Legislative Update, April 27, 2019

This session is unusual in terms of the progress (or lack thereof) of major bills. We should be having some long days on the floor by now, debating some of the larger issues on bills that already passed the Senate and are coming out from House committees.

It hasn’t happened, and nothing is even teed up for action in the week ahead.

That means either we will be having some really late nights in the final two weeks of the session, or some major bills are going to be held over for next year.

At the end of a two-year biennium, everything dies and must restart in a new session. Since we are in the first year, anything that doesn’t pass stays where it is and can continue on its path next year.

***

In my Health Care Committee, we are grappling with a topic that I feel some passion about.

I’ve been here long enough to have seen two previous occasions where we threatened to break, or did break, a promise to Vermonters about the privacy of health data that the state was collecting.

Early in the opioid crisis, we created a statewide prescription database. You have no option about being included.

But we premised it on an absolute standard: we were creating this for health intervention, to help doctors identify those who might need drug misuse treatment or need to be blocked from further prescriptions.

It was not being created for law enforcement purposes, and we were explicit about that.

A mere four years later, the Senate waged battle to open the database up for police investigations. The House held firm (we would have approved if there was a warrant requirement), but it was a bitter fight.

In earlier years, a data base had been established to keep track of numbers and avoid duplication related to people with an HIV-positive status. The privacy commitment we made was that the data would be held between double-locked doors (figuratively.)

Then the federal government came along and said that AIDS funding would be conditioned upon access to the data with only one lock on the door. AIDS service groups supported the change because it preserved important funds.

Advocates, however, begged us not to break the promise made. We did it anyway.

Once you create a data monster, it is difficult to preserve the guarantees made as the basis for getting support for the data base. It’s too late to not create it.

So now we come to today’s question.

Your health care records are gathered – without your consent – into a state health information exchange (HIE). It’s an electronic data base for purposes of access to medical information among doctors, and it is an important system to ensure best-quality care.

Folks like the ACLU were pretty concerned when we created the Vermont HIE back in the early 2000s as part of a federal initiative to improve electronic transfer of health information.

So there was a very important agreement. The records would be gathered, but could not be accessed unless patients signed an informed consent.

The only exception was in emergencies with an unconscious patient. A “break the glass” system allows access to doctors without consent in those situations.

Your primary care doctor is supposed to give you information about the HIE, and ask you whether you agree to allow your providers (only the ones involved in your care) to be able to access those records.

This is called an “opt-in” system: you choose whether to opt to be in the system, as a benefit for your care.

The vast majority of Vermonters who have been asked have said “yes.” They see the benefit of not having to be asked to sign consent every time one doctor needs to get access to records from another.

But we have a big problem with our HIE. It is so underutilized that its value is impaired.

The state has poured millions of dollars into the system over the past dozen years, but doctors have little faith in it. There are problems with avoiding record duplication or record mis-matches between people with similar names, for example.

A big part of the problem has been dysfunction of the legal entity the legislature created to run the system. It’s a non-profit named VITL (Vermont Information Technology Leaders.)

Last year, we finally came to grips with that dysfunction, and gave VITL a year to clean up its act or be defunded. It would have been a difficult threat to enforce, because starting all over would have been mega-expensive.

VITL has begun to get into shape, but has come back, with the support of a legislatively-established work group, identifying a major obstacle to success.

The “opt-in” system, they report, is not working. Only xx% of Vermonters have been asked to consent. The system, as built, is too cumbersome for doctors to engage their patients in the consent process. And without most people on board, the system can’t work effectively.

VITL wants to shift to what most other states do, which is called, “opt-out.” This means your records (the ones we’re already collecting and storing) automatically become available to any of your providers, unless you take the initiative to say, “no, I do not consent.”

As currently planned, you won’t even be informed directly that you have the right to opt out. You’ll have to learn about it through public education efforts. (Maybe there will be a poster in your doctor’s office.)

It’s important to note that the vast majority of Vermonters – xx % -- consent to their providers having access, when asked.

But it is not only the rights of the minority who do not want to consent that are at stake here. It is your right to giving direct informed consent, even when the answer is “yes.”

The decision to create the system and gather patient records was created in statute, but the concept that there had to be informed consent for disclosures was an underlying assumption and not written into the law.

What that means is that if the legislature is silent on the issue this year, the decision to shift to an opt-out system (you won’t be told about it, but will have to say no if you don’t want to be a part) will be made by the independent Green Mountain Care Board, which has already signaled its intent to approve that shift.

The big, underlying philosophical question is who actually owns your medical information? Or the control of it? You might be surprised to know that hospitals and providers will assert that they own it (because they created the records.)

That would be consistent with federal law, but some states – New Hampshire, for example – have said that patients own their own information.

I believe it is critically important that the opt-in/opt-out decision be made by the legislature, accountable to Vermonters, not by an independent body.

