In response to the commentary by former UVM President Tom Sullivan regarding healthcare in Vermont.

A recent VTDigger commentary by UVM former President and current professor of Law and Political Science Tom Sullivan raises debatable questions. In his “meeting of the minds” call to consensus, he includes “regulators.” Well, I’m sorry, but that’s not what regulators do.

Vermont has two regulators with purview over healthcare. One is the?Green Mountain Care Board?(GMCB) established in 2011 and the other is the?Vermont Department of Financial Regulation?(DFR), formerly BISHCA.

20 years ago, I chaired Fletcher Allen Health Care – now UVM Medical Center. It was a challenging time. We negotiated and oversaw the merger of three Burlington hospitals and one foundation into one entity, oversaw the most aggressive buildout plans in the hospital’s history, and sought and hired a new leader after our former president was convicted of lying to our state regulator, the Vermont Department of Banking, Insurance, Securities & Health Care Administration (BISHCA) and then remanded to serve a two-year federal prison term. Since that time, I’ve tracked our progress… or lack thereof.

Recognizing that healthcare delivery does not function as a free market, the GMCB regulates healthcare and DFR assumes BISHCA’s earlier mission to oversee other monopolies.

Healthcare systems (sellers) have enormous leverage over patients (consumers), and for this reason, the consumers’ interests need oversight.

Using the pitch that economies-of-scale will produce savings and improve outcomes due to better care coordination, Vermont and national healthcare systems have consolidated and grown into massive systems. But any measurable savings have not been passed on to patients, nor has care coordination improved.

In our own state, health system prices and premiums have only grown, Vermonters’ access to care remains a problem, and care quality declined in 2024 (page 22). Consumer Affairs lists Vermont as the most expensive state in the country for Healthcare services.

Like for-profit companies, nonprofit organizations have a predisposition to compete to achieve monopoly status. But economists have long warned that monopolies are bad for consumers since they rarely deliver the promised economies-of-scale that enable lower prices, nor do they necessarily deliver greater quality. They deliver concentrated market power. And that power allows them to raise prices, as we’ve seen in Vermont.

Healthcare’s not the only monopoly in our country. Unregulated transportation, telecommunications, public utilities, and pharmaceutical companies have not historically delivered competitive costs or quality. That’s why we’ve established federal and state public utility commissions -- to ensure both the financial sustainability of the providers but also their quality, accessibility, and cost in support of the common good. Sadly, we have yet to do so, with Pharma which only increases healthcare costs.

Organizations don’t get to “negotiate” with their regulator. Market regulation is the stopgap measure put in place to protect the “common good” when market expansion works against the interests of consumers.

When pulled over for speeding, do you negotiate with the officer? Citizens in a free-market democracy generally understand and accept that the rules of the road exist to ensure a common good.

The GMCB’s role is to regulate healthcare delivery in Vermont. The members and staff serve the public interest by working to ensure we have accessible, affordable, high-quality, and financially stable providers for Vermonters. Its role is not to build consensus, find common ground, or negotiate with those providers and organizations.

When first established under Con Hogan, the GMCB was finding its way in a forest of theories about how best to deliver healthcare. I know as I was on the original GMCB advisory Board along with 50 other Vermonters. Sensing no serious regulatory initiative all but a few of us resigned.

In 2022, with the appointment of Owen Foster, a Vermonter with former experience with the U.S. Dept of Justice leading the prosecution of Purdue Pharmaceuticals and the Sackler family for criminal mis-marketing of Oxycontin, the GMCB began to take seriously its regulatory mission, defined as “population health,” i.e. guiding and regulating a system that delivers high quality and timely access to affordable care to its defined population of Vermonters. Prior to that time, GMCB had been largely responsive to the expressed needs and wishes of Vermont’s hospitals, especially those with the greatest financial and political clout.

The GMCB’s approach is hardly “single-bullet,” as Sullivan proclaims.?With extraordinary effort it has sought relevant data from those hospitals it regulates and has raised the critical issues of a shared definition of specific healthcare data, internal funds flow, audit processes, and transparency.

Just in the Burlington area, there are four related entities: UVM Medical Center (UVMMC), UVM Health Network (UVMHN), UVM, and the Larner School of Medicine (Larner), each with its own independent governing body.

