Home

 OUR PLAN | Who We Are | Why We Came Together | Today's Situation |  Governor's Reaction

TennCare program to lose health coverage  |  Governor's Veto Message to H.524 | Polls & Research

Senate Media Highlights  |  Commentary  |  Press Releases  | Articles |  Editorials

Jump to commentary:

What really happened on health care?

Clashing views on health care reform  |  It's My Turn | Universal access, defined benefit are key

House health care plan is too unrealistic  | Health care fight: Cure or poison pill? | Health care's sickening numbers

Admission is first step to recovery | CROSS COUNTRY, Canada South

COMMENTARY

Why every Vermonter should have health insurance

Rutland Herald/Times Argus/Burlington Free Press | November 2, 2005 

At the recent health care summit in Killington called by Gov. Jim Douglas, the Vermont Medical Society announced its support for a requirement that all Vermonters have at least a basic health insurance policy. I'd like to explain why we feel health insurance is so important that it should be mandatory for everyone. 

Time after time, Vermont's physicians are called upon to care for people with advanced illnesses that could have been prevented or better controlled if the problem had been detected earlier. But patients without health insurance tend to put off check-ups or visiting the doctor's office when they first notice symptoms. They later seek care in the hospital emergency department when the problem has become so severe that they cannot manage at home. 

Emergency departments by law cannot turn away uninsured patients or those unable to pay. But by then, the illness is usually more difficult to treat and requires more expensive procedures. Hospitals provide the care, and then pass unpaid costs onto insured patients in the form of higher charges. This is the "cost shift" that you may have heard about. It is costing Vermonters who have health insurance millions of dollars a year. 

If all Vermonters are required to have at least a basic health insurance plan, this cost shift will be greatly reduced for a couple of reasons. Hospitals will no longer have to boost their rates to make up for unpaid care. Patients will no longer delay seeking care, meaning the cost of treatment will be less. 

Everyone wins if everyone is covered. With the cost shift reduced or eliminated, Vermonters will see their insurance rates stabilize. Employers will be able to continue providing insurance benefits for their employees. And people who were previously uninsured will get the care they need without being worried about financial hardship. Quite simply, requiring all Vermonters to have health insurance is the greatest single thing we can do to improve the health system. 

Some people can afford to purchase health insurance, but they choose not to. These people should no longer be allowed to dodge their responsibility. Likewise, approximately 27,000 uninsured Vermonters are eligible for Medicaid, but they have not enrolled. An insurance requirement would encourage everyone to participate in Medicaid who is eligible. 

There are Vermonters who want to buy insurance but cannot afford it. The Vermont Medical Society believes a basic health plan can be developed by an independent commission that provides good preventive, chronic illness and catastrophic coverage at an affordable price. To help Vermonters with lower incomes purchase such insurance, we believe there should be a publicly funded premium subsidy. 

Even if all Vermonters are required to have health insurance, employers should continue to play a very important role in purchasing insurance. We believe employers should receive tax incentives to offer insurance benefits to their employees, and to maintain existing coverage. 

It is time for all Vermonters to do their share in reforming our health care system. With public support, we think this goal can be achieved quickly, it can be done fairly and it will help preserve the benefits of health insurance for everyone. 

Harvey Reich, M.D., is the immediate past president of the Vermont Medical Society and director of critical care medicine and respiratory care at the Rutland Regional Medical Center.

Back to the top

What really happened on health care?

June 29, 2005 | Rutland Herald Commentary

The Legislature has gone home, and things have settled down as Vermont moves into summer, a time of beauty, relaxation and an enjoyable absence of politics for many. The governor vetoed the health care bill passed by both the House and Senate, and it may seem to many that not much was accomplished on the health care front. 

We have to remind ourselves though that the Legislature is a direct extension of the people and that, in fact, very much happened as Vermont continues to wrestle with this major social and economic problem. 

What happened with the health care issue this year goes well beyond the process and content of the bill itself. 

Here's how we read what happened. 

First, the Legislature declared in no uncertain terms that all Vermonters will have access to health care in an organized, cost-effective, and comprehensive manner, and further that controlling the cost of health care is the key to providing universal access and high quality. And the Legislature put in motion (even without the bill) ways to develop information needed to continue moving forward. Like all legislative bills, this one also has its weaknesses, but on balance the Legislature overwhelmingly moved the health care agenda forward. 

But more importantly than what the Legislature did or did not do, Vermonters became engaged in the debate. Whether in countless homes where people gathered to think out loud, or in a goodly number of town meetings, where health care was on the ballot, or in new stirrings as reflected in recent polling, or by an increasing number of thoughtful and informed letters to the editor, or by the columns of the editors themselves, or by the formation of nongovernmental forums on the subject, such as Coalition 21, health care over the course of the year has become the number one issue in Vermont. This year has laid the groundwork very nicely for our next electoral cycle. 

This is good news because the more citizens become engaged in the debate, the sooner the critical mass will emerge that is necessary to develop the political will to do some important things. 

This is one of the most difficult and important issues facing Vermont imaginable. It affects every part of our lives and has moved from being solely a social problem of some number of people needing health care to an economic problem of growing dimensions for our businesses, schools, towns, and families. 

We, the authors of "At the Crossroads: The Future of Health Care in Vermont," make the following predictions. By delaying serious action, we have added three quarters of a billion a year costs to health care by the year 2011, as costs of all health care continue to rise. This means that by the next administration in 2007, the price tag on health care will have jumped from $3.5 billion to $4 billion. By the next administration after that in 2009, the cost will be nearly $5 billion. And by that time, if there is no intervention, we will have more than 100,000 Vermonters without health coverage. That is the equivalent of all of the people in Washington and Lamoille counties not having health care coverage, or the equivalent of two-thirds of the people in Chittenden County. 

