Watch Out for the Buzz Words in Green Mountain Care

            The Vermont legislature has laced the new single payer health care bill with a lot of Orwellian words and phrases that upon close inspection have  negative implications for the future of health care for us Vermonters.

Accountable Care Organization (ACO).  This is the government’s version of the Health Maintenance Organization.  The ACO is supported by the same people who opposed  HMOs in the 1990s.  All Vermonters will be assigned to an ACO most likely based upon geographic considerations, proximity of hospitals, clinics and other health care providers.  Providers will be employed by the ACOs.  The ACO will put everyone in a government prescribed health care organization whether they like it or not, and force a move away from individual to group health care.

Pay for Performance (P4P).  Under Green Mountain Care health care providers are to be paid based upon a number of criteria applied to accountable care organizations.  For instance, an ACO will be considered to be doing well if it controls costs by operating within its assigned budget, if hospital readmissions are kept to a minimum, and if overall outcomes meet  standards determined by the government.  In the event the State bureaucracy determines that an ACO is doing well, it will allow for bonus payments to physicians and other providers.  “Doing well” means staying within budget. It does not mean providing appropriate health care for individual Vermonters.         

Out of Network/Cross Border Care.  The new health care bill mentions these issues in passing, noting only that they will be dealt with at a later date.  Dr. Hsiao said in his report that there will need to be disincentives for people who wish to obtain care outside of their Accountable Care Organizations.  If disincentives to receive treatment out of state, as Dr. Hsiao recommends, are placed into Green Mountain Care,  then those of us  who live on the eastern side of our State will be discouraged from going to  Dartmouth Hitchcock in Hanover, NH or to a specialist in Boston.   We do not yet know what those disincentives will be, but they would range from requiring Vermonters to pay more for out of state services to refusal to reimburse Vermonters for out of state treatment.

Global Budgeting.  Global budgeting amounts to the imposition of an overall health care budget by the State of Vermont.  It is meant to control costs.  Its effect will be to limit the availability of individual health care options.  For example, , high cost diagnostic options involving new and effective imaging technologies will be curtailed.  As applied to Accountable Care Organizations the incentive will be to spend less on health care for its member population in order to meet budget targets.  

Evidence Based Medicine.  Government run health care will seek to control costs by establishing treatment protocols for various health care issues.  Approved protocols will be based upon health outcomes for large populations with the same basic diagnosis.  This will interfere with patient/provider relationships to the extent that it limits treatment options and fails to recognize that every individual is different.  When most of us go to doctors we expect them to exercise their professional judgment on our behalf without being constrained by limited treatment options.

Basic Benefit Package. Under Green Mountain Care, the basic benefit package is to be determined by the five person Health Care Reform Board.  No one knows at this point what will be included, but it will be subject to change every year.  The concern is that in years of tight budgeting, the basic benefits available will be cut back.

Wrap Around Insurance.  Dr. Hsiao, in his report to the legislature acknowledged that the basic benefit package to be offered in the State’s single payer system will likely not meet the needs of many Vermonters.  Therefore it will be necessary to purchase additional insurance from private insurance carriers to cover needs not met by the State.  We should be concerned that no one has identified the cost of these policies, and no one has determined whether insurance companies will even be interested in offering them to fill the unique needs of the tiny population of Vermont.     

Provider Tax.  This is a tax levied upon providers including hospitals. It was raised in the current legislative session from 5.5% to 6.0% of revenues.  The rationale for increasing this tax was to leverage higher reimbursement rates from the Federal government for Medicaid.  The effect is to increase the cost shift to private payers which will increase the cost of insurance to all of us who pay premiums.  The logic of this tax is questionable because it actually increases the cost of health care to Vermonters. 

Cost Shift.  Medicaid and Medicare consistently underpay for health care services provided by hospitals and other providers at rates that typically run at 50% to 60% of cost.  The difference is largely made up by private health insurance companies and by private payers.  This is the cost shift. When we complain about the dramatic increases in health insurance premiums, we need to keep in mind that the root of the problem is underfunding by the State and Federal governments.