Heading into the final four scheduled weeks of the session, the focus in Montpelier has turned back to our committee work, taking up bills passed by the Senate. In House Health Care, the biggest bill we’re received is a proposal to evaluate creation of a universally accessible primary care system. The original bill that passed the Senate Health and Welfare Committee laid out the steps to create a publicly-funded system, with no co-pays, that gave every Vermonter access to primary care. Its statement of intent included that this was to be a first step towards reestablishing a path to a full single-payer health care system. (Medicare coverage would stay as it is, but the state would cover copays.)
The Senate Appropriations Committee got cold feet over the financial viability of the plan and reshaped it to be an evaluation of options for creating universal access, but not necessarily through public funding. Supporters of single-payer were aghast at the change, and some [not all] are saying they would prefer no action at all. We are already being inundated with emails urging us to go back to the original version of the bill.
There are some huge underlying challenges, and a fundamental bottom line. Our health care spending is heavily controlled by the federal government. We take in so much in federal “matching dollars” that we actually receive more than what we pay out in taxes. In other words, our neighbors in other states are subsidizing us. So striking out on our own is not an option. That is a big part of why Vermont’s vision of its own single-payer system was doomed to failure. That is also what moved us into our current health reform initiative, the “all payer” model that uses a single organization (called an accountable care organization) to funnel money from payers into the health care system to make it more streamlined, with better coordination of care.
It wasn’t based on own choice to pick that system. The federal government set it up for its own Medicare program, and we latched onto it with Medicaid to try to align systems. As private insurers join in, it has some real potential for managing our unwieldy system. It’s in its infancy and it still hard to tell whether we can actually get the Titanic to shift course. Having put at least some of our eggs into that basket, however, raises serious questions for me about whether we can overlay a second major change on top of the first one while it is still just getting off the ground. The broad concept for the new proposal isn’t very hard to grasp: if the state funds primary care for all, everyone’s insurance rates go down – your insurance is left only covering higher levels of care – so the cost savings is transferred to the new system.
However, in the new all-payer model, the ACO is being paid to provide all health care, including primary care. A person is attributed to the ACO’s payment model based upon being the patient of a participating provider. If all primary care doctors became part of a single-payer primary care system, the ACO role might become superfluous for primary care, yet it would need to remain for everything else, plus coordinate between systems. The more that we increase the shuffling of money between different entities and payment mechanisms, the more some of it gets lost in the transactional costs. If the major focus is making sure everyone has access to primary care, another route might be to focus solely on those who currently don’t have access, instead of creating a whole new system. That includes those without insurance, but also folks who can only afford insurance with very high copays and deductibles.
There is very strong evidence that getting good primary care saves in overall health care costs. Illnesses are intercepted earlier and are easier and less expensive to treat. People stay healthier. The evidence is more mixed over whether copays are still a barrier to getting care even if they are low, and thus should be eliminated, or whether they are a protection against overuse of care. How much is it appropriate to have people hesitate (“Is this worth a $20 copay?”) before heading to the doctor? Obviously striking the balance is very dependent upon individual incomes (what percentage of your paycheck is that $20?) I’m not sure I buy into the idea that the ideal system would have no individual contribution at all for getting care – no “skin in the game.”
The bill that eventually passed the Senate includes evaluating the question of copays rather than starting with the assumption of a system without them and requires looking into methods other than a publicly-paid system to ensure everyone has access. Two questions will be before our committee. First: whether doing a major evaluation of options and mechanisms are likely enough to provide solid outcomes to be worth the cost. Second: whether we should be returning to some form of the original Senate bill and plunge forward with trying to make this happen, faster.
Legislative Update, Part 2
We are also grappling with the costs of prescription drugs. Specialty drugs are becoming the biggest new cost drivers. We heard data from Blue Cross Blue Shield that although these account for only one percent of the prescriptions written, they are 50 percent of the insurer’s pharmacy costs. These new drugs – you see the names like Humira and Enbrel on television ads -- are life changers for people with conditions that may have left them bedridden in the past. The costs, at least in part, are driven by the time and effort manufacturers put into developing them.
However, the whole arena of manufacturer pricing is kept in a black box. This year, we are taking a number of steps to try to push back. Three years ago we unanimously passed a first-in-the-country disclosure law that requires drug manufacturers to share information to justify the increases for the drugs with the biggest price jumps. The results were a bit disappointing because many of the answers were so vague. We plan to strengthen the bill this year.
There is also a bill to ban the “gag orders” that some drug distribution managers place on pharmacists, prohibiting them from telling customers about a lower cost alternative unless the customer directly asks.
The biggest initiative is to develop a Canadian import plan that would be organized by the state itself. Not every drug is less expensive there, but many are significantly cheaper. This would require receiving a federal waiver, but such waivers are directly permitted under the Affordable Care Act. An interesting aspect is that there is another state that is also aggressively pursuing this idea: Utah. Of particular interest, because Utah is one of the most conservative states, and Vermont one of the most liberal. The idea of teaming up on this is appealing!
There is a slightly more convoluted proposal the Senate has sent us regarding expanded bulk purchasing of drugs by the state. Since Vermont Medicaid already does this in a consortium with a number of other states, it isn’t clear what further gains this might bring.
Mental Health Care
Just a few weeks ago, my committee said in a memo that it was time for hospitals to step up to the plate and recognize the importance of equity in addressing mental health conditions as a part of health care. Somehow the state keeps being expected to be in charge of providing psychiatric hospital care. Now the University of Vermont Health Network is doing just that – stepping up.
Though the proposal is not at all fleshed out yet, it would be based upon a master plan for future expansion of the Central Vermont Medical Center that would include a new psychiatric inpatient wing. That would add desperately needed capacity for Vermonters who are currently often waiting for days, and sometimes weeks, in emergency rooms waiting for a hospital bed. It would also mean we would more of our statewide psychiatric care into the modern era for the standard of care, which is to be fully integrated with a medical center, since mental health and other medical conditions are so deeply intertwined.
We still need to do more intensive planning for interim capacity, because that plan, if it does gel, will be several years in the making. But it was welcome news to many legislators’ ears.
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