This is only an outline of the crisis bearing down on us. The rising uninsured can only accelerate the rise in premium costs to the rest of us. And by not spreading the payment for the cost of health care across all Vermonters, business will continue to carry the burden of costs, thus missing an opportunity to gain a significant business climate edge in Vermont. 

As far as the politics go, Vermonters will soon begin to understand that all they are really looking for in this process is the same health care, financed in the same manner, that the governor enjoys. That realization will be a further impetus in bringing about change, which is inevitable, but which is admittedly difficult and hard won. 

Cornelius Hogan, Dr. Deb Richter and Terry Doran are the authors of "At the Crossroads: The Future of Health Care in Vermont."

Back to the top

Clashing views on health care reform

July 13, 2005 | Rep. Gaye Symington | Rutland Herald Op-ed

The message accompanying the veto of the Green Mountain Health Plan can be boiled down to two underlying themes. One, the governor would like Vermonters to believe the outcome of the Legislature's ongoing work is a forgone conclusion (and he characterizes that conclusion in terms that Vermonters find objectionable). Secondly, the governor and the Legislature define health care reform in fundamentally different terms.

Legislators have determined that if Vermont is to control the skyrocketing cost of health care we must reconfigure a health care system so that it is built around maintaining health, not fixing illness, and so that it is accessible to all Vermonters, regardless of their income or employment status. Prior to passage of H.524, we didn't have a predetermined means of achieving that end, and we are now approaching the challenge with fresh eyes and new analysis. Legislators are willing to consider different approaches to achieving the goal of a coordinated system of care serving all Vermonters.

The governor has simply decided to characterize the Legislature's work as leading to government-controlled rationed health care. He raised this flag with each proposal the Legislature put forward this past year, despite the various changes and accommodations legislators made throughout the winter.

Second, the governor and legislative leaders define the problem with health care in fundamentally different ways. The administration believes that any health care crisis is confined to a limited number of Vermonters who can't afford insurance and to the Medicaid program's deficit. The administration's answer to the lack of insurance is to subsidize a certain kind of insurance for those who don't have it now and who fit a certain income category. Their answer to the Medicaid program deficit is to reduce benefits, cut provider payments, and seek more help from the federal government.

In contrast, legislators define the health care crisis as one that affects all Vermonters because the system's costs are out of control and because, without fundamental restructuring of how we deliver and pay for health care, more Vermonters will lose access to health care. Either they will have no insurance, or they will only be able to afford insurance that doesn't provide access to health care they need when they need it.

Access to health insurance does not assure access to health care. Subsidizing health insurance doesn't get at the underlying costs of the current system. Cutting Medicaid or reducing payments to providers would be likely to result in less health care provided to low-income Vermonters and a greater shift of costs onto those who do have health insurance.

Many Vermonters still have traditional and generous health care insurance. But more and more Vermonters who had thought their health insurance was a reliable term of their employment or retirement are finding that is no longer true. More and more Vermonters have experienced the insecurity of going without health insurance or the risk of being in that position. They no longer feel immune to the risks of continuing with the current system of delivering and paying for health care. And even those with "good insurance" understand they are paying more than they should for this complex system.

Vermonters have asked their political leaders to take this challenge head-on, and they are willing to listen to proposals for change. They know that doing nothing is not an option anymore because the problem is getting worse too fast to permit denial.

A point-by-point response to the governor's veto comments can be found at the speaker's Web site, www.leg.state.vt.us/speaker, following the link to the health care page. Many of the assertions are simply false or discount the Legislature as an independent branch of government that has and will continue to respond to our constituents' challenge to reform Vermont's health care system. Some of the concerns reflect our own questions and will form the subject of ongoing analysis.

Legislative committees and the newly formed legislative commission on health care reform will carry out serious work this summer and fall to continue the work to control health care costs and assure that all Vermonters have access to health care. In an effort to include the Douglas administration as an active participant in these discussions we have taken the unusual step of assigning two seats at the legislative health care reform commission's table to the administration. We are confident Vermonters will appreciate and will fully participate in the discussions and hearings ahead. We invite the governor to do the same.

Rep. Gaye Symington, a Democrat from Jericho, is speaker of the Vermont House.

Back to the top

IT'S MY TURN: NOTHING MODEST ABOUT VT. SENATE HEALTH PLAN
By Charlie Smith

In Sunday's Free Press, the editors support the Senate health plan, twice referring to it as "modest." The same editorial accurately denounces the House plan as moving "the state towards a single payer, government controlled health care system that would cost hundreds of millions, even billions, in new taxes." What the editors fail to see is that the House and Senate plans take different routes to exactly the same bad destination.

Consider the following five facts about the Senate's bill:

1. On Day 1, the Senate would create a government program, funded with a new broad-based payroll tax, and targeting 35,000 uninsured Vermonters of whom 40 percent earn above-average incomes.

2. The notion of "basic coverage" has given way to robust coverage, at least equivalent to the Vermont Health Access Plan (VHAP); as such, the Senate plan is essentially an extension of the deficit-ridden Medicaid program.

3. The Senate explicitly forecasts "expanded services to expanded populations."

4. The Senate explicitly proposes to subsidize the new program with general Vermont tax revenues.

5. The Senate explicitly forecasts that, by 2009, this tax subsidized government program will compete directly with private insurers.

Will the Senate plan still seem modest when the payroll tax rises from 6 percent (3 percent on both employees and employers) to 16 percent or more?

Indeed, what starts as a "modest" plan is destined to grow dramatically in scope and expense.

The Joint Fiscal Office of the Legislature forecasts that the 6 percent payroll tax will yield $40 to $60 million. When services are expanded to the VHAP "comprehensive" care level, upwards of $100 million more will be required for the original 35,000 people. This portends either a major payroll tax increase or a huge infusion of general revenues.

