Health Care 3.0: What’s Next?

“The questions for Vermont is do you want to walk ahead of the

U.S.? Do you want to be a model for the rest of the country?”

Dr. Hsiao 1/19/11

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Who’s with you tonight?

Kathleen StollDirector of Health Policy

Families USA

Anya Rader WallackChief HC Advisor

Governor Shumlin

Daniel BarlowPolicy Director

VBSR

Dr. Michael ScollinsPhysician; Trustee

VPIRG

Cassandra GekasHealth Care Advocate

VPIRG

Paul BurnsExecutive Director

VPIRG

Why we’re all here

• Our health care system is broken

• Vermont can do better

• Federal money

• Support of leadership

• Dr. Hsiao’s report

• Momentum

Thank yous

Distinguished Panelists

Families USA

Partner Organizations

Vermont’s leadership

You!!

Goals

Up to speed

Inside Scoop

Answer Questions

Build Network

Hear from You

Our Ambitious Agenda…

I. Background The case for reform How we got here National context

II. Health Care Design Options Dr. Hsiao’s charge What’s in the plans Impact on individual Vermonters Impact on business community Impact on medical providers

III. Q & A

IV. What’s next?

Poll # 1

The View from the Governor’s Office

Anya Rader WallackChief HC Advisor

Governor Shumlin

Anya is Chief Health Care Advisor to Governor Shumlin. A native Vermonter, Anya has a deep knowledge of state health policy, including Medicaid policy and the effect of national health reform on states.

Anya wore many hats during Dean Administration, serving as Policy Director, Deputy Chief of Staff and liaison to Hillary Rodham Clinton’s health care task force. She also served on the Board of Medical Practice in Vermont.

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Anya earned a bachelor’s degree from the University of Vermont and a Ph.D. in social policy from Brandeis University’s Heller School.

How Did We Get Here?

Anya Rader WallackChief HC Advisor

Governor Shumlin

• Insurance reform• Medicaid expansion – broad eligibility relative to other states• Creative use of Medicaid funds through a “waiver”• More regulation than most states – hospital budgeting,

certificate of need – but no effective cost control• Effort to transform primary care (Blueprint for Health)• Effort to create a interoperative network of computerized

medical records

Past attempts at universal coverage have failed. What’s different this time?

• Legislature passed Act 128 – requires consultant to develop three plans

• Dr. Hsiao delivered detailed plans yesterday• Commitment from Governor and legislative leaders to

move ahead with a single payer plan• Commitment from Congressional delegation to help us • Federal health care reform -- $$ to cover the uninsured and

create a single health insurance “exchange” within the state

Anya Rader WallackChief HC Advisor

Governor Shumlin

Where do we go from here?

• Digging into the Hsiao report to understand the details

• Identifying necessary reforms not addressed by the report

• 15-day comment period• Consultation with many groups• Governor and legislative leadership will work to

craft a bill and map out a legislative strategy

Poll # 2

Act 128: Building a System for Vermont

• Act 128 charged Harvard economist Dr. William Hsiao with developing three new health care models for Vermont

• Legislature directed Hsiao to design models for single-payer system and a public option; the third option was left open

• Hsiao’s third option – which he recommended to the

Legislature – calls for a public-private single-payer

system

The Ground Rules

The Legislature directed Hsiao to design systems that included:

• Universal coverage with common benefits

• Reduce waste and inefficiencies

• Move to an integrated delivery system

• Contain health care costs

Act 128: Design Parameters

• Maximize federal funds going to Vermont

• Contain no overall health care cost increases

• Use cost savings to fund reform

• Does not reduce income for physicians, hospitals and providers

Challenges to Reform

• Benefit package constraints• The budget• Legal hurdles: Medicaid, Medicare, PPACA, ERISA• Hospital profits• Payments to Physicians• Supply of providers and capacity• Universal Coverage• Operations

What’s the Buzz in Washington?

Kathleen StollDirector of Health Policy

Families USA

Kathleen is Director of Health Policy at Families USA, where she is the lead on health policy positions, analysis, and technical assistance to state advocates leaders.

Before joining Families USA, she served at the Center for Women Policy Studies – first as Director of Public Policy and then, as Director of the National Resource Center on Women and AIDS Policy.

Kathleen was also the Legislative Director for U.S. Congressman Robert T. Matsui, staff Attorney for the Committee on Human Services of the D.C. City Council and a Public Policy Fellow at the National Health Law Program.

