Editor’s note: This commentary is by Patrick Flood, the former commissioner of the Department of Mental Health, the Department of Disabilities, Aging and Independent Living and former deputy secretary of the Agency of Human Services. He recently retired from Northern Counties Health Care.
[T]he plan released by the Shumlin administration for the so-called “all payer model” of health care should not move forward until there is more time to discuss all the questions it raises.
Before I retired in July, I had spent 32 years in state government and health care, including negotiating a different waiver with the federal government for long-term care services in 2005. For the last three years I managed a federally qualified health care organization in St. Johnsbury.
I support the concept of an all-payer model. I believe that integrating Medicare, Medicaid and private insurance, if done right, can lead to better care, better health for Vermonters and lower expenditures. The problem is that the current proposal is not the right way to proceed. There are numerous reasons for this.
First, the proposal requires the creation of a new accountable care organization (ACO). We have had three ACOs in Vermont for about three years and none have saved any significant money. What makes us think another ACO will fare any better? Vermont is already one of the lowest cost states in the nation for Medicare spending. The governor’s claim that the proposal could save billions strains credulity. We need to see the analyses that lead to that prediction.
Second, this new ACO will result in even more administrative costs: more executives, computer systems, and case managers. This will run into the tens of millions of dollars of new costs. No one is saying yet how this will be paid for, but it is pretty clear it will come out of Medicare and Medicaid funding. This may be “new” funding from the feds, but with all the needs we have in Vermont, to spend tens of millions on additional administrative costs is just wrong. I would suggest that, if the new ACO is such a great idea, that the hospitals and other organizations in the new ACO foot the bill, not taxpayers. Not to mention that physicians are already overwhelmed with administrative requirements that take time away from patients and take the joy out of medicine. Instead, now they will have yet another entity to tell them what to do and waste even more time.
Third, there is nothing in the plan that shows how it will result in reduced premiums for businesses or families that buy private insurance. The current system has a so-called “cost shift” because Medicaid does not pay the cost of care. As a result, hospitals charge private insurance more to make up for that loss, in other words, “shift the cost” of care from Medicaid to private insurance. If this proposal will not reduce the cost shift in any meaningful way, how valuable is it?
Fourth, the proposal is basically a plan to privatize health care in Vermont by turning over management of health care from state government to a private entity. If this is to happen, then there needs to be transparency and accountability. It is difficult enough to get transparency and accountability from government; it will become much more difficult when a private organization is in charge. The transparency and accountability need to start now. It is also interesting to note that former Gov. Howard Dean recently wrote that the privatizing the management of health care would cost more, not less.
Fifth, the plan does not describe how funds will be used, where expected savings will come from and how those savings will be re-invested to improve health of Vermonters. Without such a business plan, Vermonters have no idea what will actually happen once this new entity is in place.
Vermonters might be concerned that the ACO will balance the health care budget by reducing services or payments to some providers. In an agreement signed by the three ACOs last fall such a detailed business plan was promised by May, but has yet to be seen.
Last but not least, the people of Vermont are being given about three weeks to learn about the proposal and comment on it. This is unprecedented and unreasonable. The proposal is by far and away the largest and most significant change that has even occurred to health care in Vermont. The details matter, and the details can be very complicated. Vermonters are being asked to take a huge leap of faith. Something this big and complicated deserves more scrutiny by the people that will be most affected: Vermonters.
Meanwhile, there are other models that could achieve better outcomes more quickly, with less administration, and lower investments but there is no discussion of other options.
Without a lot more detail and information, and time to digest it and discuss it, Vermonters will be subject to a huge change that could become another expensive boondoggle.