The editorial also ignores the fact that, whether it is 6 percent or 16 percent, a payroll tax is extremely regressive, and will be paid chiefly by the working poor and small businesses. It's bad for jobs; it's bad for the economy. It would double the state's tax rate in the lowest income bracket. It would also reduce the number of entry level and near entry level work opportunities, which give young and lower skilled workers a foothold towards self-sufficiency.

Will the Senate plan still seem modest when state-subsidized competition has forced private insurers out of Vermont, and the government provides -- and rations -- virtually all health coverage?

As you consider the logic of the five points above, recognize that this is the intended and inevitable result. Moreover, with Medicaid as prima facie evidence, there is little to suggest that the state is the best possible operator to succeed with the twin responsibilities of cost control and modern disease management.

By comparison, the governor's plan is truly moderate and sustainable. It provides for a choice of basic coverage plans and allows the private market to provide those plans.

It offers a sliding scale subsidy to the 21,000 lower income Vermonters for whom coverage today is not affordable. It directly addresses the Medicaid cost shift, by raising physician reimbursements. It directly expands the primary care network to under-served areas. It offers a strategy for major public and private investment to transform the delivery of health care over the next five years, which will ultimately bring cost increases under control.

Last, but not least, it offers a "Plan B" when legislators finally realize that, to be sustained, much of the current Medicaid/VHAP program will need to be shifted away from government to private insurance.

It is the governor's plan, in conjunction with cost control measures enumerated in the Free Press' editorial (May 26): chronic disease management, insurance payment reform, improved technology, healthy lifestyles insurance discounts and malpractice reform, on which all seem to agree, that will lead Vermont's health care system to a definitively better place.

Charlie Smith is secretary of administration for Gov. Jim Douglas.

Back to the top

Universal access, defined benefit are key
May 26, 2005 | Rutland Herald Commentary

Following is a letter to Sen. Peter Welch, president pro tempore of the Senate, and House Speaker Gaye Symington by Dr. Mark Novotny, founder of the Northshire Medical Clinic and chief of staff at Southwestern Vermont Medical Center in Bennington:

I am writing to follow-up the brief telephone conversation we shared at the Democratic "meet up" last week. I have significant concerns about the existing legislation for health care reform, while strongly supporting the effort you and others are making to effectively grapple with the current health care financing and access problems.

I work as a practicing physician and as a physician executive, responsible for effective use of the resources of our health system to benefit the communities we serve. This gives me perspective from both "the trenches" and the boardroom. I care for patients in our hospital and our emergency room and serve as a member of our board of trustees and the senior management team.

In all of these roles I am unhappy with the current health care financing system and the access consequences for our citizens. My physician and executive colleagues agree that the current system is seriously flawed, has perverse incentives for providers, and fails too many of our citizens by poorly distributing health care resources.

Universal access is key. You have both set out this principle as core to health care reform, and I agree.

Acknowledging limited resources is also key. People will throw around the word "rationing" regarding any reform process, but we must acknowledge that we ration now but do so by rationing eligibility, and generally according to one's socioeconomic status rather than need.

Vermont providers also struggle with the difficult irony that on a national basis the Vermont health care system in its current format is delivering measurably the best quality in the nation, at nearly the lowest cost. However, because of the extremely low payments from Medicare and Medicaid for this care, the cost shift to commercial payers is so severe that businesses and their employees are punished with paying way more than their fair share into this system.

I do not believe that the reforms outlined in either the House or Senate version will effectively accomplish the goals that I believe the Legislature is looking to accomplish. It seems to me that the goals are to provide benefits to all citizens of Vermont that are most likely to improve their health, within a financing structure that is predictable, budgetable, and efficient. The existing reform bills place the health care system at risk of more rapid failure than leaving things as they are. That is because they are dealing only with the financing of the system, and eligibility. We must start with the focus of looking at an effective benefit package.

To achieve these objectives we need to adopt an explicit policy of universal coverage for a defined basic benefit of effective health services subsidized with public resources. All citizens, regardless of their economic circumstances, should be eligible for a publicly subsidized benefit. And all citizens should contribute to the subsidy. One can think of this as applying the public education model to health care.

We publicly subsidize our schools with general tax revenues to ensure that they are accessible to everyone. There is "universal coverage" for a "basic benefit." The public pays for the same benefit for everyone. Parents who wish to give their children additional opportunities, a "richer benefit," can do so, but the cost of those benefits is not subsidized by the general public.

The current health care reform legislation is not directly addressing the issue of the benefit package. Establishing a global budget, and universal access, without addressing explicitly what benefits will be covered, will lead to disastrous outcomes as the system runs out of money because of unpredicted increases in utilization, driven either by providers or patients. Government then only has the tool of reducing payments to providers (which is where we are with Medicaid payments) or reducing eligibility. These tools are clumsy and lead to negative consequences such as patients not getting care, or providers limiting services that cost them money, or providers leaving altogether.

The current health care system can be run much better, even with the existing dollars, if they were applied more evenly across the population and if a basic benefit package was explicitly defined. In our American culture, people want the flexibility to "purchase" services according to their self-defined needs and ability to pay. I believe we have to acknowledge that fact and let citizens purchase insurance and/or out-of-pocket, above the basic benefit package.

This kind of system had a brief trial in Oregon, although it was only applied to the Medicaid population. It was explicit and effective. We could learn from their experience.

Physicians in Vermont would be much more effective if they had predictable payments for services. Doctors don't think of patients in different buckets of insurance coverage. We think of patients with different kinds of medical problems, and then struggle mightily to bill in the appropriate manner, and with the appropriate forms, to the appropriate insurance company, each with its own rules, and each with a different payment for the same service.

A single payment mechanism with one set of rules for the publicly financed health system would improve efficiency and effectiveness dramatically.

If providers (hospitals and physicians) knew that the publicly funded payment system would respond to funding shortfalls by reducing benefits (according to a priority efficacy list), then they can plan effectively and stay in business. Responding to funding shortfalls by reducing eligibility or payment to providers create enormous secondary problems in poorer health care delivery and outcomes because people don't get the care they need, either because they're not eligible, or their providers are going out of business.

