Gov. Peter Shumlin on Tuesday called for a third-party review of the troubled Vermont Health Connect rollout, but critics say they worry the investigation might lack teeth.
An independent reviewer, to be chosen by the administration from a list of “preferred vendors,” will look at how the state can change its approach, staffing and management structures to avoid the same mistakes on future projects, Shumlin said.
The review was prompted by a series of technical glitches plaguing the state’s online health insurance market since its launch Oct. 1.
The governor referred lawmakers’ questions about who would conduct the review to Department of Vermont Health Access Commissioner Mark Larson, who told lawmakers the state is still in the selection process.
DHVA has issued a work request to a list of preferred vendors — contractors with whom the state has a pre-existing relationship, Larson said Tuesday when called before the House Health Care Committee.
That raised red flags for some members of the committee.
Rep. Douglas Gage, R-Rutland, said he believes that hiring from the pool of preferred vendors to review the rollout would compromise the integrity of the process.
“Independent to me is someone that’s going to show us the good, bad and the ugly,” said Rep. Mary Morrissey, R-Bennington, who also expressed concerns about the review.
“It’s basically letting the fox watch the henhouse,” added Darcie Johnston of the group Vermonters for Health Care Freedom, which has been critical of Vermont Health Connect.
CGI, the Canadian tech firm contracted to build the exchange website, was also a preferred vendor, Johnston said.
While she’s pleased there will be an independent review, she said she was disappointed that Shumlin didn’t seek input from lawmakers on who should conduct the review.
Shouldering the blame
In a rare appearance before the House and Senate health care committees, Shumlin took full responsibility for the rocky rollout of Vermont’s health care exchange, but said it won’t affect the state’s movement toward a publicly funded universal health care system.
“No one is more disappointed than I am that we fell short in our rollout of the exchange, and I take responsibility for those failures,” Shumlin said. He later added that he has never been more committed to “ushering in America’s first universal affordable publicly financed health care system right here in Vermont.”
While shouldering responsibility for the rollout, Shumlin saved some of the blame for CGI, saying “the contractors we hired to build it have underperformed at every turn.”
The last time a governor came to give testimony before a legislative committee was during the tenure of Gov. Howard Dean, and it happened to be on the same topic, according to Rep. Michael Fisher, D-Lincoln.
Shumlin also announced Tuesday that the Agency of Commerce and Community Development Secretary Lawrence Miller would assist the Department of Vermont Health Access with the rollout effort over the next three months to see the state through the sign-up extension and the end of the federal open enrollment period, both of which are March 31.
He also laid out his four-part vision for what the Legislature’s role would be during the 2014 session:
• Work with the administration and other stakeholders to examine the cost and consequences of Vermont’s current health care system and recommit to achieving single-payer.
• Become experts on the ongoing efforts for cost containment and reform, and share that knowledge with the public.
• Facilitate discussion around a universal benefits package that meets Vermonters’ needs.
• Start developing a financing plan that will allow the shift from “health care premiums” to a “publicly financed system based on one’s ability to pay.”
Miller tapped to help with rollout
In explaining the decision to have Miller help oversee the continued rollout, Shumlin said that Larson, who has a good working relationship with Miller, requested his help because as the session gets underway, Larson will be called upon to spend more time at the Statehouse.
“Frankly, until I was governor, I didn’t appreciate how much time (lawmakers) ask of commissioners and secretaries,” Shumlin said.
Larson said he is not expecting new positions to be created as a result of Miller’s involvement.
“This is an example of drawing from within,” Larson said, noting that collaboration within the administration is nothing new and his department has worked closely with Miller’s department as well as the departments of Financial Regulation and Information and Innovation.
Miller will call on his staff to participate as needed, he said.
Pulling Miller in to work on the exchange solves one problem by creating another, Johnston said.
“We’re pleased to see the governor has taken our suggestion (to hire a project manager for the exchange),” Johnston said. “We don’t think Miller is the right person. We have, essentially, an economic development war on our western border with New York, and now we have no one at the helm.”
Larson gave an update on the exchange’s progress, and the committee gave him a laundry list of concerns to address when he is back before them Wednesday.
Rebuilding trust
In reaffirming his commitment to single-payer, Shumlin acknowledged his administration had work to do in rebuilding public trust in its “ability to do health care right.”
But he reminded the audience that the Affordable Care Act was a product of Washington compromise and not the state’s vision of health care reform.
