Vermont pursuing single payer reform

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Under Act 128 passed last year, Vermont is considering implementing a single-payer health care system for their state. The much-awaited consultants’ report outlining options was released Wednesday. One option is very similar to CT’s SustiNet plan.

The report outlines the cost and quality pressures that led Vermont to consider a single-payer plan including fragmentation of care, cost shifting between payers, skyrocketing costs, economic burdens, and rising consumer debt levels – all common to other states. The report outlines federal barriers and opportunities to support a single-payer option. The options had to provide coverage for every state resident and fund the costs of covering the uninsured and underinsured with savings from the reforms. They propose a timeline with full implementation in 2015.

The first option includes a government-run system covering every state resident with one insurance fund and a standard benefit package funded by employer and worker contributions. The legislative budget process will define the fixed global budget for the system. The option also includes plans to expand primary care provider capacity and encourage wellness programs. This plan is estimated to reduce health spending by 24.3% between 2015 and 2024.

The second option is very similar to our SustiNet plan. This alternative creates a public coverage option within Vermont’s insurance exchange, but all claims payment and administration, across all payers, would be funneled through a single source. The public option plan would be government-administered and would compete with private plans in the market. It is estimated that this option would save 16.1% of health spending.

The last option is similar to the first, but instead of being administered through government, this option would be governed by a public/private board. The hope is that this structure will insulate the system from political pressures around coverage and payment rates that have posed barriers to cost containment in other systems. This option is estimated to save the most at 25.3%.

Savings among the three options result from reductions in administration, fraud and abuse, waste and duplication, implementing integrated delivery systems (Accountable Care Organizations), health information technology and medical malpractice reforms. Options one and three include uniform payment rates for providers across all payers and all options envision a move to risk-adjusted capitated payments for providers.

The 138 page report is very detailed and Vermont-specific. Interesting reading.
For background on payment reform, including Accountable Care Organizations, go to CSG/ERC’s Value over Volume report.
Ellen Andrews