keep services aligned. And you can't give an ACO a higher target than the insurance rates can bear or put me in a position that it's out of line with the hospital budgets, which is two-thirds of the spend in the ACO world. So I think the future has arrived. I think that's exactly where we are this first cycle year to year within the all-pair model world, you know, we got through last year inaugural budget submission from OneCare to get us off the ground. Now we're into sort of the first year of what will be a steady state of these three dials. And, you know, I guess I thought five years ago it was going to be challenging for everybody to try to think about this and I think the reality is that. Okay, so a little bit more context. I guess my first reason I am glad to be invited here is the ACO's interest in having those dials aligned. They do relate in very direct ways to each other as well as indirect ways. And, you know, it's more avoiding misalignment than it is that there's a right answer for how to align them, you know, and parameters set in one of the dials as seemingly sound could jeopardize both short-term or long-term setting sound parameters and avoiding unintended consequences in the other. And from an ACO perspective, my biggest unintended consequence I'm trying to prevent is that the hospitals can no longer afford or be desirous to be in the all-pair model and the ACO model. You know, from an ACO under all-pair model perspective, we believe the 3.5% growth target is sound. It was developed to be an appropriate target for a sustainable, smoothly implemented affordability and to be sort of the discipline in the system of keeping excess costs in check. Obviously, moving up with scale targets over time means more and more of the system is in that and I know you as a board in these early years need to, you know, really make sure the rest of the system isn't where things burn too hot outside of the risk-bearing programs. But I think the 3.5% is a good number and certainly in these early years of all-pair model, you know, I'd prefer that to be a big anchor number until we prove that it's overly generous and then maybe in years three or five would be the place where we might turn that back down if things are going well. And then finally that third risk point here, the recognition that our risk contracts with the hospitals are new and fragile and it is fair to say that this transformation is being done on the backs of the hospitals and their revenues and balance sheets. You know, I would probably have different perspective on that if the delivery system reform that was available under the 1115 waiver renewal of $210 million across five years was available to offset some of the costs and help mitigate some of the risks in the early years. But the truth of the matter is we're doing this with some help from the agency human services, some help from the federal government, but mostly on the backs of the hospitals to invest in primary care payment reform for the community, programs to bring in the designated agencies and Home Health and AAAs, infrastructure for the informatics and clinical transformation supports of one care and on top of all of that bare risk on the total cost of care, they're really the risk-bearing entities. And you know, one of the things that you've got to realize is that the one care budget and the hospital budgets during this part of the early all-pair model assume even risk performance, meaning there's no savings or losses that we're going to exactly meet the risk targets and in that that's probably unlikely we're going to be right dead on. You know, that's something you got to think about is put that in the context of these budgets is turning the delivery system into a risk-bearing system, really with the hospitals being the risk-bearing entities. Okay, so with that I'm just going to be pretty punchy here with what my recommendations are and these are recommendations to the board. I understand you're standing to make these decisions and balance multiple points of view. First is please consider that the all-pair model and the one care contracts for risk-bearing ACO programs have 2017 as the actual base year, meaning the way that the revenues were earned under our Medicare Medicaid and commercial programs in calendar year 2017 for us, our programs are calendar years, will be the relevant anchor base period for the next five years and as we measure things like how should those be adjusted and if there's changes in market share, how do we incorporate those against the 2017 base. I'm going to be living in that world and I do worry that if the Green Mountain Care Board hospital budget guidance relies on a different base year that it could get us in the position where one care, what we think is a well-designed rational acceptable payment to hospitals looks like excess net patient service revenue if you have an earlier base year model. So I don't know how, you know, what's really under that rock for you, certainly there could be ways to protect hospitals that might be negatively impacted from a rebasing but certainly thinking about the fact that the way I will be setting the payment rates to hospitals through one care's governance and proposing it to them is with a 2017 actual base year really being the guide. Number two, I really do suggest that you do a statewide multi-payer all-payer model math and I put math in quotes, I'm not really sure they're necessary but really the way we think about, we're thinking about our budget next year when, you know, we appear before you later this year will be to start with that 3.5% factor and again saying, let's start in the first few years of all-payer model with that 3.5% and see does that drive the affordability and provide value to payers and employers but also give us enough money to self-invest in this reform that we're doing on our own as the delivery system. And so really it's no more complex than if you start with you want the whole state of Vermont to grow at 3.5% under all-payer model. The way it works is Medicare's factor is a defined federally published number that we should know in April and so we'll know what that is going to be minus it's 0.2% required by all-payer model. Medicare, Medicaid should be consistent with the state budget and, you know, discussions that you might want to have with the administration and the legislatures, they finalize