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PNHP commentary on the Vermont health reform bill

The Vermont health bill: a brief overview from the single-payer perspective

By Dr. Ida Hellander

This is a two-stage bill which attempts to use the establishment of the required health benefit exchange under PPACA as a bridge to a “public-private single payer health care system” (Green Mountain Care) upon receipt of the required federal waivers. Here are some representative quotes:

“This bill proposes to set forth a strategic plan for creating a single payer and unified health system. It would establish a board …. ; establish a health benefit exchange for Vermont as required under federal health care reform laws; create a public-private single payer health care system to provide coverage for all Vermonters after receipt of federal waivers” (p. 1).

“The intent of the general assembly is to establish the Vermont health benefit exchange in a manner such that it may become the foundation for a single payer system” (p. 5).

“Green Mountain Care shall be implemented upon receipt of a waiver … of the Affordable Care Act. As soon as available under federal law, the secretary of administration shall seek a waiver to allow the state to suspend operation of the Vermont health benefit exchange and to enable Vermont to receive the appropriate federal fund contribution ….” (p. 44).

Comments and concerns

1. The reforms enacted prior to the implementation of single payer are inadequate and delay fundamental reform for 3-6 years. Several states have enacted reforms in the past only to repeal them before full implementation.

2. Provisions necessary for cost-control, such as an annual budget, and separate operating and capital budgets for hospitals, do not appear in the legislation, but do (confusingly) appear in the summary and testimony on the bill by Anya Rader Wallack (summary, p. 3 and testimony, p. 8).

3. The section on pilot projects for payment reform/ACOs appears to allow insurance companies to run ACOs: (p. 15) “the scope of services in any capitated payment should be broad and comprehensive, including prescription drugs, diagnostic services, services received in a hospital, mental health and substance abuse services, and services from a licensed health care practitioner … and may consider “whether to include home health services and long-term care services as part of capitated payments.” Only insurers can bear this much risk, and indeed the three private insurers in Vermont are already involved in developing ACOs.

4. The section on administration allows an insurance company to bid for “administration of certain elements of Green Mountain Care.” This adds unnecessary expense to the program.

5. What will the cost sharing be? (p. 39) “Green Mountain Care shall include cost-sharing and out of pocket limitations as determined by the Vermont health reform board … there shall be a waiver of the cost-sharing requirement for chronic care for individuals participating in chronic care management and for primary and preventive care.” Cost-sharing limits access to care and is ineffective at controlling costs; it should be eliminated.

6. There is no ban on investor-owned health facilities.

7. On the bright side, the single-payer plan includes Medicare and Medicaid (p. 40, 41-42), workers’ compensation and retirees (p.38); covers all “residents” (not just citizens, p. 37); there is at least a nod to the need to have comprehensive benefits including long-term care (if the budget allows); there is language on retraining displaced administrative workers (p. 56); bulk purchasing of drugs and supplies; use of “smart card” technology as in Taiwan (p. 37); and insurance coverage that duplicates the single payer is proscribed (p.41). (This last feature is contradicted, however, by a provision that allows employers to retain their existing coverage.)

8. Some additional features: There is an emphasis on mental health parity and an adequate supply of mental health professionals; emphasis on primary care and use of “medical homes” (this could be good or bad, depending on if they are part of an insurance company-run delivery system).

9. Finally, the bill does not specify financing, except to say that two options will be presented for consideration and all options for raising revenues will be considered (not just a payroll tax, as Dr. William Hsiao had recommended).

Conclusion

Single-payer advocates will have to fight to strengthen the single payer section of this bill, keep single payer in the bill at all (there will likely be attempts to strike it), get the necessary federal waivers and make single payer (aka “Green Mountain Care”) a reality.

Dr. Ida Hellander is executive director of Physicians for a National Health Program.


The Vermont health bill: a brief analysis

By Drs. David Himmelstein and Steffie Woolhandler

The proposed Vermont health reform legislation includes two distinct elements: clear plans to rapidly implement the deeply flawed federal health reform (PPACA) in Vermont; and a vague outline of a single-payer plan that might be implemented six years hence if the feds were to allow it.