I apologize for the length of this letter. The financing of health care and the organization and delivery of health care is one of the most complex organizational structures in American society. Reform is absolutely necessary but must be done with an understanding of consequences and a commitment to patients and providers that the distribution of resources will be fair.

Back to the top

House health care plan is too unrealistic

May 15, 2005 | By JEANNE KELLER | Rutland Herald

In a commentary that appeared in the May 5 edition of the Sunday Rutland Herald and Times Argus, Con Hogan describes a proposal he believes will lower the cost of health care and deliver to Vermont universal health coverage. He's given this thought and analysis, but consider before adopting these radical changes: Is it realistic? Is this really what Vermonters want and need? 

The House Democrats' proposal, echoed by Hogan, puts in place within three years a system that will be governed by regional community boards, financed through income and payroll taxes. Over this summer, a legislative committee will draft the technicalities to implement the coordination, management and financing of all health care over to regional boards and state agencies. They promise to have the system fully implemented by July 2007. 

The Vermont Initiative for Universal Health Access is a group of organizations that came together to provide another voice in this health care debate, primarily a constructive one. The Initiative agrees with many of the goals outlined by proponents for universal access, but we have a more realistic approach to getting to the finish line. The initiative has been working for several months and has become increasingly concerned by the incredible disconnect between what is going on inside the Statehouse and what is understood outside the Statehouse. 

Every Vermont business and resident will pay taxes for the current legislative program under consideration, regardless of whether they want or need the state plan. The House of Representatives Web site states, "H.524 leaves open the possibility that people may not want to accept the services offered even if they are already paying for them. This might work like public and private schools." In other words, tax everyone, even if you don't use it. 

The Senate bill, we view as "House-Lite" in some respects, but more aggressive in other respects. They propose covering primary care and then adding hospital care as "cost savings" allow. The Senate imposes a 3 percent payroll tax on all businesses and employees immediately. Businesses can later file documentation to obtain a tax refund for proving they have been providing health insurance to their employees. Proponents of this pay or play mechanism say the tax is to cover the uninsured, however, nowhere does it prohibit anyone from canceling their current coverage and move onto the state plan. It is not clear how the unemployed or those without a payroll are taxed. 

Hogan and his proponents argue the Vermont system is costly, complicated and requires integration. But their plan appears complicated, requires upheaval of the entire health care system, and dismantling all current insurance programs, in exchange for the expansion of government and construction of regional governing boards over our health care system. 

It's worrying that these proposals claim to integrate a fragmented financing system, while acknowledging that three programs – Medicare, Medicaid and self-insured employer-sponsored plans – cannot, under federal law, be regulated by Vermont. According to the Department of Banking, Insurance, Securities and Health Care Administration, approximately 70 percent of the money spent to fund Vermont's current system comes from these three sources. The Hogan plan promises reform, but does not and cannot realistically impact 70 percent of the system. 

According to BISHCA, of the 65,000 uninsured in the state, 28,000 are currently eligible for Medicaid or VHAP but choose not to enroll. Another 34,000 are between the ages of 18 and 31 and choose not to prioritize a monetary contribution for health care expenditures. The remaining uninsureds are either between jobs, not participating in an existing employer plan, or perhaps in a waiting period prior to the plans effective date. For this small percentage of Vermonters, the Legislature and Hogan want to turn our current health care system upside down. We suggest a much more targeted approach. 

Is this their grand vision? Certainly. Are the goals ideal? Perhaps. Is it realistic? No! 

We do not believe taxpayers will think this is realistic, particularly when the Legislature hasn't controlled runaway spending in the Medicaid program, all the while underpaying providers. This program has an $80 million deficit and is growing daily. Again, the House of Representatives Web site says we have to change the system if we want to save Medicaid. The reality is that Vermont cannot change the system on its own because 70 percent of the current funding comes from the federal government. If Vermont can't rein in the Medicaid and VHAP benefit package, control utilization or negotiate a better deal with providers, we don't think they will do a better job with your payroll tax dollars. 

The Vermont Initiative for Universal Health Access believes that what Vermonters actually want and need is simpler and more realistic. We propose to provide security of continuous health coverage, at a sustainable level and affordably priced. We believe the goal of reform is for every Vermonter to have that security. 

Our proposal faces reality and tackles what we can control within our state borders. We propose doing a better job with what we have, rather than building something new. We propose specific and immediate steps to improve quality, reduce costs and provide health care security. We put more emphasis on providing appropriate care to patients with chronic diseases, patient safety, and leveraging new information technology to reduce overall system costs. Components of the plan include: 

• Replace the dysfunctional individual insurance market with the Vermont Health Security Plan, a pool where anyone in Vermont can purchase a low-cost "common benefit" plan that covers basic health care needs and protects against catastrophic loss. This plan could easily accommodate subsidies based on need.

• Develop and implement a common electronic claims management system and uniform insurance ID card to streamline and reduce administrative costs in our system.

• Require insurance carriers to provide comparative information on provider costs to consumers.

• Support current efforts in BISCHA to prioritize future health care investments, via the existing regulatory process, to fill gaps in our system and increase coordination.

• Create a grant and loan program to spur provider investments in targeted, proven information technology to integrate and coordinate providers and patients and improve safety in hospitals.

• Fund the Blueprint for Health Chronic Care Initiative and provide incentives for healthy lifestyles for all Vermonters, to lower demand for costly hospital care.

• Implement incentives for providers to improve quality and patient safety, including "pay for performance." Medicare is starting to do this nationwide in hospitals.

• Create a patient safety/medical error reduction program to reduce costs and improve the quality of care in our hospitals.

