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NO. 118. AN ACT RELATING TO AN INDEPENDENT PERFORMANCE AUDIT OF VERMONT’S HEALTH CARE SYSTEM.

(H.711)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. FINDINGS AND PURPOSE

(a) The General Assembly finds that:

(1) As of 1998, approximately 87,598 Vermonters were covered by Medicaid, 86,588 Vermonters were covered by Medicare, 378,171 Vermonters were covered by private health insurance, and 38,526 Vermonters were uninsured.

(2) It is the policy of the state of Vermont to insure that all residents have access to quality health services at costs that are affordable.

(3) It is further the policy of Vermont that the health care system should facilitate universal access to preventive and medically necessary health care.

(4) Vermont, unlike most other states, has developed both public and private mechanisms for collecting and analyzing a wide variety of health care data. The challenge is to put this wealth of information in a format that is usable and understandable to policy-makers and the public.

(5) The state of Vermont’s health care financing and delivery system is under extreme pressure and must be stabilized to insure continued high quality access that is affordable to all Vermonters.

(6) According to the 1994 report of the commission on the public’s health care values and priorities, Vermonters assign a high priority to two conflicting health care goals: extending care to everyone and lowering or containing health care costs. The commission also found that Vermonters should continue to have insurance through the Medicare and Medicaid programs, Vermonters should receive quality health care, regardless of their ability to pay, and in addition to receiving quality health care, uninsured Vermonters should accept responsibility for paying a fair share of their health care costs.

(b) It is the purpose of this assessment to provide a resource for understanding and subsequently improving Vermont’s health care system by collecting current health care data, evaluating the causes of and the potential solutions to the current cost pressures in the system, and by integrating the public’s understanding of the expenses of the health care system with Vermonters' health care values and priorities.

Sec. 2. INDEPENDENT ASSESSMENT OF VERMONT’S HEALTH CARE SYSTEM

(a) The General Assembly hereby directs that an independent assessment of Vermont’s health care system be conducted. This assessment shall emphasize an analysis of Vermonters’ desired health care values and priorities coupled with the costs of achieving those goals, as well as an analysis of the health insurance marketplace and the provider delivery system. The assessment shall use previously collected relevant data and any other available relevant data related to Vermont’s health care system. The assessment shall include:

(1) An evaluation of currently identified areas of concern that have led to premium increases to residents of Vermont, including the effect on rates of large capital expenditures at Vermont hospitals, the status of the health insurance marketplace, pricing strategies, the interplay between public and private health insurance reimbursement policies, cost shifting caused by Medicare and Medicaid reimbursement policies, cost shifting among private payers, and bad debt and free care.

(2) An evaluation of the appropriateness of Vermont’s provider delivery system with respect to access, utilization, cost, changes in technology, growth in benefits, and pressures on labor costs, including the financing and missions of the not-for-profit hospital system in Vermont in addition to other hospitals which deliver a significant amount of care to Vermonters.

(3) An in-depth analysis and the related activities necessary to determine the most effective methods for providing access to affordable health insurance coverage to all citizens of this state, including employees of nonprofit organizations.

(b) The commission on public health care values and priorities will develop a mechanism to educate Vermonters, then conduct a dialogue and facilitate Vermonters’ ability to make informed decisions regarding the development of an acceptable health care system, including a consideration of ethical choices.

(c)(1) The independent health care assessment committee is created, consisting of three members appointed by the governor with knowledge and expertise in health care. The governor’s appointments shall be made on or before 60 days following passage of this act.

(2) The committee’s role shall be to administer and develop the request for proposal contract process for purposes of accomplishing the purposes of this act as defined in subdivisions (a)(1), (2), and (3) of this section. The committee shall facilitate cooperation between state agencies and the contractor to accomplish performance of the assessment. The committee shall have all powers necessary to carry out the purposes of this section, including:

(A) Those general powers provided to a business corporation under Title 11A.

(B) The power to hire or contract for professional administrative staff.

(C) The power to hold one or more public hearings.

(D) The power to award one or more contracts to conduct the assessment required by this section.

(3) Upon request by the committee, all officials and employees of any state agency, department, office, board or commission shall provide information and assistance to the committee and to the contractor, necessary or desirable in carrying out the duties of the committee.

(4) The agency of human services is authorized to apply for federal or private grants to extend the scope of the assessment of the committee. The agency may apply for grants that will support an assessment of the most effective methods to provide affordable health insurance coverage to the citizens of the state, or other such grants that will assist the committee in the performance of its duties.

(5) The committee shall issue its request for proposals to conduct the assessment no later than September 1, 2000.

(6) Members of the committee shall receive compensation and reimbursement of expenses in accordance with section 1010 of Title 32.

Sec. 3. REPORTING REQUIREMENT

The contractor’s assessment, the committee’s report, and the commission’s report shall be submitted to the general assembly and the governor on or before September 15, 2001. The joint fiscal office shall examine the resources necessary to provide ongoing assessments of Vermont’s changing health care system, and provide its recommendation in the form of a report to the general assembly and the governor on or before November 1, 2001.

Sec. 4. APPROPRIATION

(a) The sum of $150,000.00 is appropriated from the general fund to the independent health care assessment committee in fiscal year 2000 to accomplish the purposes of this act. This sum is to be carried forward into fiscal year 2001 to accomplish the purposes of this act.

(b) The committee shall distribute the sum of $100,000.00 to support the activities of the Commission on Health Care Values and Priorities, in accordance with the provisions of Executive Order 13-98.

(c) The committee shall have the authority to distribute the remaining $50,000.00 to accomplish the purposes of this act, pursuant to subdivisions (a)(1), (2), and (3) of Sec. 2 of this act, if the state of Vermont receives a grant, pursuant to subdivision (c)(4) of Sec. 2 of this act, from the State Planning Grant Program authorized by the fiscal year 2000 Health and Human Services Appropriations Act.

Sec. 5. EFFECTIVE DATE

This act shall take effect on passage.

Approved: May 19, 2000