Editor’s note: This op-ed is by Peter Yankowski, a retired bank president who was deputy insurance commissioner in the Douglas administration. He lives in Rutland Town.
Is achieving the ideals and promises of meaningful health care reform as set forth in Act 48 slipping away or has it already slipped away? It’s time for Gov. Shumlin to tell us.
The governor must come forward with a comprehensive and straightforward report to the people of Vermont on the status of his health care initiative. Emphasis should be on the real prospects of achieving a single payer system, how low-income Vermonters will be served and how medical services are going to be affected as a result of health care expenditure cutting, which seems to constitute a primary strategy for the governor at this time.
On March 27 when her resignation was announced, Green Mountain Care Board Chair Anya Radar Wallack strongly stated that if the health care initiative is to work health care costs must be brought under control. Her message was loud and clear, but what does this mean for health care providers and consumers? Could we see rationing?
No sooner were the words, “need to cut costs,” out of the governor’s mouth when Fletcher Allen came forward with a plan for a $120 million expansion. How in the world does this project possibly fit in with the GMCB’s edict on holding the line on hospital spending to three percent?
Gov. Shumlin recently appeared on the MSNBC ‘s “Morning Joe” and stated that health care costs equal about 20 percent of the Vermont economy and that something needed to be done. He went on to say that Vermont was attacking the problem by moving to reduce health care costs.
The governor went on to say Vermont would be receiving hundreds of millions of dollars from the federal government to pay for its health care program. One has to ask, how secure is the long-term payment of these funds as the federal government is faced with its own set of financial stresses?
No sooner were the words, “need to cut costs,” out of the governor’s mouth when Fletcher Allen came forward with a plan for a $120 million expansion. How in the world does this project possibly fit in with the GMCB’s edict on holding the line on hospital spending to three percent?
Following the Fletcher Allen announcement, a group of Vermont doctors appeared under the golden dome and threaten to sue the GMCB if it moves to regulate physicians’ fees as would be allowed under Act 48. How does this fit into the need to cut costs, keep and attract physicians and all while maintain good medical care customer service?
The ongoings of the Shumlin health care initiative are truly confusing to me and probably most Vermonters. When first touted by the governor, his health care plan was to provide coverage for all, reduce health care costs and reduce health insurance premiums. These noble goals provided the impetus for moving forward.
The State paid $300,000 to Harvard professor William Hsiao to study Vermont’s health care situation. Dr. Hsiao’s report stated that the single-payer system would produce savings of over $500 million in the first year and much more in future years. With this headline in hand, Gov. Shumlin’s thinking was reinforced and he was off to the races to reform health care.
Vermonters heard plenty about the expected savings, but little about the major barriers to reform cited in the Hsiao report that would have to be overcome to enjoy the hoped for savings. These barriers included obtaining waivers from the federal government for Medicare, Medicaid and ERISA authorized benefit plans. The waivers were not received and most, if not all, of the highly touted savings apparently went out the window.
In a Feb. 19, 2012, Times Argus article, Steve Kimball, BISCHA commissioner and the governor’s key legislative man on health care at the time, was cited as saying that the $5 billion in annual health care costs can’t be lowered. And the best to be hoped for was just to have rates increase more modestly. So more than a year ago, the governor knew there was no big savings to be had. This notion was essentially reconfirmed by another $300,000 study conducted by the University of Massachusetts.
With the waivers denied by the federal government coupled with the state waiver allowing companies employing more than 100 people to opt out of Green Mountain Care, the potential number of lives available for the state insurance pool declined to about 110,000. Insurance underwriting practices count on the largest possible pool of lives to adequately spread risk. At this point, the size of the pool, which insurance companies will have to compete for is relatively small increasing the probability of loss risk and resulting in higher administrative cost per live insured, another problem for the Shumlin reform initiative. I assume this same pool of lives will make up the single-payer population.
Additionally, the significance of Anya Radar Wallack’s resignation at this time cannot be discounted. I will take Ms. Wallack at her word that she wants to spend more time with her family. But really, to have the health reform leader bail out after less than two years on the most significant undertaking in Vermont history is difficult to understand. A cynical person might say Ms. Wallack sees the writing on the wall and wants to put space between her reputation and the possibility that reform will not materialize in any form close to what was originally proposed.
Ms. Wallack should be lauded for giving six months notice on her resignation, thus providing the governor adequate time to find a well-qualified replacement. But, instead, he elected to quickly move to appoint a replacement with no real professional health care experience. Additionally, the proposed replacement already has a full-time job, so his ability to dedicate his full energy to the GMCB is compromised. It seems to me the governor would want to find the best available professional in the country to lead an effort to reform 20 percent of the Vermont economy. Why the rush on such an important decision?
This week the governor introduced his commission charged with looking into options for funding the single-payer system. The effort will be lead by David Coates, an outstanding businessman with a sterling reputation. But one has to wonder if the mission is actually a fool’s errand because the available pool of lives to be covered by a single-payer system is too small. Adding to that wonder is the oddity of Gov. Shumlin’s statement at the commission announcement of: “Its not a question of opening the door to something we don’t intend to do.” Why would the governor feel the need to say such a thing?
Given everything that is happening and has happened with health care reform over the past two years, most of which has not been positive, its time for the governor to come forward with a comprehensive report to the people of Vermont.