It might well be that we have to agree to the change, but it would at least position us to set standards, such as a requirement that patients be directly informed about the existence of the HIE and their right to opt out.

We don’t have time left this session to fully sort through these issues, but I think we can survive another year without making any changes.

So I’ve drafted language that would delay any action by the Green Mountain Care Board by a year, and would establish a legislative study committee for this summer and fall to hold public hearings and dig more deeply into the question of whether, and how, the change might be made.

That committee would make recommendations to us in January so that we could make a more informed decision about how to proceed.

We’ll be discussing – and likely finalizing – a decision about proposing this approach to the Senate sometime in the coming week. If it is important to you, you might want to reach out to your Washington County Senators to urge their consideration.

***

The only other major action in our committee has been our response to a Senate bill that would license ambulatory surgical centers that are not a part of a hospital.

We haven’t licensed them before because they haven’t really existed here, though they are common (and licensed) in most other states.

We’ve had only one for a number of years – an eye center in South Burlington – but now have a new one about to open in Colchester for general surgery.

The new center has been intensely controversial. In concept, it would be obvious that surgery that does not need a hospital setting to be done safely should be available outside of a hospital. It can be more accessible and less expensive, since it has less overhead.

However, Vermont’s small size creates a distinctly different health care system, and our current dysfunctional payment system complicates things immensely.

Hospitals are not paid based on the actual cost of providing a service. They are paid on a fee schedule based on what insurers are willing to pay and what will total up in the end to balance their budgets.

Those budgets are highly regulated and tightly controlled by the Green Mountain Care Board.

They also must accept payment from Medicaid and Medicare, regardless of how short that falls of actual cost.

As a result, there are two cost shifts. One is well known: private insurance (and thus, premium payers) are charged more in order to offset the state and federal underpayment.

The other occurs within the hospital operations: some services make money; others lose money. The hospital uses the revenue-producing services to fill in (and be able to provide) the revenue-losing services to their communities.

Surgery is a big revenue-producer.

Thus, these private, for-profit surgery center can charge less than a hospital for the same surgery that the nonprofit hospital offers. If it draws surgery away from hospitals, they lose the ability to shift revenues to pay for other services needed by the community.

That problem would worsen significantly if the surgery centers also turned down Medicare and Medicaid patients.

There was a big temptation in our committee to place major regulations on the surgery center model to prevent damage to financial stability for our hospitals.

We considered, for example, requiring them to go through the same intensive Green Mountain Care Board review of their budgets.

That would have been overkill, because their budgets are a drop in the bucket in comparison. It could have put them out of business, which would not be a fair outcome in terms of access to care for Vermonters.

They also have been willing to agree to accept Medicare and Medicaid.

We settled on a licensing bill that will require Department of Health safety oversight, and will also monitor data on how they perform and how they impact the overall health care system in Vermont.

I will be presenting the bill on the floor next week.

***

It is truly an honor to represent you. My back legislative updates are available at representativeannedonahue.blogspot.com. Please contact me with your concerns and thoughts; I’m best reached via email at adonahue@leg.state.vt.us.

Legislative Update, April 13 2019

Legislative Update

Representative Anne Donahue

April 13, 2019

The family leave bill was voted out of the House last week, and we expect the minimum wage bill to be coming our way soon. How soon, and why the foot dragging on the House side?

The old expression is that in the final weeks of the session (and we are down to roughly four), every bill becomes either a hostage or a Christmas tree. A Christmas tree is a bill that is full of “ornaments.” It is held back to add last minute issues, even if they are only marginally related to the original bill, because the deadline has long passed for new bills. Sometimes the ornament is an entire bill that the House passed, for example, but the Senate has not taken up. So the House tacks the entire bill onto a Senate bill that is still in play on the House side, to force the Senate hand.

A hostage is the reverse situation. If my committee has a bill from the Senate that we know the Senate really wants (and we don’t consider essential), but the Senate isn’t acting on something we passed and really want, we can hold onto its bill until the Senate acts on ours.

Yes, this is pure politics. Politics, but not necessarily partisan politics. House and Senate are both controlled by the same party, but still sometimes have different priorities.In an ironic example, House Democrats fought to pass the heating fuel tax increase to support the home weatherization fund over the strong objection of House Republicans, who felt that it hurt low income families because a sales tax is not proportionate to income. Senate Democrats are now saying they do not want to pass the bill, because it hurts low income families.

The Senate passed its high-priority minimum wage bill early in the session. The House has now handed it its family leave, high-priority bill to the Senate. There is almost undoubtedly a discussion going on at leadership levels about who will move first on which bill.

***

Paid Family Leave

At first blush, paid family leave sounds like absolutely the right thing to do. Several other states have this type of state-sponsored insurance program that covers a percentage of salary if someone needs time for family illnesses or a new baby. Virtually all European countries have done this for years.