the state budget in terms of what might be the rate for delivery of services, funding the delivery of medical services to Medicaid beneficiaries. That likely is going to be below 3.5 and probably, you know, closer to zero than 3.5. And then solve for what the commercial number ought to be if we are going to be compliant with our federal all-payer model obligations at 3.5% and use that as a big anchor and see what that number is. Now over time, obviously, it's going to be affordable of a growth rate as possible. I think even in this first cycle that will generate a number that's fairly affordable for your math but that's what I would suggest is to really think about the world in that way because that's the way one care's budget's going to propose later this year. Number three, and this one might be surprising to you, is I believe you should employ a single then hospital subset of the net patient service revenue growth figure for hospitals in fiscal year 2019. I know the idea's at least been in the public dialogue in terms of, well, should we allow a higher growth rate for the ACO lives and revenues than outside under really pretty logical thinking that we want more providers to be in the ACO and see it as their best path. That's where the investments are and for those revenues are going to be really hot. However, there's one real basic thing that really from an ACO perspective I have trouble with is that makes us the high cost alternative when we're supposed to be the ones delivering the value, and so I think in these early years it's better to have a single growth rate across the hospitals that is designed to make sure that they will stay at the table, that they have the resources to self-invest through the one care subset that is one care lives where we really are making a big investment. So in my mind I think it's better to spread that across the whole book of business and avoid this issue of payers and employers saying, well, geez, I'd rather take the low fee for service rates on the fee for service and take my chances in a fee for service because at the top the one care model is more expensive. So what we're going to do, we've had unbelievably great hospital participation in ACOs over the years. We have unbelievable participation this year. I think all the hospitals are poised to really, really take this seriously and want to do the model. So I would say my advice is let's give one more cycle of a single NPSR growth, not try to punish or send hospitals to be in or out and maybe next year we need a pathway different than all payer model. And then finally, my final recommendation is allow hospital commercial NPSR in their budget to be consistent and the related rate structures to be consistent with that APM 3.5% and what you come up with with the allowed NPSR growth factor. It really gets fairly deep into detail but having the actual underlying rate structure of and aligned with the PM per person per month population payment in these early years creates a lot of noise and may even jeopardize a contract impasse between One Care and Blue Cross if their actuaries say the fee for service rates don't support the PMPM that Todd's asking for under the all payer model math. If that gulf is wide enough it may even get us in a little bit of trouble with the Affordable Care Act and some other things that I think about setting their rates. It just creates a lot of noise and challenge in that way. So those are my four areas of advice. I do have an appendix in here with bullet points of the highlights. There's a few more I didn't talk about during my verbal remarks here but I want to keep it brief and see where you want to dive a little bit I have more of a comment than a question. Is that OK? It is. Thank you Todd for your thoughts I appreciate it. Just for myself as one of the people up here who's been talking about having a differential growth rate if that is too soon I'm happy to back off that because I think that we do want to ensure that people and others have appropriately aligned financial incentives and certainly I can see the risk of moving too aggressively in that direction. But I do think it's important for the provider community to be on notice that this is an area that we will want to explore in the future potentially and understand the appropriate incentives and disincentives to ensure the APM. Thank you and I would agree with that. When I worry about trying to get to the scale targets and increase the scale in this model I worry more about how we're going to really offer value to the self funded employers which is a big block that we'll need to see this well and so balancing again that making it attractive to providers and attractive to the payers and employers I think that this is probably the right way to think about it right now. Todd can you go to page 7 your attendance? Of course. Can you put it up there too? Sorry. Question on the last bullet and if this was always explicitly stated and how you presented in the past that really the commercial is the variable that's going to make the 3.5 because when I thought about this over the five year period we needed to average 3.5 and there could be years potentially where Medicare Medicaid were going to be higher but to the extent that they're lower were we always going to just force commercial to then bring it to 3.5 because I can see then why that could create an issue within the hospital area if they need to be aligned but I completely understand that that's the way it was going to work so if we have a 1.8 for Medicare 2.8 for Medicaid or vice versa and then commercial has to just be whatever to force the 3.5 and I'm not sure that's really the best way to do it and so having lived through the whole development of this all pair model I will tell you that the way I've portrayed this is largely the perception of the delivery system of the deal that we're going to set course for 3.5 percent which on a five year basis would be an unprecedented feat it would I don't think there's ever been a state in the union since the Medicare Act that for five straight years grew at an average of 3.5 percent right and so the idea was this 3.5 percent was discussed really heavily with the federal government and the federal government was actually one of the one saying don't go below that for Medicare and Medicaid beneficiaries and so the idea was this is what it would take