“Vermonters know health care reform is much more than a website. We also know that it’s much more than the Affordable Care Act,” Shumlin said, adding that President Barack Obama once told him the ACA wasn’t what he had hoped it would be, either, and called on states to be the laboratory for innovative change.
Presented with the ACA, Vermont had two choices, Shumlin said. The state could hitch its cart to the dysfunction of the federal government or “choose to take hold of our own fate.” Vermont chose the latter.
More than 50,000 Vermonters have health care that offers universal benefits, and another 30,000 saw their premiums slashed to zero due to Medicaid expansion, Shumlin said. But despite those improvements, the present health care system has fundamental problems.
Gage had a different assessment of the new health care system’s impact. Two of the primary goals set out in Act 48 were to lower the cost of health care and cover more people. “I think we’ve failed in both,” Gage said.
The state has spent $100 million on the IT portion of the exchange, which he pointed out still lacks an online payment option. In addition, the exchange will cost an estimated $15 million this year and $24 million the following year, he said.
“And that’s before a dime is even spent on premiums,” Gage added. “I’ve never known the government to do anything more efficiently (than private sector), and this is proving me right.”
‘Can’t afford to wait’
Shumlin acknowledged that the rollout has given critics of reform plenty of ammunition.
“When Vermonters ask why we should continue to press for health care reform after three months of frustration … my answer to them is a simple one: We cannot afford our current system, and therefore we cannot afford to wait,” he said.
He struck that same theme as he described the current system’s woes and the need for reform.
Shumlin described that system as a “teetering patchwork” of payers, providers and consumers with high costs and poor outcomes that creates incentives that reward volume over good health.
“We can’t afford to wait because there’s currently nearly zero transparency in the cost of medical procedures,” he said.
Among the other reasons Vermont cannot wait, he said, is that the U.S. is paying twice as much as other developed nations for worse outcomes and at the same time not everyone is covered. Reimbursement rates for providers are often inadequate and unfair, and businesses and individuals cannot cover rising premium costs, Shumlin said.
Shumlin acknowledged there is difficult work ahead and promised that “we will not hit ‘Send’ on a new system unless we can assure ourselves that it will be sustainable, bend the cost curve and help create jobs.”
Many of the priorities he laid out for the Legislature this session are focused on realizing those goals, but he praised what the Green Mountain Care Board is already doing to bring about reforms.
Bending the cost curve
Al Gobeille, the board’s chair, who spoke to the joint committees after the governor, said he hoped to work with lawmakers and keep them informed of the board’s progress.
He said the partnerships — between government, providers, business and consumers — were crucial to developing the integrated system that could improve delivery and bend the cost curve.
The hospital budgeting process, the growth of federally qualified health centers and the fact the health care costs rose at a slower rate in Vermont than nationally are examples of what can be achieved through collaboration, Gobeille said.
Health care costs grew nationally at 3.7 percent in 2012, but in Vermont the rate was 2.7 percent, according to Gobeille.
“We must rely on our partners throughout the care continuum to turn these ideas into the system that we all desire,” Gobeille said.
Deborah Richter, with Vermont Health Care for All, a major supporter of single-payer, said it was good to hear the governor double-down on his commitment to universal health care.
“I’m confident it’s real and it’s happening,” she said.
Shumlin’s comments were also a reminder that the Legislature’s next step is to come up with a financing plan for the new system.
“This isn’t something that can be instantly produced next year, it’s something that we have to work on this session, over the summer into the fall so we’re ready to go in January,” she said.
Shawn Shouldice, Vermont director for the National Federation of Independent Business, praised the governor for acknowledging difficulties with the rollout, but said Shumlin failed to present a clear path forward, especially when it comes to the funding mechanism for single-payer.
“(Shumlin) has said previously that he favors a massive payroll tax on employers, including small businesses,” Shouldice said in a statement. “(Tuesday), however, he insisted the new system will create jobs and grow the economy. Those two ideas seem incompatible to small business owners who create the large majority of jobs in Vermont.”
Speculating on how the state will eventually decide to pay for the system, Richter said, “We’re going to have to look at some form of payroll tax, but that doesn’t have to be the sole funder of the health care system.”
Some lawmakers have discussed an income tax in addition to a payroll tax to ensure there is equity in who’s paying for health care.
Equity and progressivity were themes the governor and other reform-minded lawmakers have struck when talking about the payment structure.
As Sen. Claire Ayer, D-Addison, who chairs the Senate Health Care and Welfare Committee, has said, her goal is that everyone pays.
Editor’s note: This article was updated at 8:46 p.m. Tuesday.
