Editor’s note: This commentary is by former Gov. Howard Dean, a physician who was governor of Vermont from 1991 to 2003.
[R]ecently, Vermont gubernatorial candidates discussed the challenges of Vermont’s health care system. Like most of the country, the rising cost of health care is weighing down our economy. There certainly are hurdles that we need to get over, but we cannot go backwards when it comes to taking care of Vermonters. Although I like Phil Scott as a person and I have voted for him in the past, I am troubled by his misunderstanding of the way Vermont’s health care system and our budgets work.
First, Phil criticized the high administrative costs and compared them to the costs of Blue Cross/Blue Shield’s saying their costs were half of the state’s. As governor, I tried to “privatize” Medicaid in the 1990s. Blue Cross ran it for three years. At the end of the contract we could not renew because BCBS costs were about TWICE the cost of the state doing it. The state of Vermont’s share of overhead and administrative cost of Medicaid is about 4 percent, not 15 percent. I have no idea where Phil gets his numbers.
Medicaid doesn’t pay the full rate, but uncompensated care pays zero!
During the forum, Phil referred to the high number of Vermonters on Medicaid as “Nothing to celebrate. That’s worse than the canary in the mineshaft.” Again he is wrong. The fact that our percentage of Medicaid recipients is high is a very good thing. That started with Dr. Dynasaur and a waiver from President Bill Clinton. The only reason we have had the highest percentage of children and the second highest percentage of adults with health insurance for the last 20 years is because we use Medicaid extensively to make health insurance available to all Vermonters under 18 years old, and for many adults who would otherwise be without insurance.
About 55 percent of our Medicaid money comes from the feds. This is bringing Vermonters federal tax money back home. We also use a lot of Medicaid in special education and other related programs, which helps keep property taxes down because over half the cost is paid by the federal government.
If South Carolina, for example, had our Medicaid program, their entire gross state product would be 2 percent higher because of the additional federal money coming in.
If we did not have so many Vermonters on Medicaid, we would be sicker as a state. The hospitals complain about the cost shift, but some are making money far in excess of their targets. The real problem is that the state of Vermont needs to get away from fee for service medicine in order to control costs. Without Medicaid, the cost shift would be greater because our uncompensated care bills would be enormous. Medicaid doesn’t pay the full rate, but uncompensated care pays zero!
Phil Scott is a good guy, but I am shocked by his statements about health care that are simply untrue. If he were to act on them as governor, our financial situation as a state would be far worse off, and so would the health care of many Vermonters.
