Single-payer plan prompts docs to bargain with the state on reforms

By Alan Panebaker
VTDigger, November 14, 2011

In reaction to the Shumlin administration’s push for a single-payer style health care system, doctors have resuscitated a bargaining group that will represent the interests of physicians.

The Green Mountain Care board is developing plans for reforms that will likely have an impact on doctors’ earning power, and members of the Vermont Medical Society are worried about their future compensation and working conditions.

At the Society’s annual meeting last month, members voted to reconvene a bargaining group called the Physician Policy Council that was originally formed in the 1990s.

Unlike a union, where employees negotiate with their employer for fair wages and benefits, the council will bargain directly with the state as it creates a benefits package for all Vermonters and possibly implements a “single pipe” payment mechanism for health care providers as part of a reform effort that would set the stage for a universal health care system. Payment reform plans will likely result in a uniform pricing system for physician care.

Paul Harrington, executive director of the Vermont Medical Society, told the Vermont Press Bureau last week that the group’s aim was to provide the Green Mountain Care Board with the “best information possible reflecting the experiences of Vermont physicians.”

The vast majority of physicians working for Fletcher Allen Health Care, the state’s largest health care provider, are members of the Vermont Medical Society, according to Mike Noble, a spokesman for Fletcher Allen.

The commissioner of the Vermont Department of Banking, Insurance, Securities and Health Care Administration will need to approve the group’s status under the agency’s regulations.

Madeleine Mongan, vice president for policy with the Vermont Medical Society, said the organization formed a bargaining group in 1994 when the law first allowed health care provider bargaining groups to negotiate with the state regarding provider regulation, reimbursement and quality of health care.

Physicians say the purpose of a collective bargaining group is to ensure doctors can talk to each other and negotiate with the state without running afoul of antitrust laws, which are designed to promote or maintain market competition by regulating anti-competitive conduct by companies, essentially prohibiting monopolies.

Dr. Paul Reiss, a family practitioner in Williston, said the original idea of allowing a collective bargaining group was to permit doctors to negotiate and discuss rates with each other in anticipation of more control by the state over setting rates for plans like Medicaid and Catamount Health.

“It will be very important if there’s limited options for physicians to contract; physicians naturally will have to have the ability to talk to each other in terms of the fee schedules that the board comes up with,” Reiss said.

Essentially, this is what happens in Canadian provinces with single-payer systems, Reiss explained. Physicians and other health care providers bargain for rates of compensation. In a single-payer system, one entity, run by the government, would collect all health care fees and pay out all health care costs. Although Vermont’s health care reform bill, Act 48, does not specifically use the words “single-payer,” it permits an appointed board to develop a payment system to move away from a “fee-for-service” model and toward an alternative method of compensation.

Reiss said, “The payer will control the flow of all health care dollars essentially.”

The payer would effectively be the state, and doctors would be subject to the reimbursement rates it sets. Reiss said other organizations can and probably will apply to be recognized as a bargaining group. For example, the group Healthfirst, which works to promote independent health care practices, will likely want the ability to bargain as well. Reiss is vice-chair of that organization’s board of directors.

Jim Daily, CEO of Porter Medical Center in Middlebury, said physician participation in reform is a good thing.

“For us collectively to solve health care problems takes as many people pulling together as possible,” Daily said.

The Vermont Association of Hospitals and Health Systems will be working on budget issues and payment reform as well, Daily said.

Act 48 includes a reference to the statute allowing bargaining groups in its definition of “payment reform.” The Green Mountain Care Board will spearhead the effort to shift payment for health care providers away from a “fee-for-service” model where providers receive compensation for each separate service.

One option, called “bundling,” compensates physicians and hospitals for “episodes” of care. For example, a provider could receive payment for an entire surgery rather than separate payments for individual visits, MRIs, and the actual procedure.

The idea is to reduce costs by discouraging unnecessary care and encouraging coordination. Proponents of the idea say it will improve overall quality of care.

Anya Rader Wallack, chair of the Green Mountain Care Board, said the bargaining council will give physicians a vehicle for negotiating fair compensation.

The question is, “how do we change reimbursement and make it fair?” Wallack says.

She said there appears to be some nervousness in the specialty medical community (physicians who practice in a specific area like orthopedics) about what the plan means for them. Critics of the federal efforts to reform health care have said an expansion of access to care for more patients could result in decreases in pay for highly-compensated specialists.

Wallack said the board welcomes the input. “It’s the state discussing with providers fair, adequate, value-based compensation,” she said.