Health Care Reform in Vermont

1. Health Care Reform in Vermont NAHSP Presentation New Orleans October 6, 2010 Richard Slusky, Director of Payment ReformHealth Care Reform DivisionDepartment of Vermont Health Access

2. Universal Health Insurance:It’s Time Has Come • Promote adequate coverage for all Americans, regardless of income or employment • Plan Options • Qualified Managed Care Health Plans that would compete for contracts with employers or State-level “public sponsors” or • National Health Program—single public insurance system that would pay all health care costs from a common pool . . . .with the recommendation that the Federal government should ultimately assume total responsibility. • Source: Editorial – New England Journal of Medicine (NEJM) • January 12, 1989, Arnold S. Relman, MD

3. Vermont Health Care Reform 60+ Initiatives • Increase Coverage • New Coverage Options • Green Mountain Care • Premium/Prescription Assistance • Integrated Marketing and Outreach • Improve Quality • Provider Access • Promote Wellness / Prevention • Blueprint for Health • Health Information Technology • Quality Transparency • Accountable Care Organizations • Contain Cost Growth • All of Above PLUS • Cost Transparency • Statewide Health Resource Planning and Review • Prescription Drug Cost Containment • Administration Simplification

4. Commonwealth Fund State Scorecard 2009Vermont Rankings • Overall 1 • Access 13 • Prevention and Treatment 3 • Avoidable Hospital Use and Cost 11 • Equity 2 • Healthy Lives 8 Source: The Commonwealth Fund State Scorecard 2009

5. Vermont’s Health Care Expenditures Continue to Rise at an Unsustainable Rate • Total health care expenditures for Vermont residents are expected to reach $4.9 billion in 2009 and $5.9 billion by 2012. This results in an average annual increase of 6.5%. • Average annual increase in Vermont per capita health care expenditures over 2009-2012 is projected to be 6.3%. National per capita health care spending is projected to grow at an average rate of 4.8% during the same period. • From 2004 to 2008, Vermont per capita health care expenditures grew at an average annual rate of 8% compared to 5% for the U.S. “Some of the variance may be explained by differences in reporting, including sources of data, definitions, methodologies, timing and adjustments.” Source: State of Vermont, Department of Banking, Insurance, Securities and Health Care Administration, 1/15/2010

6. Care Delivery Goals of Health Care Reform in Vermont • Vermont’s PCPs will be adequately compensated and administrative burdens lessened. • Care will be organized and delivered in a patient-centered manner through community-based systems (Blueprint for Health and possible ACOs) • Rate of growth of health care costs must be slowed or reduced below current amounts • More availability of PCPs (including mid-level providers) • Simplify reimbursement • Reduce administrative costs • Align provider reimbursement with best practices and outcomes rather than volume

7. Cost Control Mechanisms within Health Care Reform in Vermont • Certificate of Need Process for new health care projects • Hospital budget caps • Insurance carrier rate review

8. Vermont Blueprint for Health • A foundation of medical homes and community health teams that can support coordinated care and linkages with a broad range of services • Supported by insurance companies • Multi-insurer Payment Reform that supports a foundation of medical homes and community health teams • Medicaid, BCBS of Vermont, MVP, CIGNA, State of Vermont • A health information infrastructure that includes EMRs, hospital data sources, a health information exchange network, and a centralized registry • VITL, GE, Docsite • An evaluation infrastructure that uses routinely collected data to support services, guide quality improvement, and determine program impact • NCQA Standards, Hospital Admissions, ED Visits 9/23/2014

9. Vermont Blueprint for Health Hospitals Medical Home PCPs Specialty Care & Disease Management Programs Community Health Team Nurse Coordinator Social Workers Nutrition Specialists Community Health Workers MCAID Care Coordinators Public Health Specialist (Serves @ 20,000 people) Medical Home PCPs Social, Economic, & Community Services Medical Home PCPs Mental Health & Substance Abuse Programs Medical Home PCPs Healthier Living Workshops Public Health Programs & Services 9/23/2014

10. Vermont Blueprint for Health Multi-insurer Payment Reforms Insurers • Fee for Service • Unchanged • Allows competition • Promotes volume • Patient Centered Medical Home • Payment to practices • Consistent across insurers • Promotes quality • Community Health Teams • Shared costs as core resource • Consistent across insurers • Minimizes barriers + + • Based on NCQA Score • $1.20 - $2.49 PPPM • Based on active case load • 5 FTE / 20,000 people • $ 350,000 per 5 FTE • Scaled based on population

11. Blueprint will be expanded to cover entire Vermont population in 5 years • Blueprint must include: • Model for uniform payment by all payors that encourages medical homes and community health teams • Creation of a statewide infrastructure of Health Information Technology • All insurers required to participate in the Blueprint • Policies must be consistent with Federal legislation and requirements for waivers, pilots, etc.

12. Events in Vermont Health Care Reform • Act 128, Passed by Legislature in Spring 2010 • Increase Coverage “Ensure universal access to add coverage for essential health services for all Vermonters . . . .” • Improve Quality Vermont’s health delivery system must model continuous improvement of health care quality and safety . . . and must be evaluated for improvement in access, quality . . . and reduction in costs.” • Contain Cost Growth A system for containing all system costs and eliminating unnecessary expenditures . . must be implemented . . . THE FINANCING OF HEALTH CARE IN VERMONT MUST BE SUFFICIENT, FAIR, SUSTAINABLE, AND SHARED EQUITABLY.

13. 2010 Events in Vermont Health Care Reform (Cont’d) • Act 191 of 2006 created a Commission on Health Care Reform that includes 4 House Members, 4 Senate Members, and 2 appointed non-voting members with experience in health care. • Act 128 of 2010: The Commission will engage a consultant to propose to the legislature, by February 1, 2011, at least 3 design options for creating “a single system on health care which ensures all Vermonters have access to and coverage for affordable, quality health services.”

14. 2010Events in Vermont Health Care Reform (Cont’d) • RequiredDesign options are: • Government-administered and publicly financed “single-payer” health benefits system, decoupled from employment and allowing private insurance coverage only for supplemental health services. • Public health benefit system administered by state government, allowing individuals to choose between the public options and private insurance coverage. • Another option to be determined in consultation with the Commission.

15. Act 128 also created the position of “Director of Payment Reform” • The Director of Payment Reform shall oversee the development, implementation, and evaluation of payment reform pilot projects: • Organized around PCPs • Align with the Blueprint Strategic Plan and Statewide HIT Technology Plan • Care should be coordinated • All payors should reimburse health care providers and professionals for coordinating patient care through a single system of payments . . .

16. Act 128 also created the position of “Director of Payment Reform” (Cont’d) • Medicare should be encouraged to participate in the payment reform initiatives (pilots should be aligned with Federal law) • A global budget should be developed • All insurers in Vermont will be encouraged, if not required, to participate in the pilot projects

17. Summary • Vermont committed to improve access and quality, and to reduce costs • Legislative Reform Commission • Consultant’s Report 2/1/2011 to propose at least three system design options • Director of Payment Reform Report 2/1/2011 to propose comprehensive payment reform options and pilot projects