Vermonters for Health Care Freedom is a 501 (c) (4) organization of individuals and businesses who are deeply concerned about health care reforms being implemented by Governor Shumlin, and seek patient-centered reforms that protect the traditional doctor-patient relationship.

Newsletter - May 3, 2013

Here is the most interesting news and analysis regarding Vermont’s single payer health care experiment from the week ending May 3, 2013.


IN THIS ISSUE:

> Vermont Health Exchange Falls Behind Other States
> Sen. Joe Benning Responds
> Why is VT Pursuing Canadian-Style Single Payer?
> $7 Million for Health Reform Advertising in Vermont
> Larson: “doing actual work is a major milestone” 

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Vermont Health Exchange Falls Behind Other States


For the last couple of weeks Newsletter has applauded the House Ways and Means Committee, chaired by Rep. Martha Heath, for retaining the services of the Joint Fiscal Office and the consulting firm of Health Management Associates (HMA) to ground-truth administration claims regarding the costs and risks associated with the Shumlin Administration’s health benefits exchange being created under Obamacare. This week Tom Dehner, managing principal at HMA, offered testimony to the committee and to Andrew Stein writing for VTDigger.com.

Mr. Dehner had good news and bad news. The good news (if you can call it that) was that the administration’s estimate of Vermont’s ongoing cost to operate the exchange - $18.4 million per year - was about right. The bad news? According to VTDigger.com:

Dehner also cautioned lawmakers that attempting such ambitious IT projects and payment reform with the uncertainty of a single-payer financing plan would make the situation more difficult for everyone.

“It is really hard — really hard, really really hard — to deal with multiple IT projects at the same time that interrelate to one another,” Dehner said. “It’s hard in a vacuum. It’s harder when the idea of single payer in 2017 is kind of floating out there, but is kind of unclear.”


The legislature has about two weeks to decide how the state will raise the $18.4 million. Failure to enact a credible plan will result in the refusal of the federal government to allow the Vermont exchange to move ahead. Vermont is the only state to have outlawed the private insurance market, making the exchange the only place 118,000 Vermonters will be able to legally purchase health insurance as of January 1. But the House and the Senate have very different approaches and according to House Speaker Shap Smith,

“I think what will end up happening is we’ll end up negotiating it out in the final bills,” he said.

As the session accelerates to an end on May 11, Smith isn’t guaranteeing it will pass.

“I think it’s likely, but it’s still possible that it might not,” Smith said.”


The VTDigger.com article is here:
http://vtdigger.org/2013/05/01/financing-plan-for-vt-health-care-exchange-up-in-the-air/ 

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Sen. Joe Benning Responds


Here is the response of Sen. Joe Benning to the VTDigger.com article above:

HMA warned the state is biting off an ambitious mouthful, and it needs to shore up long-term health care financing plans - whether it adopts a single payer system or not.”

Now there’s what you call “an understatement of major proportions.”

Make no mistake, the shift in how Vermont handles health care conceptually represents the largest financial undertaking this state has taken on since we first mustered troops for the Civil War. It has the potential to literally double the state’s current five billion dollar budget.

Whether we “adopt a single payer system or not” is no longer the question. That train, engineered by a Democratic super majority, has left the station. That super majority has had the responsibility from the get go to let us all know how much these systems (the Exchange and GMC) will cost and how we will pay for it. Vermonters need to know!"


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Why is VT Pursuing Canadian-Style Single Payer?


One of the reasons used to argue for switching Vermont to a single payer health care system is to save on administrative costs. The thought is that if you have one source of government funding for health care, there will be less complexity and more efficiency in paying for health care services.

The reality, however, is that only approximately 50% of the state’s population would likely be incorporated into the single payer system. From a table prepared by the Green Mountain Care Board several groups are not likely be included under single payer. These groups include individuals covered under ERISA-protected self-insured employers (109,747); Federal Employees, including the military (31,273); Vermont residents covered by out of state employers (51,358); and residents covered by Medicare (108,395). This represents 300,773 of Vermont’s 628,780 residents, or 48% of Vermont’s population. 

(GMCB PowerPoint is here:
http://gmcboard.vermont.gov/sites/gmcboard/files/2011HC_ExpendAnalysis.pdf )

There has been discussion about getting a federal waiver so that Vermont can include residents covered by Medicare under the single payer plan, though it is likely that senior citizens will resist this effort. Even if the state is successful in rolling Medicare into the single payer plan, 31% of the Vermont population’s health care would still be financed by sources outside of the single payer system. 

There are additional non-residents that will also have health care funding outside of the single payer system. This includes tourists, visitors, people who work in VT but live and are insured in another state, and non-resident second home owners. 

The claimed efficiencies of single payer will thus be curtailed by the fact that a significant portion of the state’s population and non-residents who use Vermont's health care system will be funded by outside sources. 

Additional insight can be gained on how much administrative cost savings might occur under single payer, by comparing total health care costs under the single payer system in Canada to the non-single payer European health care systems. If the single payer system provided significant savings through minimizing complexity and maximizing efficiencies in financing health care, then one would expect Canada’s health care system to be significantly less costly than the non-single payer European systems. Well in fact, Canada’s single payer system is more costly than all of the non-single payer European systems, with the exception of the French, Swiss and Dutch systems that spend about as much, as a percentage of GDP (gross domestic product) as does Canada. 