Poll # 3

Kathleen StollDirector of Health Policy

Families USA

Kathleen StollDirector of Health Policy

Families USA

Vermont – The Decisions are Yours

• Exchange governance?• Small employer participation - up to 50 or 100?• Combine small group and individual markets?• Consumer friendly process for selecting coverage?• Financial help - ease of application and renewal?• Criteria for plans to participate in exchange?• Premium regulation and negotiation?• Innovative coverage models in exchange?• Expanded covered benefits? Standardization of benefits?• Choosing navigators?• Limits on -or- elimination of outside market?• Basic Health Plan Option? • And more!!!

Kathleen StollDirector of Health Policy

Families USA

Vermont – The Decisions are Yours(no reform is not a viable financial or moral option)

• Governance?• Consumer friendly entry?• Employer friendly design?• Financial help - ease of application and renewal?• Provider payment negotiation and regulation?• Provider payment reforms (ACA, etc)? • Delivery reforms? Innovative delivery models?• Any private coverage or private administration?• If private coverage, premium regulation & negotiation?• Expanded covered benefits? Choice of packages? Standardization of benefits?• Choosing navigators? (No system is simple for everyone)• Limits on -or- phased elimination of outside private insurance market?• Basic Health Plan Option? ACA waiver (timing)?• And more!!!

Get involved in these decisions!

Kathleen StollDirector of Health Policy

Families USA

Potential Federal Dollars on the TableUnder the Affordable Care Act

• Potential of $219 million in 2014 in premium subsidies

• Potential $283 million over 2014-2019 in Medicaid

(with only $8 million in increased state spending)

Kathleen StollDirector of Health Policy

Families USA

The Plans: What’s in All Three?

A Single payer: all $ through one channel

Savings: administrative, fraud & abuse

Benefits: Effort to standardize

Primary Care: investments & workforcePayment Reform: based on quality, not volume

Integration: Coordinating patient care

PPACA: Maximize federal dollars

Plan 1: Pure Single Payer

• Covers everyone!

• Administered by the state

• Everyone pays in to one fund

• Standard benefit package that emphasizes prevention, primary care and coverage for catastrophic illness

• Legislature decides budget and revenue

Savings in year 1: $520 million or 24.3% Dependent on federal waivers

Plan 2: A Public Option

• Will not cover everyone

• Preserves private market – state administered plan to compete

• Insurance exchange and premiums with tax credits and subsidies

• Market based benefit package

• Preserves deductibles – approx. $250-$1000

Savings: $330 million or 16.1% in first yearNot dependent on federal waivers

Plan 3: Single Payer Hybrid

• Single Payer: covers everyone!

• Everyone pays in (progressive payroll tax)

• State administers eligibility, subsidies and exemptions

• Competitive public/private bidding for processing

• Reimbursement levels and benefit decisions governed by an independent board

Savings: $590 million or 25.3% in first yearDependent on federal waivers

Poll # 4

VPIRG: What we’re watching for

Cassandra GekasHealth Care Advocate

VPIRG

Goals:

•Building a high quality, universal health care system that is affordable and sustainable over time.

Goal

To build a high quality, universal health care system that is affordable and sustainable over time.

What we are looking for?

• Consumer protection

• Adequate benefits

• Affordability at all income levels

• Access throughout changing circumstances

• Financial stability over time

What we already know

Cassandra GekasHealth Care Advocate

VPIRG

The Uninsured

7% of Vermonters have no health care coverage

Why?

Cost & Paperwork

The Under-Insured 15.7% have health coverage that does not meet their needs

Why?

Out-of-pocket costsCoverage denials & restrictionsInconsistent over time

Plans 1 & 3: Impact on Individuals & Families

Cassandra GekasHealth Care Advocate

VPIRG

• No more out of pocket costs!

• Lower average HH spending: up to $339 million

• Public input and independent appeals process

• Less paperwork

• Consistent coverage

• Better coordination of care and medical records

• Some may pay more, other less

• Benefit package limitations

Cassandra GekasHealth Care Advocate

VPIRG

Plan 2: Impact on Individuals & Families

• Same system, but lower premiums

• No guarantee: some uninsured

• Same total costs to HH but more benefits

• Less control over benefits

• Better coordination of care

• Same paperwork

• Consistent coverage despite employment

Key Questions We Must Answer

Cassandra GekasHealth Care Advocate

VPIRG

• What will our benefit packages look like?

1. Comprehensive: medical, mental, drugs, vision, dental, nursing home, homecare

2. Essential: Excludes nursing home/homecare. Limits vision and dental services.

• How much are we willing to pay?

• What is fair and equitable?

• How do think about quality?

• What type of care do we value?

Option 3: most “viable?”

Quick Question from audience

Poll # 5

VBSR’s: What we’re looking for.

Daniel BarlowPolicy Director

VBSR

VBSR has spent 16 years advocating for health care reform in Vermont.

