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What’s driving the health-care rate increases?

‘I think it’s going to get worse before it gets better,’ says a former Green Mountain Care Board member, who takes the long view of a system in transition

BRATTLEBORO—Vermont’s health care system is in flux. The state’s path to reform the system — to increase access, prevent disease, and contain costs — has come with as many potholes as advances.

The state announced increases in premium costs for Blue Cross Blue Shield (5.9 percent) and MVP (2.4 percent) insurance plans last week.

And right next to this announcement, state officials highlighted forward movement on a backlog with its online health insurance exchange, Vermont Health Connect (VHC).

The dance of stepping forward and back has led to frustration for some users, leading to the question: Is the two-step a natural part of change or a system broken beyond repair?

The ultimate goal of shifting Vermont’s health-care system has remained “to improve health and save money,” said Karen Hein, M.D. during a phone interview from her home in Halifax.

Hein, a former member of the Green Mountain Care Board (GMCB), spoke to The Commons as a private citizen. As a doctor, she has fought to improve the health-care system for almost 50 years by devoting time to numerous boards and initiatives. She serves on the Population Health Work Group, a subgroup of the state’s Health Care Innovation Project.

Approximately two years ago, when the state was transitioning to Vermont Health Connect, Hein, a frequent guest at state-sponsored community meetings, helped explain the new health-care exchange to nervous Vermonters.

Financial flaws

Hein said she’s heartened by the increased quality of the conversation around health care. People other than the policy wonks are holding the Legislature accountable for improving Vermonters’ medical care, she said.

Still, she believes that some basic flaws remain in the system and that changing the system by trying to sort out the finances is a backwards way to approach the issue.

“Single payer is not dead,” she said.

But it will need a new strategy.

Changing how people receive their care, preventing disease, improving well being, and increasing the population’s health overall will save money, said Hein.

Hein said that fixing the government’s health-care cost shift — where one party pays less than cost, creating a scenario where another party overpays — is needed to move forward with repairing the health-care system.

Also required: fundamental changes in technology to capture data, and the federal government stepping up with new commitments to expand the scope of Medicaid reimbursements.

“I think it’s going to get worse before it gets better,” she said of the transition.

Costs haven’t caught up with changes, she said, asserting that medical professionals need the regulatory freedom to deliver health care differently.

Paying for the new health-care system is only half the equation, she said.

“Unfortunately, [the conversation] was always framed the wrong way,” Hein said. “It’s the system that saves money and improves health. We’ve only talked money and not system.”

Change by design

Hein said that she doesn’t see Vermont achieving a single-payer system as most people understand it. What she does see taking shape is a single pot of money that then flows into a redesigned health system.

For her, the key to this vision is collecting data, which she says helps communities align their actions with their desired health outcomes.

“I believe in an evidence-based approach,” she said. “What we measure is what counts.”

Vermont has made strides in this area through the Green Mountain Care dashboard, she said.

The GMC Dashboard 2.0 includes 51 indicators grouped into 12 categories that measure health outcomes at different points of a community’s lifespan. The dashboard collects data around questions like “Do pregnant women and infants thrive?,” “Are elders living with dignity in a living situation of their choice?,” and “Are adults living healthy and productive lives?”

Hein, a member of the RAND Corporation’s Health Board of Advisors, said that data collected by that think tank has shown that a third of health-care expenses trace back to overuse, such as doctors calling for tests that patients don’t need.

In response, she said that, based on “Choosing Wisely,” an initiative by the American Board of Internal Medicine’s charitable arm, the ABIM Foundation, the Vermont Medical Society has adopted a list of unneeded procedures, tests, or surgeries.

Hein said that changing what doctors’ procedures will require retraining health care providers to avoid prescribing unnecessary tests or to use alternative procedures.

VHC has proved messy, she said, because it’s tried to blend the multiple data systems of Medicaid, Medicare, and private insurance.

And, she said, Gov. Peter Shumlin got stuck on the problem of Medicare and Medicaid reimbursement rates being so low that providers in Vermont are discouraged from accepting patients under those federal programs. To make up the shortfall between the federal programs and private insurance, Shumlin lobbied for a payroll tax — an idea that went nowhere.

If she could wave a magic wand, Hein said, she would gear the health-care system toward health and well-being.

As a side note, Hein said that the state is working on a central database that should more efficiently put health-care data and claims in one place.

But for Hein, VHC is only a stepping stone to the overhauling of the whole system.

Some changes needed: change what health-care dollars can be spent on, and revise the policy around how medical professionals can spend federal dollars.

In the big picture, she envisions a system where, rather than paying hospitals for individual services like X-rays or blood work — a model that she terms “paying for widgets,” — institutions would receive money for how healthy their patients are overall.

The state is also negotiating with the federal government for a federal “global commitment” waiver that will expand what services Medicare can pay for, she said.

Over time, this waiver, if granted, will let the state mix all federal health-care money with some private insurance money and direct it into one fund that can then be reallocated to people’s care.

And if granted, this global-commitment waiver should set the groundwork for changing how the health-care system is financed, she said.

Other states have made some strides in health-care financing, she pointed out. Maryland, for example, has created “global hospital budgets” that focus on funding group care rather than individual widgets, she said.

Smoothing the rules so more parts of the health-care system can collaborate also needs to happen, Hein said.

Multiple roadblocks stop collaboration — roadblocks like proprietary software that won’t let hospitals commingle their data even when two hospitals license the same software, she said.

VHC is an example of what happens when the state and federal government collaborate on a lofty goal of increasing access to health insurance, Hein added.

Vermont has taken some steps toward changing how it provides health care through measures like Accountable Care Organizations (ACO) and community health teams, she acknowledged.

But in the end, “It is American capitalism, and it’s what we’re stuck with,” Hein said.

Who’ll change first?

Still, VHC and the exchange have meant sticker shock for some Vermonters who have seen their premiums increase and coverage decrease.

The biggest reason the system isn’t working for some, in Hein’s opinion, is that no one has solved a problem that she describes as the “underlying flaw.”

That problem: the cost shift, where Medicare and Medicaid reimburse medical professionals for less than it costs them to give care, she said. She described this gap as a basic flaw in the financial side of the health-care equation.

Under Catamount Health, the pre-Obamacare state-run plan for Vermonters without health insurance, the state financed the gap, Hein said. With VHC, the consumers are picking up the cost shift directly.

The GMC Board, which is charged with containing health-care costs by approving health-insurance and hospital rates, has done its best to keep costs down, she said. So far, the board has kept hospital budget rises to less than 3 percent, down from double-digits, she said.

The board also denied the higher rate hikes that BCBS and MVP originally requested earlier in the year, only approving the respective 5.9-percent and 2.4-percent increases for the two insurers.

The Legislature had an opportunity to deal with the cost- shift issue last session but didn’t, she said.

“It’s only going to get worse until we fix the system,” Hein said, adding that costs will continue to rise until Vermont fixes the problem.

“It’s revolution time,” she said. “Start addressing your outrage with your vote.”

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Originally published in The Commons issue #319 (Wednesday, August 19, 2015). This story appeared on page A1.

Links

• GMCB dashboard: gmcboard.vermont.gov/dashboard2

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