It should be noted that the single payer Canadian health care system ranks poorly compared to the majority of the non-single payer European health care systems. So we should be asking why Vermont has chosen to copy the Canadian single payer model rather than the better European health care systems - none of which are single payer, and many that spend less on health care than Canada. The reason can be found in the Spring edition of Vermont Life
http://www.vermontlife.com/special-report-pre-exisiting-conditions/ 

From the “Special Report” article in Vermont Life

The final star aligned in the single-payer constellation when Shumlin was elected governor in November 2010. Shumlin had survived a five-way primary by 203 votes, which was the margin by which he won [single payer activist Ellen] Oxfeld’s home county, Addison County, Oxfeld noted. She believes the single-payer advocates delivered Shumlin the primary and the general election, which was also close.

Shumlin agreed.

“When I entered the five-way Democratic primary, I was the last candidate in, and I was polling fourth out of five. Most people thought it was a fruitless effort. I was the only candidate in America to make ads that said, ‘If you elect me governor, we are going to pass single-payer health care,’” Shumlin said. “The grassroots support I got from single-payer advocates made it possible for me to be governor. They knocked on doors. They poured their hearts out. They saw an opportunity, and I would not be here without them.”


So in a nutshell here are the reasons Vermont chose the inferior Canadian style single payer system over the better non-single payer European health care system models:

1) Single payer activists lobbied for single payer health care and started a grass roots effort that Peter Shumlin used to help get elected in 2010. 

2) Single payer activists put Peter Shumlin in touch with single payer advocate William Hsiao who played a large role in developing Taiwan’s single payer health system. 

3) Hsiao developed three model health care systems for Vermont to consider and, not surprisingly, he recommended the Canadian style single payer model. 

4) And the rest is history with the passing of Act 48 in 2011 that establishes the Hsiao-endorsed Canadian style single payer health care system. 

It is too bad the Vermont legislature didn’t seek out advice from experts who are more familiar with the better European non-single payer models that easily outperform the Canadian system and are not plagued by the long waiting times that are encountered in Canada. The non-single payer European models would have been a better fit for Vermont considering the large percentage of people who will pay for health care services in Vermont with funds outside of the single payer system. 

In the end, Vermont will never have a true Canadian style single payer health care system, even if Governor Shumlin and his single payer activist supporters want it to be so. It is probable that Vermont's attempt at single payer will eventually evolve toward the better non-single payer European health care system model - or at least we can hope that it does - without doing excessive damage to our health care system and state's economy in the interim.

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$7 Million for Health Reform Advertising in Vermont


According to the Rutland Herald, Vermont is spending millions of dollars more on the Vermont Health Connect health benefits exchange than similar efforts in other states. 

"The state will spend more than $100 million to launch Vermont Health Connect.......But first, its leaders will roll out a nearly $7 million advertising and awareness campaign to alert the majority of the public that so far is unaware of what’s coming." 

(Herald article is here:
http://www.rutlandherald.com/article/20130421/NEWS01/704219947/1001/NEWS )

By comparison Maryland is spending $6 million to promote it's Obamacare exchange, yet Maryland's population is nearly 10 times larger than Vermont's. If Vermont spent as much per capita as Maryland, it would save Vermont taxpayers over six million dollars. Dollars that could be better spent elsewhere - for example, subsidizing former VHAP and Catamount enrollees to cover their higher expenses in the exchange. (Source: http://freebeacon.com/a-tough-sell/ )

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Larson: “doing actual work is a major milestone”


The Department of Vermont Health Access announced this week it has awarded the final two IT contracts to complete the Vermont Health Benefits Exchange. According to VTDigger.com Commissioner Mark Larson said:

We are outsourcing the design, development and implementation elements for the exchange,” said Mark Larson, commissioner of the Department of Vermont Health Access. “Having all of our players in place and doing actual work is a major milestone.”

Ya think? The Exchange is required by federal law to be operating on October 1. That’s six months from now. And we just hired the last two contractors and are finally “doing actual work.”

Read the short VTDigger.com article below and the dollars being expended will take your breath away:
http://vtdigger.org/2013/05/02/state-signs-last-major-it-contracts-for-health-benefits-exchange/ 

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Vermonters for Health Care Freedom provides a weekly summary of news and opinion each Friday. For daily news and updates click “LIKE” on our Facebook page (http://www.facebook.com/VermontersforHealthcareFreedom) and visit often.

 

 

"It amazes me to hear politicians say the present Vermont health care system is completely "broken" when by most national measures Vermont's health and healthcare always come out at the very top of the 50 states. Having served nearly thirty years in a solo orthopedic surgical practice involving call every night and 7 day a week coverage for Gifford Medical Center I proudly treated every patient whether they could pay or not - some even at home. My colleagues, nurses and staff at Gifford Medical Center equally serve their fellow Vermonters 24/7 without regard to ability to pay. It denigrates us all when our efforts are so callously categorized for political advantage in pursuit of the Holy Grail of a single payer which may or may not help solve the problems of health care funding."

William Minsinger MD, Randolph, Vermont

  • Employers pay 40% of the healthcare costs – and were never consulted.
  • An appointed board will determine benefits, coverage, funding, deductibles, co-pays, premiums, technology, provider payments, etc.
  • Under this law, you will not be allowed to purchase insurance outside of the Vermont Health Benefit Exchange.