[T]he state has moved closer to a deal with the federal government to drastically change Vermont’s health care system, Gov. Peter Shumlin said Monday alongside health care reform leaders.
The draft terms would be a contract between the state and the federal government. The proposal is often called an all-payer waiver, because it lets the state avoid following certain sections of federal law so it can set up an all-payer model of health care.
The Green Mountain Care Board had expected to present the draft terms last year, then postponed it until the first two weeks of January.
“We’re proposing to Washington that we be the first state that takes all of our payment systems — Medicare, Medicaid and private pay, so all three — and changes to a, what we’re calling, ‘all-payer model,’ where we pay our docs and our nurses and our health care providers for keeping us healthy, not for the fee-for-service system that we currently have,” Shumlin said.
“So instead of paying for every test and every procedure, doctors and hospitals would receive a set of payments for frankly keeping us alive and healthy and feeling good,” he said. “Obviously that puts huge priority on preventive care, on eating right, on exercising, on getting off the smokes, on doing all of the things that we know we should be doing.”
The fee-for-service model pays doctors and hospitals for the services they provide, whether or not their patients get healthier. Shumlin said the model started more than 50 years ago, when Americans weren’t living as long and doctors could make a person better with one visit, rather than a series of visits and tests.
He called the rising cost of health care “public enemy No. 1” for driving up the cost of living and laid part of the blame on fee-for-service payment.
Proposed deal
Under the draft terms, the state would coordinate commercial insurance payment systems with Medicaid.
The federal government would allow the federal Medicare program to participate in the system. That would require the federal government to waive some of Medicare’s complex payment terms. Medicare patients would keep their coverage and have the freedom to see any doctor they choose.
The state would seek only to increase Medicare benefits. The state proposes to allow Medicare patients to participate in an opiate addiction treatment program called hub and spoke, and to allow Medicare to continue participating in the primary care health reform program called Blueprint For Health.
The state would propose to expand a program called Support and Services at Home, which is designed to deliver home care to senior citizens and keep them out of hospitals.
The state proposes to keep the growth in non-Medicare health care spending at 3.5 percent to 4.3 percent for five years. The state would promise to make Medicare spending grow more slowly in Vermont than spending is growing nationally.
The federal government would give the state the power to set how much doctors and hospitals are paid, but the state would not use that power in the short term. A single accountable care organization — an intermediary between doctors and insurance companies that helps doctors work together to lower the cost of care — may set those rates.
The state would commit to three population health goals: increasing Vermonters’ access to family doctors, reducing the prevalence of chronic diseases, and addressing the substance abuse crisis.
The life span of the deal would be five years.
The state and federal governments could easily exit the agreement.
Role of doctors
Al Gobeille, the chairman of the Green Mountain Care Board, said the fee-for-service system is currently hurting independent doctors, who are so squeezed for money that they can’t always make time for hourlong visits with their patients.
Gobeille has also called parts of this deal a “transformative care model” that he wants to encourage doctors to join, rather than penalizing them for not joining. “This has to be provider-led and provider-driven,” he said. “You don’t want me doing this.”
Because the all-payer model rewards doctors for healthy outcomes, that means the accountable care organization and the doctors who join it would take on some risk for the health of their patients. Under the current model, insurance companies absorb almost all of that risk.
Gobeille said there are three ACOs in Vermont now and that he has no intention of deciding whether they will merge into a single ACO or one will rise up above the rest to take on additional duties.
OneCare, which is owned by the University of Vermont Medical Center and Dartmouth-Hitchcock Medical Center, is the biggest. Gobeille said it has applied to the federal government for a waiver that would allow it to do the same kind of things that the state is seeking to do through the all-payer model.
With regard to reform in general, Gobeille said the average family of four is paying a lot for health insurance and that the amount could go up dramatically without reform. He said the current wage-cost for a single person to buy a platinum plan on Vermont Health Connect is $11.52 an hour.
“When you think about minimum wage, when you think about a livable wage, that’s an incredible number,” Gobeille said. “That number was half in 2005 when I bought health insurance in my company, and by 2025, if we do nothing, that number could easily be doubled.”
“That’s something that we all have to make sure doesn’t happen, because pay does not rise at the same hyperinflationary rate as health care,” he said.
Although the Green Mountain Care Board, which currently regulates health insurance rates and hospital budgets, is completely independent, it has been working with the Shumlin administration for about a year to negotiate the agreement. The Legislature directed the two parties to work together in Act 54, which passed at the end of the 2015 session.
“It’s important to note that none of this is set in stone, that it can all be changed, and that what we wish for is a transparent, thoughtful process where we invite everybody to help us make this even better,” Shumlin said.
Gobeille invited the public to attend an all-day meeting Thursday at the board’s offices in Montpelier. “This thing will be thoroughly vetted, and input is what we’re seeking,” he said.
Links to the details of this draft deal are on the front page of gmcboard.vermont.gov.
