Art Edelstein of East Calais is a Senior VBM writer, free lance journalist, college history professor and author of two books. Information about his writing can be found at www.sover.net/~artedel/write.html(link is external) By Art Edelstein. Vermont Business Magazine. May, 28, 2010 _ A multi-part health care bill (Senate 88) became law yesterday when Governor Douglas declined to either sign it or veto it, thus letting it become law without his signature. The health care bill, S88, passed both houses of the Vermont Legislature on May 11, the last day of the 2010 session.The legislation would support aspects of the state’s ongoing attempt to keep health care costs in check and lead to universal access for all Vermonters. However, two provisions of the bill irked the governor enough to cause him to threaten a veto, instead he chose to let it become law. Once a bill reaches his desk, the governor has five days to sign it into law or veto it. If he does neither, the bill becomes law without his signature at the end of the five days.Douglas main concern with the bill is with the provision to create a commission, which would be charged to come up with three designs of a new health care system for the state with the goal of universal access to health care. The governor said the issue has already been studied and the $250,000 price tag was unnecessary. (details of the bill can be found be clicking HERE)The second concern was over disclosure of free drug samples given to doctors by pharmaceutical companies. Some senators had opposed the measure because they feared doctors would be reluctant to offer samples to needy patients if the reporting of these samples to the Attorney General’s office was included in the bill a provision Douglas does not like. Vermont is recognized as a national leader in health reform, we are the healthiest state in the nation and we are in the midst of implementing significant changes from the federal health care reform bill, said Governor Douglas. To spend time and money studying a new model that cannot be implemented until at least 2017 is counterproductive. Further, the drug sample reporting provision adds burdensome new regulations that are unnecessary and could make it difficult for low-income Vermonters to receive needed medications. These sections do not represent meaningful reform; rather they detract from the serious work ahead.But, aspects of the bill did appeal to the governor including capping annual hospital budget increases, and expansion of the Blueprint for Health program, a management initiative started by his administration that focuses on chronic care issues. The Blueprint is key to our efforts to control care costs over time by helping to improve the health of Vermonters,” Douglas said. Expanding the Blueprint to more communities extends Vermont s national leadership, and positions Vermont to take advantage of the federal health care reform law.Speaker of the House Shap Smith said: S.88 builds on Vermont s strong foundation in health care, said Speaker Smith. The federal health care bill recognized that states could move forward to address concerns about financing of healthcare and this bill will do just that.Politics was at play here as Senator Doug Racine D-Chittenden, the chairman of the Senate Health and Welfare Committee, who had made the bill the cornerstone of his legislative session, is also seeking his party’s gubernatorial nomination in a crowded, five-candidate primary field.The bill that passed included provisions from several of the other health-related bills on the agendas of both houses. In all 174 pieces of legislation had been written and submitted, which, at a minimum, shows the concern that health care now garners in the public forum. This is an important piece of legislation. We are in a health care crisis in this state and in this country, Racine said after passage. The bill’s passage is expected to enhance Racine’s message in the upcoming summer primary campaign against his opponents. Vermont’s efforts to keep health care costs in check and the problems we face as a state in insuring as many citizens as possible were highlighted in the introduction to the House version of Senate 88.According to the language written into that section of the bill: The cost of health care in Vermont is estimated to increase by $1 billion, from $4.9 billion to $5.9 billion, by 2012. Vermont s per-capita health care expenditures are estimated to be $9,463.00 in 2012, compared to $7,414.00 per capita in 2008. The average annual increase in Vermont per-capita health care expenditures from 2009 to 2012 is expected to be 6.3 percent. National per-capita health care spending is projected to grow at an average annual rate of 4.8 percent during the same period. From 2004 to 2008, Vermont s per-capita health care expenditures grew at an average annual rate of 8 percent compared to 5 percent for the United States.Further, states the legislation: Vermont s health care system covers a larger percentage of the population than that of most other states, but still about 7 percent of Vermonters lack health insurance coverage. In 2008, 15.4 percent of Vermonters with private insurance were under insured, meaning that the out-of-pocket health insurance expenses exceeded 5 to 10 percent of a family s annual income depending on income level or that the annual deductible for the health insurance plan exceeded 5 percent of a family s annual income. Out-of-pocket expenses do not include the cost of insurance premiums. Most Vermonters are a job loss away from being uninsured. The struggle is how to maintain quality and reduce cost without sacrificing quality, explained Pat Jones the Director of Health Care Quality Improvements at BISHCA, the state health regulator agency. Paulette Thabault, the commissioner of Health Care Administration at BISCHA, said the provision for a commission in Senate 88 will look at health care costs as costs in Vermont that are rising faster than the national average and that would be unsustainable. She explained the commission provisions saying health care is a public good and the goal is to make universal access. This is not a push for a single-payer system, she emphasized. Currently, she noted, Vermont has a Health Care Reform Commission, but the new bill makes changes to the makeup of that commission.Under the new legislation the commission is charged with hiring a consultant who would be charged with designing three options for implementing a system of care that provides universal access. As stated in the bill, one design needs to be a single payer system, one a public option, and the third design is not