NEJM: Vt. single-payor plan reduces waste, hassle
Included in Vermont’s single-payor healthcare reform legislation is a global budget for expenditures, guaranteed coverage that isn’t linked to employment, and a single system of provider payments and administrative rules, noted Anya Rader Wallack, PhD, special assistant to Vermont Gov. Peter Shumlin in a New England Journal of Medicine perspective published July 20.
The law establishes a health benefit exchange—consistent with the federal Patient Protection & Affordable Care Act—for a publicly funded health insurance program for the state. It also establishes a Green Mountain Health Care Board responsible for cost control by setting fee-for-service (FFS) rates, controlling the acquisition of technology and reviewing health insurers’ rates and hospitals’ budgets.
Vermont’s healthcare delivery system would remain privately owned, but the state could contract with private insurers to perform some functions, noted Wallack. “It is not yet clear how far the state can go toward establishing a complete single-payor system,” she wrote. Vermont officials are currently investigating how Medicare, the military’s health plan and self-insured employers will fit into the system.
“Other elements yet to be worked out include the specific sources of public financing and detailed specifications for covered benefits,” she wrote. “We intend to develop these facets of the plan during the next two years and will request federal permission to have the single payor fully operational by 2017.”
Wallack noted numerous “ingredients for success” within the state. There are 14 community hospitals with fairly exclusive service territories, competition for patients is not a major factor and physicians “did not come to the state to get rich,” she wrote. “Our healthcare system is not bloated, and our providers want to do the right thing.”
The current FFS model, she added, creates financial incentives to deliver more care, without necessarily improving health outcomes. One of the goals of the legislation is to provide incentives for payors, providers and consumers that promote better health, she wrote.
“Achieving measurable cost control while tangibly improving the quality of care is certainly an audacious goal,” wrote Wallack. “But healthcare costs are eating up more and more of our economy even as the value of health insurance is eroding.
“It is worth watching Vermont’s development of its single-payor system as a model for guaranteeing coverage for all citizens, reducing administrative waste and simplifying insurance for both patients and providers. We can make health insurance simpler and easier for everyone and save money at the same time,” she concluded. “But Vermont’s most meaningful work in the near term will be aimed at changing out healthcare payment and delivery systems. I am convinced that’s where the real savings, and the sustainability, lie.”
The law establishes a health benefit exchange—consistent with the federal Patient Protection & Affordable Care Act—for a publicly funded health insurance program for the state. It also establishes a Green Mountain Health Care Board responsible for cost control by setting fee-for-service (FFS) rates, controlling the acquisition of technology and reviewing health insurers’ rates and hospitals’ budgets.
Vermont’s healthcare delivery system would remain privately owned, but the state could contract with private insurers to perform some functions, noted Wallack. “It is not yet clear how far the state can go toward establishing a complete single-payor system,” she wrote. Vermont officials are currently investigating how Medicare, the military’s health plan and self-insured employers will fit into the system.
“Other elements yet to be worked out include the specific sources of public financing and detailed specifications for covered benefits,” she wrote. “We intend to develop these facets of the plan during the next two years and will request federal permission to have the single payor fully operational by 2017.”
Wallack noted numerous “ingredients for success” within the state. There are 14 community hospitals with fairly exclusive service territories, competition for patients is not a major factor and physicians “did not come to the state to get rich,” she wrote. “Our healthcare system is not bloated, and our providers want to do the right thing.”
The current FFS model, she added, creates financial incentives to deliver more care, without necessarily improving health outcomes. One of the goals of the legislation is to provide incentives for payors, providers and consumers that promote better health, she wrote.
“Achieving measurable cost control while tangibly improving the quality of care is certainly an audacious goal,” wrote Wallack. “But healthcare costs are eating up more and more of our economy even as the value of health insurance is eroding.
“It is worth watching Vermont’s development of its single-payor system as a model for guaranteeing coverage for all citizens, reducing administrative waste and simplifying insurance for both patients and providers. We can make health insurance simpler and easier for everyone and save money at the same time,” she concluded. “But Vermont’s most meaningful work in the near term will be aimed at changing out healthcare payment and delivery systems. I am convinced that’s where the real savings, and the sustainability, lie.”