Jeanne Keller is president of Keller & Fuller, Inc., a public policy research and advocacy consulting firm. For more information, go to www.vtiha.org. 

She has been working on health care system improvement in Vermont and nationwide for 30 years. She lives in Burlington and is president of Keller & Fuller, Inc., a public policy research and advocacy consulting firm.

Back to the top

Vermont Commentary: Health care fight: Cure or poison pill?

May 15, 2005 | By Darren M. Allen | Rutland Herald

The governor says he doesn't need polls to tell him what's right. He doesn't think the biggest issue confronting him and the Legislature — health care — should be politicized. And he bristles at the notion that his administration would be motivated by anything but good public policy.

"I am hoping they'll abandon this partisan approach," Gov. James Douglas said at his weekly press conference, referring to the Democrats and their participation in a collection of house parties on health care sponsored by Democracy for America.

That organization, you'll no doubt recall, is the successor to Howard Dean's Dean for America. Senate President Pro Tem Peter Welch, D-Windsor, and House Speaker Gaye Symington, D-Jericho, were the featured speakers at these parties where 300 or so Vermonters gathered to talk about health care. Their presence so miffed the governor that he felt the need to excoriate them for veering off course.

"We need to rise above partisanship," Douglas said. "Having this partisan activity raises the level of partisan discourse in a very unconstructive way."

The implication is that Douglas is above such "partisan discourse" and the legislative leaders are so mired in it that they can't be trusted to make decisions that are best for Vermont over what is best for the Democratic Party.

Welch and Symington aren't buying it.

"He's talking to Rotary Clubs, he's talking to business groups," Welch said in the way of a response to the governor's criticism of the senator's house partying. "We were invited. And, you know what? We're probably going to be beat up, because there are a lot of folks who don't think we are going far enough."

As to who is politicizing the debate over health care reform, accusations fly in both directions. Douglas claims Welch and other Senate leaders are not taking his latest approach to health care seriously, taking only token testimony from administration officials.

Welch and Sen. James Leddy, D-Chittenden, counter that the governor is only out to score political points. "As we're taking testimony, he's preparing a press release that trashes our plan," Leddy said.

So who's at fault here? First, of course, that politics is part of the process under the Golden Dome is one of those "duh" observations that politicians always seem to make when they want it to appear that such behavior is somehow beneath them.

Second, if any fault is to be laid at any party's feet, it has to be dropped at both.

The Democrats know that on health care reform, they have a populace eager for change. They know that they can exploit the perception that Douglas and Republicans are on the side of insurance companies and hospitals.

And they know that it is a resonant issue that propelled many of them to office in the last election. But Douglas is no stranger to politics, either. After all, you don't survive for more than three decades in elected life without some modicum of political instincts.

And on this front his party is quite masterful at taking those instincts and running with them. After all, the party issues regular and frequent missives that point out the perceived weaknesses, hypocrisy or duplicity of Democratic health care positions.

And the governor, whenever he talks about the more ambitious House health care approach, never fails to mention that it rations care, costs $2 billion, raises taxes and generally won't work.

If you want any better example of politics at its best, look no further than this statement released by the state Republican Party late last week.

"If I came to this press corps, which has been reporting on health care for at least two years, with a plan I claimed can save $250 million a year and give more benefits and more access and no out-of-pocket costs for any Vermonter, and I didn't tell you how I was going to raise the taxes, what would you write the next day?"

Douglas didn't utter those words. Nor did a prominent Republican lawmaker. This is a Dean quote from 1993.

Not bad coming from a party on behalf of a guy who doesn't like politics.

Back to the top

Health care's sickening numbers

May 13, 2005 | By Sen. James Leddy | Barre/Montpelier Times Argus

The numbers keep changing, seemingly all in the wrong direction. We spent $1.4 billion on health care in Vermont in 1993. Twelve years later we expect to spend $3.5 billion, double digit increases on average each and every year.

Five years ago 42,000 Vermonters were uninsured. Today there are 63,000 at a time when Vermont's unemployment rate is among the lowest in the country. More jobs equals more uninsured. What's this all about?

And in another year we'll spend an additional $350,000,000, almost $1,000,000 each and every day, just by doing nothing. Everyone says we've got to do something. But what?

At an absolute minimum, we must immediately adopt a specific plan to control costs. This plan should include earlier diagnosis and better care for those with chronic diseases such as diabetes and heart disease. The revolution in technology, surprisingly, has eluded much of healthcare. This must change in ways which allow real time sharing of medical information between primary care physicians, specialists, hospitals, pharmacies and others involved in the care of patients. We must also consider changing how we pay for care, moving away from a fee-for-service, volume driven system to one, which pays for prevention and wellness care as well as for the treatment of illness. This should include insurance discounts for healthy lifestyles.

The health care sectors increasing in cost at the fastest rate are prescription drugs and administration. Direct marketing of prescription drugs is a major factor, as well as the power of the pharmaceutical industry, which continues to hold us hostage to high prices, with the assistance of our federal government. Vermont should establish a nonprofit pharmacy benefit manager organization to help control costs. We should also adopt a common list of frequently prescribed drugs rather than the scattergun approach of different insurers, each requiring more work by doctors and often higher costs to patients.

And there is no segment of our economy more inefficient than the administration of health care. This is largely the result of multiple payers, a disorganized and incomplete delivery system and a poor use of technology. Any health care reform legislation must address these shortcomings.

This is not to overlook the fundamental need, and I believe obligation, to provide health insurance to every Vermonter, irrespective of age, income, where you work or whether you work. It is simply to say that the goal of universal health care can only be attained if we address these cost factors.

Finally, how do we pay for health care? First, I believe we must accept that in a system of universal health insurance, everyone should pay a fair and equitable share. In many respects everyone is paying something now, although it isn't fair or equitable and not everyone has coverage. For those with insurance, about 16 cents of every premium dollar goes to pay for the care of those who cannot pay. It should also be said that the uninsured are often charged the highest amount when they do get care, especially hospital care, because they have no leverage on the pricing, as insurance companies do.