yet known.Also, the bill improves the Blueprint for Health by expanding the number of pilot programs and payment reform to the insurers, all in an effort, Thabault says, that aims at coordination of care. Other cost containment in the bill, she said, directs BISHCA to keep pressure on hospital budgets. There is also a call for greater transparency in the system for rate increases. The bill will study the health care workforce to help guide staffing levels for the kinds of providers the state needs.The legislation was designed to be budget neutral, as there are no taxes or fees in the bill that might impact business. In the long run, this legislation and its intended outcomes, said Thabault, would slow down the effective rise of the cost of health care. As she sees it, If you can bend the cost curve, insurance costs won’t rise as much. If the measures can contain costs, everyone would benefit.With the new federal health care legislation still being digested at the state level, and its effects on state health care programs and legislation under evaluation, Thabault cautions that any new legislation has to be put in the context of the federal reform. We want to be in step with the federal level. We want to take advantage of the opportunities for us to have affordable accessible high quality health care. It is complex, even though you want to do it now you have to go through the process.Vermont’s two health-related associations, the Association of Hospitals and Health Systems, and the Vermont Medical Society, have issues with aspects of S88. Bea Grouse at VAHHS said newspaper reports that the new legislation capped annual hospital budget increases, was wrong. This is not a cap, it’s a target, she explained. The bill that passed sets net revenue targets of 4.5 percent for 2011 and 4.0 percent for 2012. The BISCHA commissioner, she explained, will look at the rates set for each hospital and will look at programs to determine growth. BISCHA works individually with hospitals, said Grouse. She doesn’t see statewide caps as a sensible approach to rising hospital costs, as every hospital is in a different financial situation. According to her, there are lots of moving pieces.VAHHS does recognize that hospitals have to do whatever to contain costs and pricing increases. We get that, said Grouse. What she argues is that hospitals haven’t had a Medicaid increase in four years and continue to absorb larger losses from the state’s failure to increase those payments. Hospitals, she emphasized, are 24/7 operations and take all patients. The only way to make up losses is to reduce expense and to cost shift them so they can recoup some of those losses. We work hard to cut costs and restrain growth.Grouse likens trying to reform our health care system to fixing the plane while flying it. The state says to fix the plane twice as fast but is not putting gas in the tank.Other parts of the bill are supported by VAHHS including the expansion of the Blueprint for Health. As to the design study that the governor had issues with, Grouse said it may give us more information on how to conduct reform but it won’t do a single payer and we don’t support that.Grouse agrees with Thabault that understanding the new federal health care legislation is also important and that no state, including Vermont, can afford to go off in a direction not in alignment with federal law. The possibility of Vermont having a single-payer health care system, Grouse said, is not based in reality.Overall, said Grouse, S88 gets a grade of C from the association.Paul Harrington at the Vermont Medical Society said S88 was a comprehensive bill with 10 distinct provisions, but the issue of great concern to his membership was the one that would require the disclosure of free drug samples given to doctors by pharmaceutical companies. Sample recipients would have to report this to the office of attorney general. Once the information is collected it could go out on a database to researchers, but the name of the physician is deleted. Harrington said VMS raised concerns with the release of prescriber information.The thinking behind this section of the bill is that the Legislature believes drug companies are giving out free samples so physicians will prescribe these drugs, which are brand names and this is a form of unfair marketing. The Legislature also understood, said Harrington, that doctors use these samples for low income patients and to test out whether the drugs will work.VMS wanted names of receiving physicians stricken from earlier versions of the bill because drug companies would know who was getting the samples and this could have a negative impact on marketing. VMS also opposed having information publicly available as this might lead to drug break-ins at offices. The Legislature took our advice about not having the information publicly available on line, he said. With these changes VMS did not take a position on the whole issue of reporting of free samples to the Attorney General’s office. Harrington said there is a parallel in the federal drug bill where drug companies will have to report to the Secretary of Health and Human Services about free samples. Harrington was unsure why the governor might want to veto S88 based on this sample drug provision.As to other sections of the bill, Harrington said VMS did not take a position on the commission. However, he said, The passage of federal bill answers how people will get their health insurance and how subsidies will be provided, and thus answers the questions this commission will be delving into. Much of what the commission will be looking at has already been addressed by the federal legislation.VMS also strongly supports statewide expansion of advanced medical homes under the Blueprint for Health and a committee formed to address the shortage of primary care physicians in the state.The Overall Health Of Vermont’s Health Programs Is Good Vermont has been ranked #1 in terms of health care and healthy Vermonters for several years by a number of assessments. According to Susan Besio director of the Office of Vermont Health Access, which oversees all the Vermont Medicaid programs, indicators like kids immunizations and the number of insured gauge our overall health quality. Besio’s office oversees VHAP, Dr Dynasaur, and the premium assistance programs for Catamount Health. Based in Williston, she is state director of health care reform.Catamount Health, touted when launched in November 2007 as a way to reduce those who could not get insurance coverage through private insurers, has enrolled 11,500 Vermonters. An additional 31,000 are enrolled in Medicaid and, said