Update on House Health Care Committee - March 25, 2005

Over the past months, the House Health Care Committee has been reading and researching the health care issue. We are now working on a first draft of a bill. Here is some background information, some general thoughts, and on the back is a draft outline.

Background

We have read a number of reports and articles including:

· the 1993 Vermont Health Care Authority Report,

· a Washington Monthly article on the Veteran's Administration and how it transformed its hospitals to produce high quality care at a reasonable cost,

· articles about the Oregon Health Plan and how it worked,

· articles on the strategies for reducing health care spending including one from the New England Journal of Medicine,

· "Escape Fire" by Donald Berwick, MD, an inspiring piece about the need for thinking creatively in reforming health care,

· numerous pieces by NCSL, "Hard Choices in Health Care 2002, What Vermonters Are Thinking," and many others.

"Escape Fire" is a great article to read - we will put a web link on the Health Care issues section if we get approval from the publisher.

The Committee has held a public hearing and heard from many witnesses including Dr. Elliott Fisher (PhD), with Dartmouth's Center for Evaluation of Clinical Services, Con Hogan, Dr. Deb Richter, Trish Riley and Mike Saxl (former Speaker) of Maine involved with setting up Maine's DIRIGO program.

General

The current health care crisis is a symptom of two more fundamental problems. Attempts to address the symptoms without addressing the problems will leave the state facing crisis after crisis as it has for years. The two structural problems that must be addressed by reform are:

1. The health care infrastructure does not operate as a system. As health care costs increase rapidly, everyone agrees they need to be contained, but no one in the system feels they have the power to do anything about it.

2. Current financial incentives conflict with the state's health care goals. The structural financial incentive is for providers to seek more patients and collect more fees in order to survive even though most of the system's costs are fixed and the system goal to have fewer people require heath care services.

Health Care Reform Bill

The House Health Care committee is developing a bill that:

a. Ensures that all Vermonters have universal access to essential health care services through a publicly financed, integrated regional health care service delivery system

b. Controls escalating costs of health care

c. Develops a more efficient, patient-centered, evidence-based health care service delivery system

Attached is a draft outline that is currently under discussion.

Proposed Vermont Health Care System Reform Plan

March 25, 2005 Draft

System Goals

· coordinated care: statewide system of health care providers and facilities (integrated patient care organized by regions)

· uniform benefits: all essential health care services will be covered

· universal access: available to all Vermonters

· control of spending: fixed annual funding and incentives to emphasize health promotion and prevention and to provide services in a cost-effective manner

System Structure

· Centralized information system

o System design and budget by 2006

o New statewide IT system functional by 2010

· Primary Care System-emphasizing prevention, check ups and health education

o Immediate expansion of FQHC's and look-alikes to Lamoille, Orange, Rutland, and Washington Counties by 2006

o Universal state-sponsored coverage of primary care services and alternative therapies by 2007

· Hospitals

o State payment for hospitals and hospitalization services by 2007

· Regional Integrated Systems of Care

Community health boards to work towards integration of the health care system

System Governance

· Reorganize state health care administration in 2005

o Department of Health Care Administration - consolidate existing planning, negotiation, administration, billing and collection, payment under one department

o Regulatory Board - budget review and approval, appeals

o Benefits Board - establish prioritized list of procedures

· Regional governance entities to coordinate regional networks

Regions to be determined by 2006

o Regional stakeholders are invited to develop a governance structure that meet legislature's criteria

Financing

· Funding structure could include a 2/3 payroll tax and 1/3 income tax

o Funds set aside for transition assistance in 2007 to employers providing insurance for their employees, implementation of this plan and could also provide Medicaid funding bridge to reform.

o One option is to start financing earlier at a lower rate to generate funds necessary to begin the program

o Second option is to start at a later date and with a higher rate

· Establish co-payments for health care services to ensure that everyone contributes

· Revenues designed to reflect ability to pay

Public Input Process

· Establish process to solicit broad-based public input on this plan