Bucking the pushback against federal health care law, Vermont looks to go far beyond it

By The Associated Press
The Washington Post, May 11, 2011

The Census Bureau reported that, in 2007, Vermont ranked sixth in the country in physicians per capita, with 374 per 100,000, versus a national average of 271 per 100,000. And about 90 percent of Vermonters have some form of health insurance already.

But some of those with insurance say it falls far short of what they need.

Heather Loughlin, 42, was working as a vice president at the Sugarbush ski resort when she was diagnosed 2 1/2 years ago with multiple sclerosis. Before long, she found herself no longer able to work and buying insurance with a subsidy from the state under a current program, but with a private insurer.

A thick stack of coverage denial letters later, Loughlin said, she was back living with her parents in Ludlow, who were going into debt in their retirement to help her meet her medical costs.

“It doesn’t matter if you’re paying $300 or $400 a month for insurance,” Loughlin said. “It’s a mirage.” She called the repeated coverage denial letters “mind-boggling and enraging. They just try to wear you down.”

Advocates for changing the system brought hundreds of people with stories like that to hearings and rallies at the Statehouse last year and again this spring.

James Haslam of the Vermont Workers Center, which spearheaded a campaign under the banner “Health Care Is A Human Right,” said the legislation wouldn’t have passed without the grass-roots support.

“If other people want this in their states, they have to start organizing their neighbors,” he said.

The bill indicates that the state would “maximize the receipt of federal funds” to help pay for the new health care system. But Vermont’s prospects of receiving federal money are uncertain amid efforts by Republicans in Congress to chip away at the federal overhaul.

“The big hole in Vermont’s plan has always been its failure to specify a funding source,” said Shawn Shouldice of the National Federation of Independent Business, which opposes the legislation. “The only clearly defined funding element was the federal grant money ... and now that could vanish, as well.”

William Hsiao, a Harvard health care economist and consultant to the drafters of Vermont’s legislation, has called for a payroll tax shared by employers and workers. But lawmakers put off a decision on that, some saying they wanted a way to tax non-wage income to support the program as well.

There are also doubts the bill really will move Vermont toward a genuine single-payer system. It leaves room for people to buy supplemental insurance, and among the big questions is whether workers at IBM and some of the major employers in the state, whose self-insurance systems are regulated under federal law, will be allowed to be absorbed into Vermont’s system.

In a move crucial to the project’s success, backers say, the board will design and administer new cost-control measures, including “global budgeting” for hospitals and other health care providers. Instead of the traditional “fee-for-service” system in which doctors are paid by the patient visit or procedure performed, the new system will be designed to pay for providing necessary health care to a given population.

A senior health researcher at the conservative Heritage Foundation in Washington warned, though, that Vermont may want to be careful in playing with the financial incentives that can influence how health care systems develop over time.

In some other countries, Ed Haislmaier of Heritage said, the sort of “global budgeting” Vermont envisions ends up with less acutely ill patients with longer hospital stays. “Hospitals turn into nursing homes,” he said.

The bill calls for maintaining and expanding the state’s Blueprint for Health program, which is designed to streamline and provide better preventive care to people with chronic conditions like heart disease and diabetes.

Rep. Mark Larson, chairman of the Health Care Committee in the Vermont House and a key architect of the legislation, acknowledged that the bill is really a planning document and that its supporters have much left to prove.

After the House gave the bill final approval 94-49 Thursday, he said, “I think today’s vote reflects people saying, ‘OK, you’ve made your case. Now show me.’”