to offer value but not ruin the delivery system so I think there was general consensus that this was a good number to shoot for that did represent a much lower and multi year commitment than history would say would naturally happen and so I think there was a perception that the idea would be that this would be a cost shift every year now obviously it's easier to do in the ACO risk models and it is to predict where you're going to end up in a fee for service environment and that may be a reason why you might want to you know have the hospital guidance be a tad below 3.5 percent to offer some leg up not only to the ACO but to the non ACO business but you know I got to be honest one of my reactions to all of the things that were structured way and one of the big things the state negotiated to get was there's no cap on the Medicare growth rate so if the Medicare growth rates go to 5 percent and we got to take that 0.2 percent and it's a 4.8 percent factor don't you want the delivery system to guarantee all of that would go to the commercial rate relief so really a lot of things you think about in your hospital and you're going to have to look at the other side that if Medicare and Medicaid are higher that the commercial would automatically be lower so that is part of the way at least I've always thought about it and having been at a lot of the meetings the way that I thought that the original principles of all pair model and tests anticipated it would work. I just wonder whether Medicare expectation was actually because I worry more about the because we need to average 3.5 would this have been an opportunity this year I understand it's early on but to have a number that would have been below 3.5 and then if 2 or 3 years down the road Medicaid and Medicare were higher and even if a commercial pressure was still higher and we had a 4 or 4 and a half that year it would be okay because we would have had a number of years where potentially it could have been lower and in the future we don't know what that's going to be and you could get that pressure on the other factors of being higher than it forces a commercial low. Yeah I mean I can only tell you from the ACL perspective I do not you know anticipate you know in any time soon coming into you with an ask that's higher than what I mean part of this is if the natural rate of growth is 4.5 we've agreed to live on 3.5 we've agreed to eat that extra percentage that's what the provider community feels is the deal that we've made. And then just to the actual audience point in on one number you know are you coming in saying you think that one number needs to be 3.5 or you're saying there can be a little bit lower than that it's a loaded number versus having us break it out in two. And you know that looks like where we're going is to have one number in order to support what you're saying does that number have to be. I would be very comfortable with 3.5 knowing all the investments that the hospitals are making and the bearing of risk. However you got to realize the one care budget if you recall really once we finally have in place that we are taking from the hospital slice where what would actually have been predicted for hospital spending and putting it in primary care including community based primary care outside of the hospital and community based programs and funding other things. And so you know you know within our model we already have set the president at one care of hospitals might not grow you know in that as we scale lives to have that investment there I'd be most comfortable with 3.5 percent guidance. I think you know somewhat lower knowing that I'm keeping some of that revenue off the top and maybe the hospitals can budget the lower net patient service revenue from one care there may be a meeting of the models in a very elegant way you know below 3.5 percent as your guidance to across the U.S. hospital spending is about a third of total health care spending all indications from all the data that we have is that Vermont is significantly higher what are you using as your number percentage of hospital spending? So if you really so in my world my contracts have a very defined set of services that Medicare it's generally for to his party in part B so it's you know hospitals have a medical type services and a few other services in that inpatient and outpatient hospital in that type of spend the hospital for inpatient and outpatient spending is about two thirds of the spend so I think what you might have seen Kevin is just the inpatient hospital portion of the spend now in terms of you know benchmarking and thinking about where we are I know for Medicare we're nationally very low it's really hard to find good data on where we are from a you know statewide all-payer model system I would say the strength of Vermont's hospital system is one of the bedrocks that made us ready to take on this 3.5 percent challenge and you know the reason why we have such good hospital participation. I don't know if you've even had a question but no I think the point I was just trying to make is that it's not all hospitals there's not a direct correlation to hospital versus total spend yeah I think that that's that's correct and you know one of the reasons why I really for years have been telling the hospitals get ready for a fixed payment model for your spend that we need to pay attention to and sort of driving that appreciation on how do we allocate that and think about that and control that because it's really the total cost of care that really is the most direct driver of affordability because you got to pay for the total cost of care if you're going to cover somebody with your Medicare Medicaid or Blue Cross that's the way this is on the agenda I'll invite Mike up and have him do his presentation and then we'll do the public comment and questions for both of you at the same time. Yeah I'll stay. Great thank you. Mike. Good morning. Good morning. I think my first response to Todd is if we're doing a play I really don't want to play me. What would you like? Yeah. I was starting to go there we'll have to draw straws I think but we should definitely switch it up. Thank you for the opportunity to come speak to you a little bit about the budget guidance, hunk of budget guidance about this process. This is also my first time in this room since you moved here and it does remind me a little bit of