A Vermont health care organization working to keep patients healthier while reducing costs is being closely watched because of its rate of success it had within 1% of meeting its financial target in its first year.

Last year, OneCare Vermont covered about 24,000 Medicaid patients and now covers about 112,000 patients whose health care is provided through Medicare, Medicaid, and commercial insurance.

The long-term goal is to expand it so that about 70% of health care services provided in Vermont are covered by the system, which encourages patients to stay healthier using specialized care, such as helping them manage chronic conditions like diabetes, so they don't wind up needing more expensive treatment. Officials consider 70% a realistic goal.

Twelve states have Medicaid programs using variations of the model being used in Vermont, and another nine are planning them, said John McDonough, a health care policy expert at the Harvard T.H. Chan School of Public Health.

"Vermont's is an important and watched experiment among state health policy experts," said McDonough, who noted the state's effort is being discussed in healthcare journals, at conferences, and among experts. He called being within 1% of the financial target "an impressive and important achievement."

OneCare Vermont

In a switch from when providers were paid for each service performed, providers are allocated a set amount of money to cover the people in the program. This year, $580 million has been earmarked to OneCare Vermont, an organization of health care providers tasked by the state with carrying out the spirit of the program.

Toni Potvin, 57, of Northfield, Vermont, who has used alcohol excessively on and off throughout her life, has worked closely in recent years with her doctor and a social worker who helps her manage her care, even to the point of ensuring she has ridden to appointments.

Beside from warding off expensive hospital stays or emergency room visits, insurers say this approach cuts down on the overuse of care that happens when insurers pay a fee for each service a doctor or hospital performs.

Over time, they hope the approach helps rein in medical expenses that regularly outpace inflation. During the first year of Vermont's program, 2017, about $82 million in Medicaid spending was allocated for the 24,000 people in the program, said Vicki Loner, the vice president and chief operating officer of OneCare Vermont.

"Right now it looks like we are within 1% of meeting those total targets, and it could be 1% in either direction," Loner said. "I think that for all intents and purposes, for me that's pretty spot on."