In contrast to the bill’s detailed prescription for implementing PPACA, the sections on the single-payer plan leave much to the imagination, punting decisions on critical issues to a board appointed by the governor. It seems that the board is to determine whether critical services like long-term care are included in the benefits package; whether co-payments will be affordable or daunting; how hospitals, home care agencies, nursing homes and doctors will be paid; and whether capital funds are to be allocated separately from operating funds (the sine qua non of effective health planning). And the bill includes no plan for funding the single-payer program.

Happily, the legislation would enroll all Vermont residents (regardless of immigration status) in the single-payer plan. In one critical area the bill seems to come down on both sides of the fence. While it would proscribe the sale of private coverage that duplicates the public plan if the single-payer program is implemented, it would also allow employers to opt out of the plan.

Finally, its uncritical embrace of the latest health policy fad – Accountable Care Organizations (ACOs) – would bolster the role of private insurers, at least in the short run. The bill calls for pilot projects in which an ACO would receive capitation payments which would cover all care for a defined population, including long-term care, prescription drugs, etc. Insurers are the only organizations in Vermont with the financial muscle to take on such “full risk” contracts.

In sum, the Vermont bill evidences good intentions and bold promises, but leaves the make-or-break decisions about restructuring health care financing for a later date. This “kick the can down the road” approach is worrisome in a state where the governor and Legislature change every two years, and where multi-stage health reforms have been enacted in the past, only to see the planned reforms abandoned without being implemented. In this context, ongoing mobilization of a broad-based single-payer movement will be critical. Such a mobilization can bolster the governor’s evident enthusiasm for the single-payer project and maintain the courage of the Legislature as they face the inevitable onslaught of corporate opposition to real health care reform.

Drs. Himmelstein and Woolhandler are co-founders of Physicians for a National Health Program.


The Vermont health bill, H. 202: suggested revisions and clarifications

By Vermont Health Care for All members Dr. Deb Richter, Ethan Parke, Marilyn Mode, Ellen Oxfeld and Marjorie Power

The following suggestions have been submitted to members of the Vermont Legislature.

1. Order of elements in bill: Put single payer at the front of the bill – this is the goal. Make clear that the goal is for Green Mountain Care to be up and running as soon as waivers are attained and that the exchanges (the next part of the bill) are an intermediary step that will last only as long and until waivers are obtained.

2. Emphasis: Need stronger language in the single-payer section that the goal is to attain waivers at the earliest date possible. This will also make more political sense, and it will be easier to and simpler to sell to the public.

3. Board: More support staff will be needed for this board. Think about the Public Service Board that has been operating for decades and all the support staff that they have. The consumer rep on the board will be especially in need of support staff because he/she does not already have an association (such as the hospital association) at his or her disposal to help when an issue comes up.

4. What if the federal law is repealed, amended, defunded, or struck down by the U.S. Supreme Court? It should be made clear that Green Mountain Care is contingent on the federal law only to the extent that it might be federally preempted. If the federal law is repealed or changed in such a way that states have more latitude to innovate, then the bill should make clear that we will move more quickly to Green Mountain Care (since no exchange stage would be necessary). H. 202 should also be clear that if the federal government does not fund states under the federal health reform bill, then Vermont must take immediate steps to create a single-payer system with whatever resources are at hand.

5. Principles: Section on principles at the beginning should include health care as a public good as well as health care as a human right.

6. Global budgets: Hospitals should receive global revenue budgets for cost containment and administrative savings. These revenue budgets are not for capital expansion. Hospital capital budgets should be allocated separately from their global revenue budgets. For instance, all things that will generate ongoing operating expenses, such as monies for a new parking lot or an additional MRI scanner, are part of capital budgets and should be allocated separately.

7. Role of for-profit entities: Although we recognize that there are already some for-profit entities within the Vermont health care system, the bill should consider a future moratorium on any for-profit health entities.