high school and it does remind me a little bit of high school. Yeah the problem is staying away. So I think the first point I really want to make sure I make clearly is an appreciation for a different approach that we experienced this year with regard to budget guidance. The board has approached us and has worked with us in a different way that I think is substantially better. It will lead to our healthcare advocates office ability to get questions in a much more timely fashion and an ability to focus our comments during the hearings in more of a clarification and responding to presentations and fashion rather than trying to get questions and answers to questions that we hadn't been able to get articulated yet. So I appreciate that and I think and hope that it's a model that we can build on for the other regulatory functions. Generally the healthcare advocates office agrees with the concept of uniformity between the different regulatory functions and being able to do apples to apples comparison. The challenges that each of the regulated entities are not the same and don't serve exactly the same populations and different populations are experienced in the conversation that was just had about whether 3.5 across the whole system makes sense and how different populations from different payers would experience that is interesting to us. And so I ultimately believe that there is a balancing act that the board has to apply here of how to have some uniformity in its approach while also recognizing that there may often be needs for a more granular approach to understand how different populations are affected. I did find myself as I was sitting here listening this morning with the typical questions about your office how would a consumer experience this? And I don't have a really clear answer to that question but it's always a question that comes to us as I think about the cause that come into our office and generally I think the answer is does fold back on people's ability to get the care they need because of the cost so the one other we generally support the board continuing to put some real downward pressure on the growth we haven't heard any discussion yet today about the question of rebasing Health Care Advocates Office has been clear in our comments that that we believe that if there is a need to rebase that it happened as part of the regular budget process not separately and again I'll approach that question from how will people read the decisions that the board makes the public and the regulated entities will they see the board's action as a the board made a decision as to hold to that decision or will will the public or the regular regulated entities see some concept of the goalposts being moved I think that's really important and it's important for the board's future so those are generally my comments and I'm happy to receive to respond to any questions or is it important questions or comments Robin? I actually have a reaction to what you just said about how people react to what we decide we're an independent board for a reason which is to take the politics out of it and to focus on the facts and the data so I don't think that you were suggesting otherwise but just for myself I have a strong reaction to it so I'm going to say it out loud which is I think the reason why we were appointed and the reason why we can be removed for cause and not at the whim of politics so that we can be a little bit insulated from those dynamics and be able to make hard decisions in a data-driven way so I appreciate that and I don't disagree with I would just comment on the discussion on rebasing and the timing of that and I think perspective on is it more of a response to actuals and we do have a point in time to review actuals and then make decisions off of that versus waiting until a budget time to make that change and what does that reaction time then give a hospital if we're going to rebase them so I know one of your comments was one year doesn't make a trend you know I think it's one of the written feedback that you guys did like not just one year and in particular the you know hospital that we had talked about rebasing UVM has had a three-year trend of exceeding the number significantly 28 million 25 million 30 35 million for the past three years so I would say that was taken into you know as a factor in determining whether we would do something and you know should we do it yeah the timing is do we do it in response to regulating there was an excess regulating something on that excess and then making a change so I think it's really more of a timing and being able to give responsiveness to hospitals rather than at budget time all of a sudden then saying hey we're changing the game here and we're rebasing you so you know I appreciate your you know comments but I think it's also it's a matter of perspective on when does that timing absolutely support the board's ability to rethink and any question that it's answered in the past of course you have to look at the data that's before you and respond to it at the same time a little bit of as a a feedback loop you know how we do these things do matter and the message that you are an independent board but you have an impact on the world and the message that's sent out to the I'll focus now on the regulated community I think is important so there is something about the hospital budget process that includes you know public and transparent process that we think is important and and so at the same time I'm not going to disagree with one bit your ability and right to rethink a decision that you've made in a timely fashion given the data that's in front of you okay so this time I'll welcome the public to offer any comments or questions to either Mike or Todd just get it up and stick the name and address your question through me Mark I have one question I think for Todd I know we're talking about the growth rates of 3.5% but can you put that in comparison to the part to the risk the participants are taking for you know consuming that fixed payment model should there be a volume increase because I know we're focusing a lot on percents today but it would be good to put the dollar amount of risk and perspective on the total as a percentage because I just don't want us to lose that 3.5% isn't guaranteed there's a risk component that all of the participants are taking and that's an important message