VT Single Payer Plan

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1 VT Single Payer Plan It ain t over till it s s over! Yogi Berra The latest single payer battle was won, but the single payer war is far from over. Dan McCauliffe, MD Dermatologist - Rutland, VT

2 So far there have been three attempts to move Vermont to a Single Payer health care system. A fourth attempt is currently underway!

3 The third attempt resulted in a Single Payer law, passed in May 2011 but without a financing plan Two previous attempts at passing a single payer law in Vermont failed when the financing was addressed. So this time around a single payer law was passed without a finance plan, and again it failed, once the financing was addressed, after a long delay, and millions of taxpayer dollars were spent needlessly. People who said VT was wrong to pass the single payer law before figuring out if we could afford it, are now saying we told you so!.

4 Leading up to the 2014 election 3½ years after the law was passed we still have no financing details!

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8 After the 2014 election, the announcement is made.

9 Single Payer Is Not Dead! Beware of the resurrection of single payer health care in Vermont, under the guise of a health care all-payer global budget.

10 Shumlin s other single payer plan This is what Governor Shumlin said last month during his single payer renunciation speech, We must double down on health care reform by strengthening the Green Mountain Care Board so that we have a better shot at long- term cost containment, pursuing a federal all payer waiver so that we can be the first state in America to pay for quality not quantity,.

11 Shumlin s other single payer plan Move Vermont to a global budget payment system to finance health care. Definition of global budget Set amount of money to pay for health care Typically the budget is based on a hospital s historical revenues, which are adjusted for inflation and changes in the age and size of the population a hospital serves.

12 Definition of global budget Health care providers get a set amount of money to take care of an entire population of patients, rather than being paid for each service. Providers are at risk of going over budget. Global budgets lead to health care rationing, usually by long waiting times.

13 Federal global budget waiver The Shumlin administration is currently seeking an all-payer global budget waiver to include Medicare and other federal health care funds in a global health care budget. The plan is to develop a single payer global budget payment scheme as used in the Canadian single payer health care system, that will be administered through the Green Mountain Care Board.

14 Don t t be mislead by the name All-payer is sometimes used without mentioning global budget. The confusion in terminology arose from Maryland s s move from its all-payer system of payment to a global budget system of payment in It is unfortunately misleading that they kept the all-payer terminology rather than change it to global budget.

15 Maryland s all payer waiver Maryland got an "all payer" Medicare waiver over 36 years ago, that allowed Medicare and private insurance to pay the same amount for each service in the fee-for for-service payment method. Medicare paid over a billion dollars more to Maryland hospitals each year (than to hospitals in other states) to allow Medicare to pay higher fees for services.

16 Maryland s all payer waiver This became too expensive so the federal government is now requiring Maryland to move to a global health care budget,, if it is to keep the extra billion dollars from Medicare each year. So the all payer waiver has really been changed to a global budget waiver. The global budget went into effect last year 5 year test period.

17 Media coverage of Maryland s new all-payer (global budget) plan Calls it like it is: a move towards a single payer system.

18 All payer-global budget waiver cost & demographic hurdles for Vermont Over age 65 population % below poverty level Median income % on Medicaid Extra Medicare funding Privately insured Maryland 13.4% 9.8% $73,538 18% ~$ 1 billion per year more Vermont 16.4% 25% by % $54,267 30% none less

19 What s s in store for Vermont Under a global budget, Vermont will likely receive a set amount of health care dollars each year from the federal programs (Medicare, Medicaid, Tricare,, Federal Employees Health Plan) and combine them with a set amount from private insurers (e.g., BC/BS) based on per capita projections from last year s s health care expenses, linked to a yearly increase based on projected growth of the economy (as was done in Maryland).

20 Future Vision of VT Health Care Financing Under a Global Budget Federal Health Care Funds Medicare Medicaid Tricare Federal Employee Insurance Additional Taxes Private Health Care Funds Blue Cross / Blue Shield MVP, etc. Set amount of $ each year Green Mountain Care Board will collect and administer the funds Set amount of $ each year Population-based payments to regional hospitals, UVM & Dartmouth Medical Center payments to individual providers unrelated to number of services provided? Self Funded ERISA Protected Businesses

21 Problems with global budgets Under a global health care budget, each patient is seen as a potential liability (a potential budget buster), particularly those with expensive medical problems. The risk of cost overruns will be born by hospitals, physicians and other providers. This creates a perverse incentive for providers to limit care to stay within budget as they bear the risk of going over budget.

