Vermont Health Care Briefing August 2014 John McClaughry

Destination: Single Payer History – movement began c1987 Legislation dramatically failed in 1994 Douglas vetoed another bill in 2005 Enacted as Act 48 of 2011 after presentation of Hsiao Report Will come to life in 2017 (if Federal waiver is obtained)

Single Payer Features: Green Mtn Care “Health care is a human right” – Shumlin “Health care is a public good” – Act 48 Universal – every Vermonter in Centralized government control – GMC Board Care is free at point of service (but 87% AV) All costs paid by taxpayers (but 87% AV) Global budget controls costs “Payment reform” to replace fee for service

Model: Quebec Medicare Province controls all health care - RAMQ Everybody in (except military and prisoners) Care is free at point of service – flash card Doctors and hospitals mostly private Doctors and hospitals price controlled Global budget controls costs Private contracting forbidden (until 2005, when Supreme Court overturned)

Results of Quebec Single Payer Government rationing Long waiting times for treatment Maddening bureaucracies Demoralized doctors and nurses Shabby facilities (restricted investment) Obsolete technology (restricted investment) Aggressive unionization Much higher taxation

Green Mountain Care Board 5 member board has full control over doctors, hospitals, and prices etc. Power over collective bargaining Power to determine “essential benefits” “Payment reform” ($45 m HHS Grant)

Vermont Health Connect Insurance Exchange created under ObamaCare act ($170 million HHS grant) Mandatory for Small business ( 50) in 2016 Can select from GMC approved plans Delivers income-tested tax credits to defray premium costs Disappears in 2017 when GMC terminates health insurance Rollout completely bungled

Single Payer: Exceptions Hsiao Report promised $580 m in “savings” But GMC won’t be single payer: excludes Medicare, FEHBP, Tricare, and almost certainly self insured companies – in all, 50% of lives Query: can “savings be achieved with half-single payer? Hsiao insisted on no-fault medical malpractice coverage; scrapped early by Shumlin administration

Single Payer: Medical Impact Hsiao Report assigned $50 million a year of “savings” to pay MDs and RNs to stay here The idea of those “savings” has long been abandoned Limiting payments to MDs and RNs to stay within “global budget” means doctor shortage Fewer providers, less technology, long waiting times = reduced quality of care

GMC: Key unanswered questions Financing: how raise $2 billion to pay for? Eligibility: how prevent Vermont become the Shrine of Lourdes for the sick and poor? What happens when providers use up their “global budget” allocations? Will DHMC and Albany Med Center etc accept cut rate payment for VT patients? Which hospitals will be closed?

Resources See handout for “Basic resources for understanding educational finance and health care issues” See handout for “Informed Citizen Questions on the Issues of 2015” For state fiscal issues, visit Joint Fiscal Office ( Visit for reports and commentaries on current state issueswww.ethanallen.org