that I think that shouldn't get lost today that 3.5% is the best case scenario in a state where we know our population is aging and particularly that's going to get Medicare the hardest and you know Medicare is one of the biggest participants in the 2018 model well I mean as we sit here right today for 2018 the loan 2019 when we will expand scale at least at some level hospitals are really taking two levels of risk to make the 3.5% trend rate real fixed prospective monthly payments to cover any services that they provide inpatient outpatient specialty physician primary care fixed prospective payments monthly to cover all services to the attributed lives of of one care to the degree that more services are demanding they are not going to get more money for one care's lives and delivering those services so you know I urge you to think about this may be the being of an error that enforcement model you know and so said another way you know hospitals may need to deliver more services into a smaller revenue pie for their own organization effectively diluting what would be the equivalent fee for service value so it basically is a forced rate reduction implemented a different way at least within the model now the thing that I think is really under appreciated is somebody's got to bear the total cost of care risk for the whole system as Chair Mullen said includes a whole lot more spending but having the hospitals locked in is helpful but that doesn't relieve the ACO of having its full level of risk on the total cost of care that could be driven by hospitals not in the system hospitals in Boston hospitals in New York City you know you know fee for service that have not agreed to be part of one care all of that risk is also being born by the hospitals and as we sit here right now the worst-case scenario probably pretty unlikely would be at this time next year I'm preparing them to write combined across 10 hospitals checks to one care to send to Medicare Medicaid and Blue Cross of 23 million dollars okay I mean you know this is serious levels of risk taking both those one the fixed revenue risk for their own services and two being the risk-bearing entities on behalf of the whole system up to the tune of 23 million dollars this year and likely will be north of 30 million dollars for calendar year 2019 you know if we get to the higher ends of our hope for scale growth just make a comment on the age issue because I think one thing that's maybe the Medicare component of the all-fare model and last year we did look at that and it was not advantageous to do so so I think it's just important to recognize that that's a factor that we can adjust for if it's helpful okay other questions or comments from the public Jeff thank you I wasn't sure it's quite an entrance yeah yeah for a good time right so I wasn't sure if there was going to be a public comment period proceeding the vote and following the path but just wanted to make a couple points at this time we have sent as you know a few letters from Boz reflecting our position on hospital budget guidance one might consider if the NPSR mini series so we could figure out who would act in that one but as you know throughout those communications we encouraged 3.4% target and we did that for several reasons some of them was our own analysis of the inflationary and wage pressures our hospitals face some of it was around the investments and contributions that they're making and we outlined all of that to you I'm also trying to channel a little bit Jill Barry Bowen who can't be here today but also outlined all of that to you and in addition to that or complimenting it is what you just heard from Todd Moore that the target in the all payer model was carefully and meticulously negotiated with the federal government and itself was considered and still is a very aggressive and promising target for healthcare growth that as Todd mentioned is almost impossible to parallel elsewhere in the nation certainly on the trend that we're trying to produce so for those reasons we agreed that the three point we stand by the 3.4% number being the right one also pointed out and we have too throughout this process is that hospitals are in fact bearing the risk they are the ones taking on the transformation costs they are the ones continuing to invest and move forward with the model that is uncertain but also promising to them and doing it in a way again that is not happening elsewhere in the country as we continue to build on the great success we've had taking 600 million dollars in costs out of the system with the current path that we're on and the four of vote takes place that we stand by the 3.4% for all the reasons we've outlined and that we hope you'll thoughtfully continue to give room to hospitals to make these investments to invest in their communities in the way that they're expected to and those expectations do not diminish or go away regardless of what role they're playing in health reform and elsewhere and that you acknowledge the contribution that they're making the risk they're taking in financial and respectable progress here and as we said in our first communication to the board and our last we believe that it's better to move incrementally and wisely than too far too fast and thereby risking the good work we've done and the potential we have to do more so thank you for hearing those comments and for considering our input throughout the process thanks thank you thank you thank you thank you very well Kevin do you get to move forward? for the record passions and for the director of health systems so what I'd like to do today is just very quickly describe the activity that's occurred to date around the fiscal year 19 hospital budget guidance and then provide some staff recommendations for the board to discuss and potentially decide on first of all an NPR target for the fiscal year 2019 guidance and that really has three components the first is the NPR rate the second is the revenue that would be subject to the NPR target and we've heard a bit about that today and then also the allowance for health care reform investments if any and then finally some material to consider some recommendations to consider for discussion and potential decision on whether to rebase the fiscal year 2018 budgets for those hospitals that had greater than 2% variance between their 17 actuals and their 17 approved budgets