UVMMC is an “academic medical center and a tertiary care hospital, UVM is a Land Grant university. And Larner is a college of medicine financially tied to UVM and UVMMC. UVMHN is not a hospital, but rather a nonprofit business aggregation and holding company focused on acquiring, owning, and managing hospitals in Vermont and New York, whereas UVMHN-Ventures is a for-profit business (P.12). ?As such, it increases rather than lowers healthcare costs. UVMHN owns three hospitals in Vermont -- Porter, UVMMC, Central Vermont, as well as Vermont Home Health & Hospice -- and three in New York -- Alice Hyde Medical Center, Champlain Valley Physicians Hospital and Elizabethtown Community Hospital.

Although the GMCB regulates Vermont healthcare and insurance providers it has no authority over New York hospitals and infrastructure.

Meanwhile, from a regulatory perspective, absolute audit transparency in the flow of funds between each publicly-governed entity (UVM, UVMHN & UVMMC) is critical, as it raises the question of how much patient revenue from Vermont makes its way to support New York hospitals.

Sullivan makes a strong case for Larner which does indeed benefit from a clinical partner such as UVMMC, but the rest of his observation betrays an intrinsic misunderstanding when he refers to it as an “academic medical center and a community hospital.”

It’s widely accepted that we can save money and deliver better care in our local communities. A financially sustainable integrated healthcare delivery system that delivers trauma-informed primary care, home health and aging care, chronic-disease management, hospice, mental health and substance abuse disorder counseling in our local communities is understood to be the most cost-efficient and effective. Urban tertiary care hospitals have much higher delivery costs and wait-times are much longer.

A recent analysis by BCBS-VT compares for four basic procedures at UVMMC, Dartmouth, community hospitals and at freestanding facilities. The results speak for themselves.

Again according to Sullivan, UVMMC reported 66,000 emergency room visits. It would be useful to know how many of those were primary care visits. There’s no place more expensive to deliver primary care than in an emergency room.

We’re told and it’s generally accepted that these adjacent services at UVMMC makes Larner a much more attractive choice as medical students can interact on all levels from primary care to acute specialty care. But at what cost to patients and quality. Do we even know how much of UVMMC’s costs actually support Larner?

Sullivan goes on to say that the Network’s annual economic impact in Vermont is $2.7B but does not provide a source. Nor is there any source given for the $348M in “community benefits,” which must include the $15 million invested in the failed OneCare Vermont initiative. We do know from National Academy for State Health Policy (NASHP) and American Hospital Directory (AHD) data that UVMMC is one of the most expensive hospitals in the country (slide 116).

There’s some $935 billion worth of annual embedded waste embedded in the $4.5 trillion dollar U.S. healthcare system. How much of this is within UVMHN and UVMMC?

Furthermore, if the $1.9B budget of UVMMC is divided between expenses attributable solely to patient clinical care and expenses for administration and management, new federal data indicates that the ratio is one of the highest in the country (page 8).

UVMMC’s 2023 IRS filing indicates that the top 19 administrators made $12 million in total (page 8). Do the math.

The myth of the Medicare-caused cost-shift is central to UVMMC’s argument for how much it must charge, i.e. “We must charge more because Medicare underpays us for standard procedures.” But in an analysis of 107 comparable (by bed size, average acuity, & outcomes) academic medical centers, 81% of them either broke even or made a modest profit solely on the Medicare reimbursements. Why can’t UVMMC?

When I was chair, we took seriously our role on behalf of the people of Vermont to hold leadership accountable to delivering on the mission of quality, affordable, and accessible healthcare.

Most importantly, our leadership knew to listen and be guided by the voices of those working professionals who made possible the quality of care for which we were known. Now the voices of today’s healthcare providers -- the nurses, physician assistants, technical staff, and physicians are apparently irrelevant.

A recent letter sent to management from the Vermont Federation of Nurses and Health Professionals along with the more recent letter sent from the service workers union aligned with the AFT provide a view of pervasive moral injury among those who deliver the quality of care and a severe hearing loss among those running the “business.”

With all due respect, we need a common understanding of unimpeachable data and funds flow, transparent auditing, accountable nonprofit-board governance, and a shared goal and understanding of Population Health and how to deliver affordable care in a timely way to all Vermonters, not happy messages. But above all else, we must support the absolute authority of the Green Mountain Care Board to regulate an industry many Vermonters can no longer afford.