22 Problems with global budgets Non emergent medical care like joint replacement and cataract surgery will delayed to avoid breaking the budget, as experienced in Canada, Great Britain and other countries that utilize global budgets. The next decade may prove a bad time to need timely access to health care services, as proved by Canada's experience with global budget caps. This will be worsened by Vermont s s aging population that will require more health care.

23 Waiting Times in Countries With Single-Payer Global Budgets Canadians seeking non-urgent surgical or other therapeutic treatment faced a median wait time of 4.5 months in 2013 ( NHS waiting times soar as doctors blame cuts in hospital budgets - Waiting lists grew 61% in the past year, (The Guardian, August 2011)

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25 British Newspaper-2008

26 02 May 2012 Same British Newspaper - four years latter (2012)

27 Rationing Health Care A survey of Canadian doctors has revealed that 25% have had a patient die while on a waiting list.

28 Why global budgets are the wrong cure Canadian economist Yanick Labrie provides an excellent explanation why Vermont is wrong to use global budgets in financing its health care system. Montreal Economic Institute

29 Why global budgets are the wrong cure to reining in health care costs Decision makers have always regarded the global budget model as easy to administer and useful for reining in rising costs. However, this cost control which has not in fact prevented expenditures from rising has historically come at the price of service rationing: : given continually increasing demand, hospitals have had no choice but to limit admissions in order to stay within budget.

30 Why global budgets are the wrong cure The chronic problem of waiting lists in Quebec and in the rest of Canada is therefore rooted in part in hospitals funding models. Furthermore, global funding offers no incentives for hospital managers to innovate in order to reduce expenses and improve access and wait times.

31 Why global budgets are the wrong cure On the contrary, an innovation that led to spending reductions would translate into an equivalent decrease in the hospital s s next budget. Similarly, an innovation that led to wait times being reduced and more patients being treated would produce increased pressure on the hospital s s fixed budget. In either case, since patients are a source of additional expenses for the hospital, there would be no benefit to gain from greater efficiency.

32 Beware of Global Budgets This is another way to get to a single payer health care system. The state government will take over the administration of health care to Medicare and other insured beneficiaries.

33 If Gov. Shumlin is successful in getting the all-payer-global budget waiver that allows Vermont to administer Medicare, etc Will seniors and others be better or worse off than under traditional Medicare and insurance coverage? Will Vermonters be called upon to pay higher taxes to help pay for global budget shortfalls? How will health care waiting times be affected?

34 If Gov. Shumlin is successful in getting the all-payer-global budget waiver that allows Vermont to administer Medicare, etc Will Vermonters have free choice in choosing doctors and hospitals in other states under the state administered health care plan, like under traditional insurance and Medicare, or will they need to seek out special permission to do so? Will Vermont be able to retain an adequate health provider work force

35 So what should our short and long term What needs to be done about health care reform in Vermont. goals be to insure sensible health Short term and long term goals. care reform in Vermont?

36 What we need to push for this legislative session Repeal ACT 48 that established the single payer plan and the Green Mountain Care Board Bureaucracy (Not likely to happen) Pass legislation that preserves a patient s ability to pay for health care with private funds. (As possible in every other country other than Canada, Cuba and North Korea).

37 What we need to push for this legislative session Make participation in the Health Connect Exchange optional, like in the other 49 states. Move VT Health Connect to the federal exchange, as done in most other states.

38 Longer Term Educate voters and engage them in the health care reform process in hopes that they vote for legislators with common sense who are not blinded by their own ideology. Seek a system that provides easy access to high quality care for all Vermonters, while containing costs through means that do not negatively impact Vermonters health care, or the economy of the state. Empower patients and providers, not health care bureaucrats.

39 The European Experience European countries have been reforming their health care systems and have been moving away from the single payer model. Even in socialist Sweden they are now relying more on private health insurance to overcome the long waiting times in their socialized single payer system.

40 The European Experience The annual report rating 33 health care systems in Europe had to say about why the Dutch system has been #1 for three years in a row. The Dutch have established a European model to copy not least by abolishing single-payer systems. The Netherlands is characterized by a multitude of health insurance providers acting in competition,, and being separate from caregivers/hospitals."

41 The European Experience One important net effect of the Netherlands healthcare system structure would be that healthcare operative decisions are taken, to an unusually high degree, by medical professionals with patient co-participation participation. Financing agencies and healthcare amateurs such as politicians and bureaucrats seem farther removed from operative healthcare decisions in the Netherlands than in almost any other European country.

42 Get involved in the reform process and make your voices heard after after all healthcare is all about you THE PATIENT!