and that rebasing would really be used as the basis for the fiscal year 2019 calculations so activity to date the draft budget guidance has been released the latest version was released yesterday we did get quite a bit of public feedback and so comments were considered some changes were made and you have that latest budget guidance second we did some analysis between the 17 actuals and budget and that is led to discussion on rebasing third we considered this idea of applying different MPR targets to the fixed perspective payment revenue from the ACO and to the fee for service revenue again we've heard some discussion on that and gotten feedback on that as well and then finally there's been some preliminary discussion on the MPR target and allowance for healthcare reform investments before I get into the financial discussion board member Holmes had asked that we highlight that for the first time in the draft budget guidance we provided some information on quality measure results and specifically results around as many of the 20 quality measures that are in Vermont's all payer model agreement with the federal government as we could obtain data for I want to acknowledge my colleague Michelle Lawrence who helped compile this information and we used a variety of sources we looked at blueprint community health profiles to get some of the information and we used health department data for other information and I want to note that the way we present these results is not by hospital it's either by health service area or hospital service area as you see here or in some of the other metrics it's by county but the idea was to give the hospitals some information about how we're performing statewide on these metrics and how each area each region is performing so that we can hear their reaction to that during the hospital budget process and it's really part of our ongoing effort to link the hospital budget process with the all pair model to link finances with quality because after all improving quality of care and providing needed care to Vermonters is what this is all about so back to the issues at hand today the first decision point and the staff recommendation that I present to you is what should the NPR target be and the staff recommendation which has been tweaked slightly from last week is to apply a single net patient revenue target of 2.8% to all revenue and 0.4% for health care reform investments last week we had shown 2.75 and 0.45 upon further thought the 2.8% actually matches the increase in actuals from 16 to 17 and the allowing the 0.4% to remain constant from last years health care reform investment rate allows some consistency and gives those hospitals who are seeking to increase their health care reform investments to be able to do so at a slightly lower pace so that's the recommendation on the NPR target I would ask from a process point of view to stop here so my blood and mine I like it when things are linear so if we could just have a discussion on the NPR first I think it would be helpful I can make a motion that would help sure start conversation okay so I would move that we accept the staff recommendation for a single NPR target of 2.8% with all patient revenue and quick we're aligned with the transition to value-based purchasing increased access to primary care reduced deaths from suicide drug overdose and or reduced prevalence of chronic disease so those are the buckets from the all parent model so putting some boundaries around that .4% health care reform I'll second so it's been moved and seconded we'll open it up for discussion by the board it wishes to make a comment on this I will open it up to the public afterwards so on board discussion Tom just a clarification I heard just the beginning of the motion which was the 2.8% quite a 4% but the narrative after that I didn't you were speaking that character then okay so it was a .4% I basically just took from our the written budget guidance the boundaries around what we would expect that .4% to be specifically the language in there was the .4% to be used for transition to value-based purchasing and or increasing access to primary care reducing deaths from suicide and drug overdose and or reducing prevalence to chronic disease so it's alignment it's on page 9 of the hospital budget guidance so is there any other questions before I open it up to the public seeing none is there anyone to comment or question at this point time seeing none if there's no further discussion all those in favor of the motion signify by saying aye aye any opposed say nay let the record note it was unanimous decision of the board k pat okay so the second potential decision point again is rebasing those hospitals with a greater than two percent variance between their fiscal year approved budgets and actuals we have the staff has two recommendations here and then an item for discussion the first recommendation would be to rebase the University of Vermont Medical Center and Porter Medical Center for the purposes of their fiscal year 19 calculations and you may recall from last week that the calculation is that we would use their fiscal year 17 actuals as the base and then we would apply the system wide fiscal year 18 targets to update that base so the target for fiscal year 18 is 3 percent as a base and then up to 0.4 percent for healthcare reform investments so if the hospitals 3.4 percent allowance then they would see their budget amount rebased by 3.4 percent the second recommendation is that hospitals with a variance of 2 percent or less between fiscal year 17 approved budget and actuals should not be rebased so you'll recall that we talked about a 0.5 percent factor and 2 percent and the board decided to focus on those hospitals with a greater than 2 percent variance between their budgets and actuals so those hospitals that fell below that would not be rebased if you accepted this recommendation and then the discussion point is really around the other 4 hospitals who had a variance of greater than 2 percent between their fiscal year 17 approved budgets and actuals and they were below those hospitals are Gifford Medical Center Grace Cottage Hospital North Country Hospital and Springfield Hospital and the discussion point here is does the board think that during their fiscal year 19 budget submissions and subsequent presentations doesn't make sense for those hospitals to look at