And for those who oppose a publicly financed health care system, the reality today is that at least 60 percent is paid for by the American taxpayer, albeit in as fragmented and inefficient manner as the system itself. Taxpayers pay for Medicare, Medicaid, the VA system, the military and for government employees at the federal, state, and local level. In Vermont this year taxpayers will pay about $250,000,000 for health insurance for state and municipal employees, as well as teachers (and retirees). This does not include the premiums, co-pays and deductibles paid by the employees and retirees.

This is a snapshot of the issues the Legislature is looking at as we wrestle with this vexing, complex and controversial problem. We simply cannot continue to spend more, and yet we must extend coverage to those without. How do we do it? Please follow the discussion and debate through the media and by going to the Legislature's Web page: www.leg.state.vt.us

When all is said and done, if the outcome is win-lose, all or nothing, then we can be assured of a lose-lose unacceptable continuation of the status quo. That alone, I believe, will motivate all of us.

James Leddy chairs the Senate Health and Welfare Committee.

Back to the top

Admission is first step to recovery
May 8, 2005 | By DON MAYER | Rutland Herald

The health care crisis facing Vermonters is first and foremost a problem of runaway costs.

What the business community must bring to the debate is its experience with managing complex organizations to rein in these costs.

What we do not need is to rehash an irrelevant debate on "free markets" when we are talking about an immediate threat to economic vitality. General Motors spends more on health care per automobile than on steel and is losing ground in the global marketplace.

Some business organizations have tried to frame the current debate as a "private sector" versus "big government" issue. The reality is that a very large proportion of all health care costs are already paid through tax dollars through such programs as Medicaid, Medicare and taxpayer-funded healthcare for public employees.

Presently, state and federal governments are acting primarily to address the "failures" in health care delivery, rather than working with businesses and providers on a vision of how a system could work effectively and efficiently.

That's why Vermont Businesses for Social Responsibility is making a common sense proposal.

If we are honest we will admit that we already have the "rationing," the "bureaucracy," and the "high costs" (in fact the "highest costs" of any nation!) that are offered as an excuse for making no change.

Every other industrialized nation has recognized that health care is a public good – like highways, utilities and education. It is essential to economic growth, but not something businesses should be spending our time administering.

There is a vital role for government to play. As businesses we know how to build intelligent partnerships among providers, consumers and government. We should bring that skill to bear on the current discussion. If we do not bring our insight and creativity, the political process will degenerate and fail us again, and part of the blame will be ours.

Here are the realities that get ignored when the debate turns ideological:

The Medicaid "Gap" to which we have applied band-aids, and for which we are considering more, threatens to be $500 billion by the end of this decade.

Without change the current "Vermont health care bill" of $3.5 billion, dollars we are paying right now, will rise to $5 billion by 2010 (just five years from now).

And, the number of uninsured in Vermont is rising rapidly as Vermonters increasingly are being priced out of needed coverage.

The current health care "non-system" promotes fiscal irresponsibility, costly competition among hospitals, and economic rationing of health care.

In order to survive, businesses are cutting back on coverage and requiring increased employee contributions, and our high-quality Vermont health care delivery system is faltering.

While there has been great speculation and alarm raised about what might happen if House Bill 524 were implemented, there is an astonishing unwillingness on the part of some to acknowledge the truly frightening things that are happening right now.

We know that denial and avoidance are terrible business practice. They are also bad public policy practice.

We know that the failure to define problems clearly, to establish goals and policies to address them and to act decisively leads to a destructive cycle of accusation, blame and mismanagement.

Vermont Businesses for Social Responsibility, which represents 530 businesses providing jobs to more than 30,000 working Vermonters, has proposed a plan that would implement public financing of hospital care for all Vermonters by 2008.

We believe this care should be publicly financed.

If this bold action is taken we can begin to wring cost savings from the system.

We believe a new partnership between hospitals and their communities can be promoted by creative incentive regulation. We support innovations in primary care and prevention, and we want prompt action to control prescription drug prices.

We urge the legislature to pass a strong, comprehensive health care reform package that provides quality, universal coverage and begins to "decouple" health care from employer-sponsored programs.

Encourage your legislators to put such a bill on the governor's desk soon. And urge the governor to sign it. We need to get started!

Don Mayer is chair of Vermont Businesses for Social Responsibility and owner of Small Dog Electronics in Waitsfield.

Back to the top

MEDICARE PAY-FOR-PERFORMANCE DEMONSTRATION SHOWS SIGNIFICANT QUALITY OF CARE IMPROVEMENT AT PARTICIPATING HOSPITALS

By Jeanne Keller | May 6, 2005

Quality of care has improved significantly in hospitals participating in a groundbreaking Medicare pay-for-performance demonstration project, according to preliminary reports from more than 270 participating hospitals on their experience during the project’s first year, Mark B. McClellan, M.D., Ph.D., administrator of the Centers for Medicare & Medicaid Services (CMS), announced today.

 “These early returns demonstrate that using financial incentives to reward better quality patient care works to deliver better care and avoid costly complications for our patients,” Dr. McClellan said.  “We are seeing improvements across the board, regardless of a hospital’s initial performance on the quality measures.”

In a speech to the American Hospital Association’s annual membership meeting today, Dr. McClellan described the results of the preliminary analysis of the Premier Hospital Quality Incentive Demonstration.

 The demonstration tracks hospital performance on a set of 34 widely-accepted measures of processes and outcomes of care for five common clinical conditions.  The 17 measures included in Medicare’s national hospital quality reporting program are a subset of these measures.

 The preliminary analysis shows improvement in all five clinical areas being tracked in the three-year demonstration.  The analysis was done by Premier Inc., whose member hospitals are participants in the demonstration.

