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
Pharmacy Costs
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.
***
Please stay in
touch as you hear about issues affecting you and to keep me informed about your
views.You can reach me at adonahue@leg.state.vt.us. Thank you for the honor of representing you.
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