When a public or private institution is in trouble, there's a decent chance that Mike Smith will get a phone call. The former Agency of Human Services secretary has been tapped to help troubled institutions from Burlington College to FairPoint Communications.
The Green Mountain Care Board, the state's health care regulator, recently asked Smith to lead a review of cost-effectiveness of many programs at the University of Vermont Health Network.
Vermont Public’s Bob Kinzel sat down with Smith earlier this week to discuss his new oversight role and the challenges facing Vermont’s health care system. This interview was produced for the ear. We highly recommend listening to the audio. We’ve also provided a transcript, which has been edited for length and clarity.
Bob Kinzel: You've got a lot of experience in state government dealing with health care. Let's step back and take a look at the overall condition of Vermont's health care system. I'd love to get your thoughts on that. Some people think we're really at a tipping point now that, unless some major changes are made, this system is in dire financial shape. What do you think?
Mike Smith: I think they're correct. I think we're in a perilous situation right now. We have issues with affordability, we have issues with quality and we have issues with access, and I think those are really at a precarious point at this point. We have our largest insurer who's in financial problems. We have costs that we can't afford in our health care system, especially in hospitals and other areas as well.
Bob Kinzel: Do you think we need to rethink the role of our 14 hospitals in the state, and whether or not Vermont can financially maintain this many hospitals?
Mike Smith: Yeah, I do. And one of the things that obviously is part of the charge for the transformation that AHS (Agency of Human Services) is looking at right now is how to do that, and that doesn't necessarily mean closing down hospitals. It may mean changing their role in some ways, in various places, but I think, as the Oliver Wyman report pointed out, we have a serious problem in this state in terms of trying to finance as many hospitals as we have. And therefore, I think we need to look carefully on how do we sort of reconfigure this health care delivery system — not eliminate it, but how do we reconfigure this health care system in order to make it viable and cost effective.
Bob Kinzel: You mentioned that there's some other states that have the same demographics that Vermont has, but don't suffer the same kind of increase in health care costs. What are they doing that Vermont is not doing?
Mike Smith: Well, I'm going to be looking at that as we move forward. I don't have the silver bullet for you on this one, but it is certainly something that I'm going to look at and understand what they're doing. Maine, for example, may have lower costs than we do. What are they doing differently than we are in Vermont? That's one of the questions I'm going to be looking at as we sort of delve into this as a team. What are other states doing that we're, that we're not doing.
Bob Kinzel: When we talk about costs, we have administrative costs, we have just the cost of providing that care. You wrote a letter that was pretty scathing about the leadership at the UVM Health Network in terms of them getting some pay raises at the same time that they were making some health care cuts. But aren't the administrative costs really just a fraction of the whole?
Mike Smith: Well, they're a part of the whole. I wouldn't say they're a fraction of the whole. They're a part of the whole. Part of my charge is to look at those administrative costs, see where they are. But they are millions of dollars. Administrative costs are millions of dollars. It all depends on how you cost allocate the various costs within the health care system, and that's something we're going to be looking at. There are, perhaps, savings in those administrative costs that could help us, in the cost of delivering health care in the state. I intend to look at it. We intend to look at all costs. There's the delivery of, sort of the health care costs and delivery of the administrative costs as well, and where can we find savings? Where can we be more efficient? Where can we be more effective?
Bob Kinzel: Do you think Vermonters are going to have to accept some realities about their future health care system that might be tough to accept?
Mike Smith: I think what Vermonters really are after is equity across the system in terms of if one state is paying lower, why are they paying lower versus in health care costs versus Vermont. I think that's what Vermonters are looking at.