their actuals look at where their 18 actuals are trending according to their 18 budgets and then look at either justifying why they should base their 19 budgets on their fiscal year 18 budgets or projected revenues or should they propose a rebased budget and I just outline those points a little bit more on this slide but the idea is that when they submit their budgets and come in and this really would apply to all hospitals including if you opt to rebase UVMMC importer we would really like to see during the submissions and the presentations that all those hospitals who had that you know decent size variance between their 17 approved budgets and actuals we'd like them to make sure that they are sharing with us what's the degree to which their 18 actuals are trending to either their approved budget or if they've been rebased to their rebased budget what's their justification for basing their 19 budget and their 18 approved budget if they decide to do so or alternatively propose a rebased budget and if their actuals continue to show a variance we'll know a lot more when the hospitals come in to present in August but if they continue to show a variance of greater than 2% as the year progresses they should anticipate that there'll be discussion on mechanisms to address the variance and then the last bullet here really outlines a point that we made last week and that's that if a hospital stands by its fiscal year 18 budget when their 19 budget is approved if they say no this is the right basis we need to base it on the fiscal year 18 budget and then it turns out that the 18 actuals vary by at least 2% there is a possibility that the board could decide to formally revise their 19 budget so I'll stop there that those really do consist of the staff's recommendations and potential decision points are there any questions for Pat from the board is there anyone from the public who wishes to make a comment or a question or so address it through me okay is there a board member who would like to make a motion I'm happy to make a motion speak loudly I will speak loudly and I will speak into the microphone out this way I guess I would preface this by saying that I think that the work that we've been doing and thinking about excited about moving away from this idea of budget to budget and having baked in fictitious budgets and actually taking into account the reality that's on the ground for those hospitals that are up and those hospitals that are down and really looking at actuals in our budget process a little bit more thoroughly so with that said I think what the motion is going to make this really this morning I move that we revise UVN budget submission as outlined in the staff presentation and ask that the other hospitals with a greater than 2% variance between fiscal year 17 actuals and budget to submit fiscal year 19 budgets more closely aligned with their fiscal year actual and fiscal year 18 projected actuals so in other words we rebase UVM and Porter hospital and those hospitals that have exceeded the 2% what we're asking them to do is really take a look at their fiscal year 18 where they're performing and submit to us a budget for fiscal year 19 that more accurately reflects where they think they're going to be in fiscal year 19 based on their actuals is there a second I'll second is there a discussion on the board okay I just want to make a couple of points one on the the rebase of UVM and Porter you know one way to look at this is to separate that rebase to when we actually complete what we are going to be recommending to regulate for UVM in particular so I just want to at least put the caveat out there that there is a possibility their NPR could be impacted for 2019 if in those final recommendations there's some adjustment to their rates for insurance and we know there's some other things floating around we may discuss that wouldn't necessarily impact rate but you know I was one looking at this saying we should wait to formally do the rebase until we completely wrap up the 2017 process and determine if there's an impact on their NPR for that so to allow it to go through if we kind of place that out there that there is potentially some impact that could be coming down the road on the NPR should we decide to regulate the by the insurance rates so I would just put that out there and the second bullet I think is fine you know if the hospitals had a variance of less than 2% absolutely they should not be rebase that wasn't the intent the third bullet you know many of the hospitals came back last week and I separate these into two buckets there's the hospitals that were over and so they were kind of getting something and the hospitals that were under that we were taking away from and you know they all came in and basically we're pitching that they're going to be close to their 18 actuals or things that had happened 18 budget things that had happened that were unique in 17 and so you know I'm open to listen to that but they're budget time in August when they do their presentation they do it on April data so it's still pretty early April or May data but by August all of these hospitals that were rebased should have a pretty good read on where they're coming in and if they're still coming in for the hospitals that were under underneath then our intent very well could be that they will be based on where their 2018 actual is coming in because that's really when you think about it we expect people are going to perform to their budget and if we give a rate of you know 2.8% on top of that excluding the healthcare reform investments then the expectation is they're getting 2.8% on their budget if they vary quite a bit from that particularly on this case below it then the expectation should be they're going to get 2.8% on that when we look at giving UVM potentially quite a bit of an increase for 2018 on the chance that they're coming in under and they're not hitting that budget and they're coming in only 30 million not 39 million up you know that should be a factor for consideration if they're over that's a different story but if they're coming in under they should expect that we're going to be looking at that for both Porter and UVM and addressing so I just wanted to make those clarifications from my point of view anything else Tom this discussion this morning is is difficult for me anyhow because in the context of wanting to promote