Besio, this is positive. The state’s uninsured rate has decreased from 9.8 percent in 2007 to 7.6 percent which she said is significant. The reason the rate remains above 7 percent, she explained, is that the lower the uninsured rate the harder it is to reach people not insured. Most likely there is a reason for that remaining percentage not purchasing insurance. Cost or the belief that insurance isn’t needed is driving this percentage of uninsured. On a much more positive note, the uninsured rate for children is down from 4.9 percent to 2.9 percent.Catamount has been very successful, according to Besio. The insurance program was begun to reduce the number of uninsured in Vermont and at that time half of those were eligible for existing programs but had not enrolled.But, admits Besio, problems remain with the Catamount model. Cost is a primary factor and she admits the product is still pretty expensive at full cost. While the plan has low out-of-pocket costs, she believes those who are considering the plan look at premium costs of over $400 per month and get sticker shock. Also, Catamount has had riders or preexisting conditions, although these should go away with federal health care reform.Vermont’s Medicaid Program will be impacted by the new federal health care legislation. Initially, said Besio, Medicaid here will lose several million dollars that the feds will take back in pharmaceutical rebates that the state kept prior to the passage of the new legislation.However, with so much to digest in the new legislation, said Besio, her office was still analyzing the fiscal impacts for outlying years. On the positive side, the federal legislation has several provisions to increase the health care work force, and a number of provisions that focus on prevention and wellness. There is support for medical homes (in the Blueprint for Health) and provisions to get rid of preexisting conditions and lifetime conditions in insurance, which will ultimately provide people with better care in the long run.Complaints about Medicaid come from providers who say reimbursement rates remain too low, while individuals want more coverage. For her part, Besio agrees. Our provider rates are lower than Medicare and commercial insurance rates. Yes there are things we don’t cover. We are a state and federally funded program and the Vermont Legislature has a say as to how much state funds cover, and what is provided, she said of the state’s Medicaid restraints.While there are problems and issues that continue in the state’s health care programs, the overall assessment is quite positive said Besio. I think we are a state that really cares about the health of our citizens. We have had some very progressive programs for decades and the physical environment encourages healthy living. The biggest challenge, she agrees, is in trying to control the cost of health care as, it affects every component of the economy and individuals affording insurance.She understands that for business a major cost for is health care insurance. The Blueprint for Health will help, as will health information technology part of state and federal reform as all will bring down costs and the focus is on prevention and wellness which are long term strategies. With better tools such as databases, health care professionals and those who administer the programs are better able to focus on where and what the major cost drivers are.Blueprint For Health A Positive Step For Vermont Health Care Vermont’s four-year old pilot program the Blueprint for Health has drawn positive marks from all the players in the health care debate. In 2006 ACT 91 set up the framework for the blueprint which is seen as an integrated health system, and pilot projects began in 2008. With the Act, the state set in motion how health care was to be improved, and that includes strategies for delivery.However, cautions Dr Craig Jones the director of the program, this is not a state run plan. Funding for blueprint teams comes from grants by the state, but the program is designed to be sustainable. The Blueprint budget costs just over $4 million annually and draws on both state and federal dollars. He calls the blueprint a change in the way health care is paid for. The program is about primary care and prevention and there are negotiated agreements with insurers to pay for primary care and prevention.The blueprint established primary care medical homes, which are primary care practices evaluated against national standards. This can be a health center (such as the Health Center in Plainfield). Jones said the Blueprint has a financial and clinical model of operation with medical homes and community health teams. It took some discussion with insurers to pay for this, the whole person approach.For insurers investing in the Blueprint there will be offsets in reduced hospitalizations and reduced emergency care. Jones and his team have estimated and modeled out for the future the cost savings. We expect in three to five years a 12 to 15 percent reduction in available hospitalizations and emergency room visits. With the Blueprint, Jones sees the state transitioning to an approach that promotes health and wellness…that will lead to reduced costs. According to this approach, We are reducing what we pay for poorly controlled disease.Currently three pilot communities in St Johnsbury, Central Vermont and Burlington are operating. They include 12 practices and 58 primary care providers. The pilots test how well the program works and what refinements are needed. While this is a national program and Jones said our state’s pilots are considered the most complete approach.Since these are pilot programs, practitioners and administrators refine as they go, measure impacts, and constantly improve their methods. The cost to run the program is based on administrative, evaluative, and health information technology needs. Jones said the bill that recently passed the legislature, S88 should bolster the Blueprint. By 2011 he predicts an assessment of early trends on the impact of the program clinically and financially. This could help move the Blueprint For Health from pilot to program. Jones said it could steadily roll out across the state and could take 18 months to two years to reach all corners of Vermont. Most or all primary care practices would be involved and they would be supported by an estimated 32 community health teams that would be supporting the primary care medical homes. In the final assessment, said Jones, the blueprint leads the change. We don’t run the practices or community health teams, but we’re helping to lead the transition and the process of change.