Vermont Health Care Briefing

1. Vermont Health Care Briefing August 2014 John McClaughry

2. Destination: Single Payer • History – movement began c1987 • Legislation dramatically failed in 1994 • Douglas vetoed another bill in 2005 • Enacted as Act 48 of 2011 after presentation of Hsiao Report • Will come to life in 2017 (if Federal waiver is obtained)

3. Single Payer Features: Green Mtn Care • “Health care is a human right” – Shumlin • “Health care is a public good” – Act 48 • Universal – every Vermonter in • Centralized government control – GMC Board • Care is free at point of service (but 87% AV) • All costs paid by taxpayers (but 87% AV) • Global budget controls costs • “Payment reform” to replace fee for service

4. Model: Quebec Medicare • Province controls all health care - RAMQ • Everybody in (except military and prisoners) • Care is free at point of service – flash card • Doctors and hospitals mostly private • Doctors and hospitals price controlled • Global budget controls costs • Private contracting forbidden (until 2005, when Supreme Court overturned)

5. Results of Quebec Single Payer • Government rationing • Long waiting times for treatment • Maddening bureaucracies • Demoralized doctors and nurses • Shabby facilities (restricted investment) • Obsolete technology (restricted investment) • Aggressive unionization • Much higher taxation

6. Green Mountain Care Board • 5 member board has full control over doctors, hospitals, and prices etc. • Power over collective bargaining • Power to determine “essential benefits” • “Payment reform” ($45 m HHS Grant)

7. Vermont Health Connect • Insurance Exchange created under ObamaCare act ($170 million HHS grant) • Mandatory for Small business (<50) now, larger business (>50) in 2016 • Can select from GMC approved plans • Delivers income-tested tax credits to defray premium costs • Disappears in 2017 when GMC terminates health insurance • Rollout completely bungled

8. Single Payer: Exceptions • Hsiao Report promised $580 m in “savings” • But GMC won’t be single payer: excludes Medicare, FEHBP, Tricare, and almost certainly self insured companies – in all, 50% of lives • Query: can “savings be achieved with half-single payer? • Hsiao insisted on no-fault medical malpractice coverage; scrapped early by Shumlin administration

9. Single Payer: Medical Impact • Hsiao Report assigned $50 million a year of “savings” to pay MDs and RNs to stay here • The idea of those “savings” has long been abandoned • Limiting payments to MDs and RNs to stay within “global budget” means doctor shortage • Fewer providers, less technology, long waiting times = reduced quality of care

10. GMC: Key unanswered questions • Financing: how raise $2 billion to pay for? • Eligibility: how prevent Vermont become the Shrine of Lourdes for the sick and poor? • What happens when providers use up their “global budget” allocations? • Will DHMC and Albany Med Center etc accept cut rate payment for VT patients? • Which hospitals will be closed?

11. Resources • See handout for “Basic resources for understanding educational finance and health care issues” • See handout for “Informed Citizen Questions on the Issues of 2015” • For state fiscal issues, visit Joint Fiscal Office (www.leg.state.vt.us/jfo) • Visit www.ethanallen.org for reports and commentaries on current state issues