The preliminary analysis of first-year performance found median quality scores for hospitals improved: 

• From 90 percent to 93 percent for patients with acute myocardial infarction (heart attack).

• From 86 percent to 90 percent for patients with coronary artery bypass graft.

• From 64 percent to76 percent for patients with heart failure.

• From 85 percent to 91 percent for patients with hip and knee replacement.

• From 70 percent to 80 percent for patients with pneumonia.

 Overall, these conditions account for a substantial portion of Medicare costs.  By achieving improvements in aspects of care that are proven to help patients avoid complications, patients are less likely to require more costly follow-up care for such conditions, and they are more likely to have a better quality of life. Hospitals participating in the project cared for more than 400,000 patients in the five conditions during the first year.

 During the life of the three-year demonstration project, which began in October 2003, Medicare will reward high performers with bonuses totaling $7 million per year for a total of $21 million.   Poorly performing hospitals may face financial penalties in the third year.

 Under the Premier demonstration, a hospital can receive bonuses in its Medicare payments based on how well it meets the quality measures. Hospitals are scored on measures for each condition, and those in the top 10 percent for a given condition will be given a 2 percent bonus on their Medicare payments for that condition.  Hospitals in the second 10 percent will be given a 1 percent bonus.  Hospitals in the remainder of the top 50 percent get recognition for their quality but no bonus.

 At the end of the first year, baselines will be set for the bottom 20 percent and the bottom 10 percent.  These levels remain static, and CMS and Premier expect that all hospitals will be above the baselines by the final year of the demonstration.  If any hospitals are below the 10 percent baseline in the third year of the demonstration, they will get a 2 percent reduction in Medicare payments for the clinical area involved, and those between 20 and 10 percent will get a 1 percent reduction.

 “The preliminary results of this demonstration suggest that limited performance-based payments not only provide real support for Medicare for improving care, but also can lead to better health outcomes for our beneficiaries and lower Medicare costs as well,” Dr. McClellan said.  “For example, there should be fewer unnecessary hospital readmissions if there is better care in the initial patient stay.  But most of all, the patients are going to benefit through better care and better health.”

The project data remain preliminary until CMS completes a rigorous auditing and validation process.  Once that process is completed, hospitals in the top 20 percent in each clinical area will receive the incentive payments from Medicare.  Incentive payments will be paid annually.  CMS expects to make payments for first-year results in September 2005.

Premier, a nationwide alliance of about 1,500 not-for-profit hospital facilities, has conducted site visits with top-performing hospitals to document best practices.  Under the demonstration, the results of the site visits will be shared with other participants and the rest of the health care industry to help achieve further significant improvements.

Back to the top

CROSS COUNTRY | Canada South

By JOHN MCCLAUGHRY | May 5, 2005; Page A15 | Wall Street Journal

CONCORD, Vt. -- The real political news in Vermont has been buried under recent headlines announcing the retirement of Sen. Jim Jeffords: The Vermont House has approved the most radical health care proposal ever to gain majority support in a state legislative chamber.

In its early days in the Union -- after 14 years as an independent republic -- Vermont was a bastion of 18th century radicalism dedicated to principles of "liberty and property." But shaped by the state's traditional town-meeting democracy, succeeding generations of Vermonters tempered this radical individualism. Until recently, however, Vermonters had steadfastly resisted big-government collectivism.

This great leap forward into socialized medicine can be traced to the governorship of Madeleine M. Kunin (1985-90). She was committed to a Canada-style single-payer system. But her plan faded as revenues declined and she ultimately settled for providing health services to needy children age six and under. But the single-payer concept would rise again.

In August 1991, when Gov. Kunin's Republican successor Richard Snelling died in office, part-time lieutenant governor and physician Howard Dean suddenly found himself Vermont's chief executive. Gov. Dean quickly distanced himself from the single-payer idea he had supported, favoring instead something called "regulated multipayer." Translation: Hillarycare.

Gov. Dean convinced the 1992 legislature to create a Health Care Authority to come up with two proposals: a single-payer plan and a regulated multipayer plan. But when it came time for a House vote in 1994, political support for a big-government solution had evaporated. Health care "reform" died ignominiously after a 7-0 vote in the Senate Finance Committee, and the Health Care Authority was abolished in 1996.

From 1995 until late 2004, health care "reform" in Vermont consisted of Gov. Dean's constant expansion of Medicaid to higher income workers, known as the Vermont Health Access Plan. Since the plan's costs rose much faster than the revenues assigned to pay for it, Gov. Dean financed the expansion by progressively underpaying doctors, dentists, hospitals and nursing homes. His successor, moderate Republican Jim Douglas, ruefully announced in his 2005 inaugural address that the state was headed for a $270 million Medicaid shortfall by 2007.

But the new, exceptionally left-wing legislature elected with him was eager to implement their platform pledge of a single-payer health system. House Democrats, with a working majority of 89-60, elected the very liberal Rep. Gaye Symington as speaker.

Rep. John Tracy, chairman of a new committee on health care reform, drove his committee hard to come up with a plan. The eventual bill declared that Vermont had no "clearly defined, integrated health care 'system,'" but instead, a patchwork of programs, inequitably financed, leaving some 60,000 Vermonters without access to care. The proposed solution was universal coverage for "essential" services as defined by legislative committee. The state's 12 hospitals would be subjected to a binding "global budget." Doctors and other providers would be compensated on a "reasonable" and "sufficient" basis, in light of bureaucratically established "cost containment targets." Private health insurance for essential services would be abolished. The new system would be paid for by $2 billion in new payroll and income taxes.

The plan overlooked a few sticky considerations. Many Vermonters go to hospitals in neighboring states: How could those hospitals be forced to accept Vermont's government payment rates? What about sick people migrating into Vermont to gain the benefit of the universal care? How could the state have "single- payer" efficiency when Medicare, Medicaid, and Veterans Administration care existed side by side with "Green Mountain Health"? The final version of the bill, which appeared on the House floor on April 20, didn't settle these questions.

