Health Care

Health care spending for Vermonters exceeds $6 billion

Total spending on Vermonters’ health care surpassed the $6 billion mark in 2017, but the rate at which that number is growing slowed.

Those are two findings in a new health care expenditure analysis released by the Green Mountain Care Board.

The report shows that health care remains a huge chunk of the economy – 18.5% of the gross state product. But that number ticked downward in 2017, and that’s a bright spot for care board Chair Kevin Mullin.

Kevin Mullin

Kevin Mullin, chair of the Green Mountain Care Board. File photo by Erin Mansfield/VTDigger

“It leads us to believe that we’re moving in the right direction,” Mullin said. “A lot more work to do, but at least some positive signs.”

The board’s annual analysis tracks health care expenditures in two ways.

First, it measures the amount spent on health care services for Vermont residents, whether they received that care in state or out of state. For 2017 – the latest year tracked by the analysis – that number was $6.03 billion.

Expenditures for Vermont residents grew 1.7% from the year prior. That rate represents a significant improvement from recent years, as spending grew an average of 3.2% annually from 2012-2017.

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Also, Vermont’s 2017 spending growth was far below the national growth of 3.8%.

Mullin saw positives in Vermont’s relatively low growth in health care spending. He said he believes the care board’s regulatory actions on hospital budgets and insurance rates has played a role in controlling costs.

He also noted that per-person health care spending was $9,667 for Vermonters in 2017, compared with $10,229 nationally.

“I think there’s good news,” Mullin said. “That doesn’t mean that there’s any laurels to rest on.”

That’s because health care spending is still trending upward. And given the size of the industry, even small increases mean big money.

For example, total spending on Vermonters’ health care is up $891 million since 2012. Even with the relatively small increase from 2016 to 2017, spending still jumped by more than $100 million.

“While it’s great to see a trend that’s looking better, these are still really concerning numbers,” said Mike Fisher, the state’s chief health care advocate.

Per-capita costs are another example: While health care spending per Vermonter consistently has been lower than per capita spending nationally, both numbers are rising every year.

Fisher also took note of the fact that out-of-pocket spending on Vermont residents’ health care continues to go up. That figure, which includes deductibles and co-insurance, was $776 million in 2017 – a 1.8% increase from the previous year.

Out-of-pocket expenses also were a concern raised in a recent state health insurance survey, which found a low number of uninsured but a rising number of “underinsured” residents. About 36% of Vermonters under age 65 don’t have insurance policies that can adequately cover their needs based on their income, that survey found.

“That scenario is the worst case for the consumer who spends a lot on their premiums and still can’t afford to get the care they need,” Fisher said.

Mike Fisher

Mike Fisher, the chief health care advocate for Vermont Legal Aid, testifies in front of the Legislature in 2017. File photo by Erin Mansfield/VTDigger

The care board’s new analysis also tracks health care expenditures in another way – the total spending for all health care services provided in Vermont, regardless of whether the patient was a resident or not.

By that measure, Vermont provider revenue was $6.24 billion in 2017 – up $197 million, or 3.3%, from the year before. That was similar to the average annual 3.8% growth reported from 2012-2017.

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Since 2012, Vermont health care provider revenue has grown by about $1 billion. And hospitals account for a significant portion of that revenue – $2.9 billion in 2017, dwarfing any other type of provider.

However, recent care board documents show that hospital expenses are rising faster than revenues. As a result, a majority of Vermont hospitals lost money on operations in fiscal year 2018.

In response to those budget struggles, the care board is holding a panel discussion at 9 a.m. Wednesday in the Pavilion Building auditorium on the “opportunities and challenges” rural hospitals are facing in Vermont and nationally.

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Mike Faher

About Mike

Mike Faher reports on health care and Vermont Yankee for VTDigger. Faher has worked as a daily newspaper journalist for 19 years, most recently as lead reporter at the Brattleboro Reformer where he covered several towns and schools as well as the Vermont Legislature and Windham Superior Court. He previously worked for 13 years in his native Pennsylvania at The Johnstown Tribune-Democrat.

Email: [email protected]

Follow Mike on Twitter @MikeFaher

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