An independent consulting firm says that over the next five years Vermont and the federal government will shell out more than $427 million to launch and run the state’s new health care-related information technology systems.
The Maine-based contractor BerryDunn also reports that the state will not see “quantifiable savings” within the first “five (or 10) years.”
But Robin Lunge, director of Health Care Reform, says you can’t place a monetary value on the benefits Vermonters will get from these new systems.
“How do you do a return on investment for consumer experience?” she said. “You can’t quantify the consumer experience into dollars and cents … What we’re striving to do, you can’t put a dollar amount on that.”
Under state statute, the administration is required to “obtain an independent expert review” for IT-related activities that cost more than $500,000. BerryDunn was brought in to analyze two IT systems: the state’s new health insurance exchange and the Agency of Human Services’ “integrated eligibility” system.
The exchange, called Vermont Health Connect, will become the sole health insurance marketplace in 2014 for Vermonters buying plans individually or via businesses with 50 or fewer employees. Vermont is one of only 17 states implementing its own exchange, and it is set to open enrollment on Oct. 1. The other IT system will tie together eligibility systems for all human services programs, like 3SquaresVT food benefits, health insurance subsidies, heating assistance and other programs.
The state’s current eligibility and enrollment system for many of its human services programs is called ACCESS. BerryDunn indicates it is appropriate to replace it, writing, “The State’s ACCESS system is built on obsolete software and is not sustainable.”
BerryDunn estimates that by the end of 2018, the state and feds will spend more than $224 million on getting Vermont Health Connect up and running. During that period, the firm also projects the state and feds will spend just shy of $95 million on the new eligibility system and $123 million on staffing and operating expenses for the new systems.
BerryDunn made these calculations based on April data, before the state was awarded $42.7 million in additional federal funding for IT systems. At this point, the feds have given Vermont $168.1 million in grant funding to help launch Vermont’s exchange, and they have promised to provide a 90 percent match for many of the other associated expenses.
“It is a worthwhile investment to make sure that consumers accessing not just health coverage but other services provided by the state can be done in a way that is more user friendly, streamlined and more efficient,” said Mark Larson, commissioner of the Department of Vermont Health Access. “The federal government is making a substantial investment in all of these projects to make the investment by Vermonters very, very modest to achieve those important goals.”
At the beginning of 2015, the state is set to spend $18.4 million a year to run the exchange.
With the expansion of the state’s Medicaid program — from 100 percent to 133 percent of the federal poverty line, and with new federal subsidies for income earners below 400 percent of the federal poverty level — the administration expects Vermonters to bring in more than $400 million in federal dollars for health care assistance.
The state will see “significant intangible benefits,” according to the analysis, such as providing insurance to an additional 6 percent of Vermonters who are currently uninsured. Lunge says the state expects Vermont’s population to move from being 92 to 93 percent insured to 96 to 98 percent insured.
Despite major IT projects that must be completed and new guidelines from the federal government for implementing state-run exchanges, Larson said he is confident the state would be ready to open the exchange on time.
“We really do believe we’re on track for October,” he said.