affordability which is involves cost constraint at the same time wanting the ACO to be successful at the same time at the same time not having real time near real time data to make a decision on I mean we're talking about NPR but in the end it's not NPR that is the basis for determining the success of the all payer system it's V-Cures data that will be used and we don't even have a baseline of data established for 2017 the base year in terms of rebasing Porter I would note that by rebasing UVM and Porter based on their 2017 actuals we're kind of baking in the 4.7% increase of 17 over 16 that UVM experience and we're baking in the 4.2% increase 2017 over 2016 Porter and that may not be problematic in the long run but it might be because we just haven't seen how these things will roll out over the next two or three years and it's also I think problematic that you know we're just using one year over year as opposed to the trend line if we use the trend line for UVM from 2015 for example to 2017 it would be 4.2% and that would have an effect at NPR which would have an effect on affordability so I I think I would rather kind of align myself more with Marines let's wait and see and now redo this in the middle of the 2018 budget process and save this for to wrap it all up in the 2019 budget process my hope is that they exceeded their NPR by about $38 million $20 million of that fell through their operating statement to their bottom line increasing their excess revenue over expenses from $63 million I think to about $89 million and we will be having a discussion I think I hope about what to do with that if anything that extra money revenue that fell to the bottom line so for me a wait and see approach makes more sense than making a recommendations for change mid-year and in the context of really not having clear visibility of the impact of these decisions and baking in for those hospitals that exceeded their NPR budgets for 2017 kind of baking in those increases I just want to clarify I don't think we're making a mid-year change I think this is a part of our fiscal year 19 guidance so we're providing guidance to the hospitals for the basis upon which they should build their fiscal 19 budget and I do hear Maureen's point about the reality is that yes when hospitals come in in August we should be looking at where their actuals are compared to the budget and we will look at that but I think at this point we're trying to give guidance and to give direction and I think the hospitals need to know upon what basis they should be building their budget and I think what we're trying to say here is build your budget based on the reality that you're experiencing whether you're up or down so we're acknowledging the realities that we're seeing think through this process I would just add to my comment if I could that people if you take the UVM network of UVM Medical Center Porter in Central Vermont they are almost 60% of the hospital in VR and so they have these their impact is much greater than all the other hospitals behind I just want to clarify Tom in the comment you made about I'm not saying from UVM and Porter until the 2019 budget time I was just saying in the next month I believe we're going to be revisiting the overage that we've experienced in 2017 and wrapping it up there and I did say I'm willing to say let this go through with the caveat there's potential that one of the options if we do anything with rate the other hospitals that were under I'm I think we have decided to look at them when we do the budget time and see where they're trending because I don't think it's fair to pull the rug out under the midway through the budget they're all trying to hit their budget numbers and midway through it's difficult to try to change that course but do want them to be unnoticed that specifically in 2017 if that continues in 2018 that's what their budget should be based on is that trend but certainly during the course of the year we don't want to tell them to stop doing anything and adjust their budget midstream if they're hitting it but if they're not and they continue to fall short that will be a factor so I just want to follow up on that I want to make it clear and I think hospitals and I don't think anybody would do this but by saying that we're looking at what your actual budget in the current year ends up being that should not be taken as a reason to try to encourage more tests or procedures or anything else and I don't think that would occur but I think that hospitals are willing partners in trying to bend the cost curve in Vermont and I get the point of 2017 actual enforcement versus budget guidance discussion but the reality is that the two are very much interlinked because what we will be giving for guidance is based on what we see historically and I think if we make the decision today we actually are putting ourselves in a better position in the next couple of weeks or longer but no longer than a month figuring out what enforcement actions actually are of 2017 so to me it's not it's not a bad thing to make this decision now and move forward is there any other discussion on the motion? Can I just raise something briefly just a technical point I know we've been talking about the 2% variance and in the guidance it is still what it was last year it says may look at hospitals with the 5% and I just wanted to clarify if the board is saying for 2019 it's the 2% that should maybe be updated in the I think we're still going to look at it if it's more than a half percent it is permissive but we've kind of moved it a little bit if not I'll call the question all those in favor of the motion signify by saying aye aye those opposed no not the record show it was a 4-1 vote Pat I just wanted to on behalf of the board thank you it was exciting to see you step up and move forward really moved into it at a challenging time as there are so many decision points and I just want to thank you for the long hours you put in and I know you have a great team and they're happy to have you as their leader so thank you thank you thank you is there any old business to come before the board what's that is there any old business to come before the board is there any new business to come before the board seeing none is there a motion to adjourn so moved second moved and seconded to adjourn all those in favor of the motion signify by saying aye seconded