Nonetheless, the House passed the single-payer plan on a vote of 86-58. Gov. Douglas attacked the measure as potentially "devastating to our economy." "They are asking Vermonters to pay more taxes, but get less health care," he said.

The business community largely ignored the problem for the last 10 years. Then, on the eve of House passage of "Green Mountain Health," business organizations finally united in opposition to the single-payer plan, but they still couldn't agree on a strong alternative proposal. The Retailers and Grocers associations came up with a plan whereby the group insurance market would remain the same, but the individual (non-group) market would be converted into a government-run Vermont Health Security Plan. Those not otherwise covered would be required to buy insurance from this plan.

Democratic Senate leader Peter Welch, though a longtime single-payer advocate, quickly sidetracked the radical House proposal. A proposal for more modest reform would avoid a certain veto battle, and the negative fallout for the liberal legislators who strayed beyond what even liberal Vermont voters want. The current Senate version features a new payroll tax to be paid by employers that do not offer health coverage and by their employees. Its price tag is only $40 million, a far cry from the House plan's $2 billion.

Sen. Welch is a likely candidate for governor when Gov. Douglas vacates that office. Many believe that he does not want to be viewed by the business community as the champion of socialized medicine in a future statewide campaign.

All of this would seem to be a tempest in a very small teapot, but for one thing: Over the past 30 years, Vermont, with a liberal majority, a hive of activist left- wing organizations, and a press corps largely hostile to anything smacking of conservatism, has become the nation's premier blue-state testing ground for virtually every imaginable liberal proposal. Putting single-payer health care in place in Vermont would be an enormous breakthrough for the left. This year its advocates are closer to victory than ever before. If they ultimately succeed, the reverberations will be felt from coast to coast.

Mr. McClaughry, a former state senator, is president of the Ethan Allen Institute.

Back to the top

The real issue on health care

May 5, 2005  |  Rutland Herald Commentary

The following testimony was prepared by Cornelius Hogan for the Senate Health and Welfare Committee on May 2.

Thank you for the opportunity to appear. All of Vermont is watching at this point. And the stakes associated with making the best possible set of decisions regarding change to our health care system are great. This is because the wrong or inadequate decisions have the potential of making things even worse and the window to change again may not be open for some years.

Most of my comments, you already know. But the purpose of making them today is to remind us of some of the fundamentals in play.

Strip away the complexities and vagaries, and the real and present issue is the rapidly rising cost of health care. All other issues, including access, are secondary.

Simply put, extraordinary rising cost is contributing to and even causing: 

• An increasing lack of access in the form of a rapidly rising rate of uninsured, from 43,000 just four years ago to 63,000 today, which at this rate will be approaching 100,000 by about 2008.
   

• An uncountable rise in the underinsured highlighted by a shift toward catastrophic and partial insurances.
   

• A movement toward less comprehensive care as business and individuals are being priced out of more desirable and preventative coverage.
   

• Increasing tensions between business and their employees, and related tensions between well-covered teachers, and lesser-covered citizens of our communities.

Rising "taxes" in the broadest sense, as a result of the influence of: 

1) Rising health care costs which show up in our school and property taxes as a result of rising health care costs at the town and school levels. 

2) Income taxes as a result of increasing proportion of health care costs in the public sector. 

3) Higher costs of goods on the shelf as a result of business having to pass on its rising health care costs. 

4) Depressed wages as businesses pay more for health care and try to keep their overall costs of doing business in line. 

5) The rising 60 percent of the visible taxes we pay to fund Medicare and Medicaid and other public programs.

This really is an issue of controlling the future costs of health care, or at least moderating them so that we can bend the curve away from the absolutely unacceptable forecasts if we do nothing. 

There are some ways that at some point we can use to control costs, but that are not available to us to make a noticeable difference in the near future. (And it is important to have an impact in the near future, but for no other reasons than to show ourselves that if we put our mind to it, we can have a noticeable impact on these rising costs.) 

Those future ways include: 

• The popular notion of paying for performance or quality. We have to admit that we don't have the technology, experience, or agreement as to just how to do that. It is an agenda for the future.
   

• Major technology investments that have the promise to bring more efficiency to the fray. However, the experience so far with technology investments leaves us far short of being able to show any system change in the cost rise. We must remember the $29 million technology investment certificate of need approval for Fletcher Allen in 1993, which was sold on the cost-benefit argument that the investment would yield $129 million in avoided cost. The project was botched, and no noticeable savings were realized. Further, we need to recognize that until we have a health care system, that we will be funding the parts of the system, often in a fragmented and piecemeal way. Finally, there is general recognition that the cost of such a system investment for the kind of technology improvements that would yield big results is of a size that is simply beyond us at this point, in the order of magnitude of $100 million.
   

• A chronic care initiative, which will result in better health care and better quality of life for many Vermonters, on the surface, is a good thing to do. But we have to recognize that noticeable cost control related to this kind of initiative is many years away.

These are all good and worthy ideas, but they are ideas that will not in the foreseeable future result in a noticeable bending of the cost curve. 

So what ways are within our means to begin to control the unacceptable rising cost of health care in the foreseeable future, recognizing that any changes made by this Legislature are going to take several years to implement thoughtfully and well, and that with each passing year our health care costs continue to rise at a rate of a quarter of a billion dollars a year today, over $300 million a year by 2008, and almost a half billion a year by 2011, years that are well within our planning horizon? 

The first and most important tool we have at our disposal is simplification of the currently overly complicated system. Universal access to the entire system, or a major part of the system, along with a fundamental common benefit plan along with broader public financing in place of premiums would be the single most effective combination of things we could do to simplify and control the costs of health care in Vermont. 

Second is the idea of formal targeting of what is a reasonab