Single-payer health legislation on the move in Vermont

By Nancy Remsen
Burlington (Vt.) Free Press, March 6, 2011

MONTPELIER, Vt. — By the end of this week, the House HealthCare Committee will vote on a bill that authorizes the building blocks for a future single-payer health care system.

The bill will largely follow the template provided to the Legislature by Gov. Peter Shumlin, who set transformation of health care as a priority for his first term in the state’s top job.

“It is not a vote that we are jumping off a cliff to a single-payer system,” Anya Rader Wallack, Shumlin’s special assistant for health reform, said to assure those worried the administration and Legislature might be moving too fast. “This is a multi-year process. We are proposing we just get on the road toward a system.”

“Single payer we think is where you experience the greatest cost savings and allow people to have the simplest interaction with the health system,” Wallack said. “We think it is worth heading for.”

Shumlin is leading Vermont in the opposite direction of many in Congress — especially in the newly elected House of Representatives that voted to repeal the more modest reforms of the federal Accountable Care Act.

Although Democratic majorities in the Vermont House and Senate are expected to be supportive of the health care bill, it has plenty of opponents inside and outside the Statehouse.

House Republicans, for example, are expected to balk at the provisions that establish Green Mountain Care, the entity that would eventually become a health insurance program for all Vermont residents.

“This drastic change to our health care system will affect every Vermonter, every family, every employer, and every health care provider in this state,” House Republican Leader Turner of Milton warned a week ago.

He appealed to Vermonters to press their representatives to slow down the legislation so dozens of questions could be answered now — before the state commits to a single-payer track.

“With the health care industry at 20 percent of our economy, we have a responsibility to address the details, crunch the numbers, and get it right,” Turner said. “Setting a date of March 11 to get this done is a little aggressive.”

House Health Care Chairman Mark Larson, D- Burlington, countered that “slowing down just subjects Vermonters to rapidly increasing costs.”

“If we lose sight of the crisis in our current system, that can make us think it isn’t essential to act swiftly,” Larson said. He cited the skyrocketing growth in health care spending in recent years. It jumped from $3.9 billion in 2006 to $4.7 billion in 2009 and is projected to hit $5.9 billion in 2010 — a jump of $2 billion in five years.

Larson acknowledged people’s worries about making big changes, but offered his assessment that “Scary is doing nothing.”

Rep. George Till of Jericho is a doctor and a Democrat who, unlike many in his party, has many questions about the pending legislation — starting with the fundamental assertion that health care is too expensive.

As a member of the House Health Care Committee, he will be one of those casting a vote Friday.

“If we had a different industry growing at the rate health care is, that would be really celebrated in the Statehouse,” Till said. “Nonetheless, the general consensus is we can’t afford it. I do want people to just consider that it isn’t like the money is headed off to China or India. That money stays here.”

Wallack, Shumlin’s health reform assistant, countered, “There is a lot of evidence that the cost growth isn’t getting us any benefit.” By benefit, she said she means better health outcomes.

She noted, too, that the growing cost of health care crowds out other spending priorities — at businesses faced with escalating insurance expenses, for individuals socked with bigger premiums and co-payments or in government as it juggles multi-million dollars increases in its subsidized health expenditures and the impact of a recession.

Till worries proposed legislation banks too much on administrative savings from consolidating claims processing and payments, and doesn’t tackle the real cost drivers.

“The administrative savings, I think, are terribly overstated,” he said. A single-payer system in a single state “can’t be a true single-payer system,” he argued.

“The focus on who writes the check is a “What can we do about these?” Till asked.

Larson said the ideal solution to the health cost crisis would curb costs, provide universal access and improve quality.

“We are moving in the direction of the governor’s proposal because it has the most potential for success in all these areas,” Larson said. “I haven’t heard anybody propose anything that would accomplish close to what Gov. Shumlin proposes.”

Wallack said the bill has three components:

• It sets up a mechanism for cost control — the Vermont Health Reform Board.

• It creates a health benefit exchange or marketplace for health insurance as required by the federal health reform law.

• It sets out a work plan to lead the state to a single-payer system that would be known as Green Mountain Care.

House Republicans and other skeptics writing in the blogosphere aren’t ready to make the same leap of faith as Larson.

Republican leader Turner isn’t persuaded to throw out the current system yet. “We have very good health care,” he said. “We don’t want to lose that.”

Till complained that the bill “puts this stake in the ground that we are going to single payer” without spelling out how it would be financed or what the insurance benefit would be. The bill gives the administration until January 2013 to provide the financing plan.

“You can’t have a rational discussion about that right before it is going to happen,” Till said. Wallack said the administration needed more time to research financing.

Larson said the bill will state that Green Mountain Care won’t be implemented until the new board has approved a benefit package, the Legislature and the governor have approved a financing plan and the federal government has granted a waiver.

Vermont’s congressional delegation introduced bills in the U.S. House and Senate to move up the date when waivers could be granted from 2017 as set out in the federal health reform law to 2014. President Barack Obama signaled his support for the date change a week ago during remarks to the National Governors Association.

John O’Kane, manager of governor programs with IBM, spoke for many in the business community when he advised the House Health Care Committee on a recent afternoon to pay attention to the employers’ worries about the potential impacts of “an unfavorable design of a reformed health care system.”

“Private sector for-profit companies operate in highly competitive, global markets where the lack of cost competitiveness can mean extinction,” O’Kane said.

Companies that operate in multiple states want to offer uniform health packages to their workers, O’Kane said. They shouldn’t be forced to abandon company-wide health insurance programs by rules or coercive taxation, he said.

Some providers of health care — doctors and hospitals — worry about the track record of government medical care programs. Medicaid and Medicare both pay less than care costs.

“Within the health care community there is a not a lot of trust government can run things well,” Till said.

Melinda Estes, president and CEO of Fletcher Allen Health Care in Burlington, has lots of questions about how the health care reform board would work. This board will make decisions affecting hospital budgets and provider reimbursements.

Estes rattled off a list of concerns such as whether the board would have staff with expertise on technical topics? What would its relationship be to the Legislature which would have authority over the dollars for a government-financed health care system?

She also voiced concerns about the effect of the big change on the state’s ability to recruit and retain physicians. “Physicians are a notoriously risk averse lot,” she said.

She also wondered whether a single-payer system would result in “an in-migration of the sickest of the sick. I don’t know the answer, but it is something we have thought about.”

Despite concerns, Estes said, “both the administration and the Legislature have been very open and willing to listen.”

There are lots of reasons why a single-payer health care initiative would be on a fast-track this year.

The obvious political explanation is the election of a governor who made the issue a priority and sympathetic majorities in the House and Senate.

There are the bundles of federal dollars that come with the federal health care reform law — money that Wallack acknowledged would make it easier to carry out reforms. For example, the state will be eligible for a 90 percent federal match on money used to upgrade its Medicaid systems. “That will be hundreds of millions of dollars,” Wallack said.

Vermont’s community sensibility makes the tough discussions easier, Wallack said. “There are other opportunities because Vermont is Vermont and we have a health care system that isn’t highly competitive and isn’t influenced by the kind of money in other states.”

Many interest groups “are working with us. They are making suggestions,” Wallack said.

Although the bill still has many hurdles yet to clear in the Legislature, Wallack said she was optimistic. “I think we will get something good out of this.”