We are looking for a health care system that:

-Provides universal access

-Decouples health care from employment

-Includes an equitable funding system

-Contains cost savings

What we already know

Daniel BarlowPolicy Director

VBSR

Vermont businesses are struggling with annual healthcare cost increases. The current system is simplyunsustainable.

VBSR polling from 2010 shows:

- Nearly half of our members spend the equivalent of 10% of payroll on health care benefits

- 20% of members spend up to 20% of payroll to pay for employee health care

- Some VBSR businesses are forced to cut benefits or ask workers to pay more

Plan 1: Vermont’s Employers

Daniel BarlowPolicy Director

VBSR

• Funds single-payer system with a payroll tax

• Total employer spending on health care decreases by $50 million in 2015 (essential) or increases by $340 million (comprehensive)

• Between 4,000 and 8,500 jobs created

Vermont’s GDP +$130 million-$340 million

Payroll exemptions: low-wage employers & workers

Plan 2: Vermont’s Employers

Daniel BarlowPolicy Director

VBSR

• Creates a public health insurance option with no new taxes• Total employer spending on HC decreases by $100 to $140 million• Between 1,200 and 3,000 jobs lost in Vermont• Vermont’s GDP decreases by $90 to $230 million•Project a net migration from VT of 500 to 220 people

Plan 3: Vermont’s Employers

Daniel BarlowPolicy Director

VBSR

• Funds single payer system with payroll tax•Total employer spending on HC decreases by $75 to $215 million• Between 4,000 and 5,000 jobs created• Vermont’s GDP increases by $110 and $180 million•Payroll tax exemptions for low-wage employers and employees

Key Questions we must answer

Daniel BarlowPolicy Director

VBSR

Who are the winners and losers in this new system?

Can small businesses with less than 10 employeesafford the costs associated with funding a universal health care system?

Are Vermont businesses willing to see an increasein payroll taxes to fund health care reform?

Quick Question from audience

Engaging the Medical Community

Dr. Michael ScollinsPhysician; Trustee

VPIRG

Dr. Scollins is a retired primary care internist who practiced medicine in Vermont for 35 years. He spent 20 years in his own practice at Aesculapius Medical Center in South Burlington, before joining forces with Fletcher Allen Health Care (FAHC) – a partnership that last an additional 15 years.

Mike is a former President of FAHC medical staff and spent time as one of their attending physicians. He also served as a Professor of Medicine and Pharmacology at UVM College of Medicine.

Mike has a special interest in cardiovascular prevention, adverse drug reactions, innovative models for health care delivery and cost control. He joined VPIRG as a trustee in 2010.

Poll # 5

What we already know

Dr. Michael ScollinsPhysician; Trustee

VPIRG

• The impact of the uninsured and crippled businesses

• Shortage of primary care physicians and an over supply of specialist

• $ linked to volume and high priced technology

• Cultural expectation of quality

• Disconnect on costs in public

• Vermonters are foregoing preventative care

Key Considerations for Providers

• Incentives to build Primary Care workforce• Changing reimbursement standards• Hospital budgets and curbing volume• Medical school role and physician training• What level of care to give when• Find ways to work together

Individual PhysiciansHospitalsMedical schoolMedical societyOther care providers

Dr. Michael ScollinsPhysician; Trustee

VPIRG

Key Questions we must answer

• What income changes are physicians willing to accept?

• How will reimbursement changes affect income and practice style?

• How do we reign in spending and still keep our hospitals viable

• What role does “healthy behavior” play in this?• How do we measure quality? (more data needed)• Will further costs curbs be needed?

• How involved are you willing to be?Dr. Michael Scollins

Physician; Trustee

VPIRG

It’s your turn…

Paul BurnsExecutive Director

VPIRG

Poll # 6

Timeline

• 2011-2012: Draft an pass a health care reform law that institutes a single payer system with integrated service delivery

• 2011: develop insurance exchange as dictated by the PPACA. Expand medical homes and blueprint

• 2012: develop state agency that would act as the single payer

• 2014: establish and insurance fund and prepare the appropriate state health agencies for going online with the full reformed single payer system in 2015.

Call to Action

• Thank you!Your input are essential to changing the system

• Vermont has a real opportunity to lead the nation in health care reform

• Big decisions sacrifices and gains: Make your voice heard

• Momentum to ensure success

Wrap Up/Thank you’s/Next Steps

• Comment on plans

• Talk to your legislators

• Letters to the editor

• Educate and engage your community

• Get involved with organizations:

VPIRG, VBSR and other partners

More resources

• Read the full Hsiao report online at:www.leg.state.vt.us/jfo/healthcaresystemdesign.aspx

• Keep up with VPIRG’s actions on health care reform here:

www.vpirg.org/issues/healthcare

• VBSR’s health care updates and actions are online here:

http://vbsr.org/index.php/pages/public_policy_blog/