The crunch always comes to the cost, and who pays. In Europe, for example, it is usually tax-funded, and income taxes can be 50 percent or higher for the broad social safety net in some countries. The Vermont plan is more generous than the other states that currently offer it (a higher percentage of wage reimbursement, more time off, etc). That will mean it will cost more, and also that the long -term cost is more unpredictable, since we can’t build assumptions based on the experiences elsewhere. It isn’t a pure math equation. Whether more people will use the program because of the higher wage reimbursement, for example, is an unknown.

Then comes the question of who bears the cost. The House bill makes it a mandate for all employees to participate. The nearly $80 million cost (at current guesstimates) will be paid through a payroll deduction. It’s insurance that every individual wage earner is mandated to purchase. There is a core inequity, though, for small business employees. Their employers are not required to hire them back after a leave. (Large businesses do not have to hold a job open, but must give the next available position to a returning employee.) That makes it a big gamble, and less attractive, for those who work for a small business. Sure, you get 90 percent of your salary for the six weeks of leave, but then you’re out of a job. However, you have to pay the same payroll tax as those who face much less of a gamble if they access the benefit. In addition, you will pay this even if you have a summer job as a student, for example, with no eligibility to access it at all.

For those who voted “no” (mostly Republicans, but some Democrats), the biggest issue was about state priority needs. Even though it is insurance rather than a tax, it is still $80 million coming out of the pockets of Vermonters. Is creation of a family leave program the highest priority, if we think Vermonters can pay out $80 million more? One legislator who sits on the House Appropriations Committee, and lives and breathes the budget challenges in meeting the needs of Vermonters, explained her vote by saying, “The $80 million price tag for this bill is way out of proportion to our other critical needs in higher education, environmental protection, and human services. For this reason, I voted no.”

As someone who sits on the Health Care Committee, I would add an even higher priority to that list: access to health care, which is one of the greatest areas of inequity in our state. Some people pay exorbitant costs for health insurance that still leaves them with high co-pays and deductibles. Others have employer-sponsored plans that cover virtually everything. And while we cover the needs of the very poorest Vermonters through Medicaid, we underpay the services we buy for them, so those costs get distributed inequitably among insurance purchasers instead of among taxpayers. With only a portion of that $80 million, we could fill in some of the deepest ravines of those inequities.

There is another more discrete systemic problem with the family leave program we passed. Employees must buy the coverage, but employers can pitch in if they wish – at any level, from five percent to one hundred percent. That can make it a job recruitment and retention tool, some argued on the House floor, by competing for employers based on how much the employer contributes to the premium.

I absolutely cringe when I hear this. After World War II, when a wage freeze was in effect, employers began competing instead by offering to provide varying levels of health insurance.  That was the birth of our system of employer-sponsored health insurance, recognized by most health analysts today as the accident of history that created our gross inequities in health care access. So we now want to create a new benefit – being defined as essential, since it is mandatory – which will create gross inequities in who pays how much, depending upon what an employer contributes? How soon we forget!

I don’t question the value of this benefit. I saw it within my own family when my brother, who is from New Jersey where paid family leave exists, was able to take a long series of 3- to 4-day weekends to commute to Northfield to be with my mother in her final months. But whether, and how, we can pay for it, and whether it is our highest priority, is the issue. And for those wondering, I do not support the governor’s alternative, either. Making it voluntary, with voluntary employer participation as well, worsens the fundamental inequities. I suggested that alternative in last year’s debate, but have reconsidered the core policy issues.

***

Minimum Wage

That leads rather directly into a fundamental problem I see with the entire discussion of increasing the minimum wage. I think there are valid arguments both pro and con for this initiative. While the “pros” are fairly obvious, the “cons” are important: will we sacrifice jobs for some, in the effort to improve wages for others? Will the increase in prices offset increased wage – since the money has to come from somewhere, which means it will come in the costs of goods and services?  Will those who benefit actually lose, as they fall off “cliffs” for eligibility for benefits such as child care subsidies, thus lowering their household income? All those risks are very real and have been deeply analyzed, with no truly dispositive answer in either direction. It’s a gamble.

But that’s not the fundamental problem from my perspective. It is about the critical interplay with employer-sponsored health insurance, which is being completely ignored in the minimum wage discussion. Bluntly put: the difference between an employer who pays 100 percent of top-level health insurance coverage and one who does not offer it at all is roughly $4.50 an hour. Someone making $14 an hour but getting a reasonably good health package may be getting a compensation package worth $17 an hour and doing far better than someone making $15 an hour with no health coverage. If I were that first employer and I was mandated to increase a wage to $15, I might just keep my bottom line even by cutting health benefits by the value of a $1 an hour level contribution. The employee gains nothing. Keep in mind that when an employer does offer good health benefits, employees are “paid” in a highly regressive way. The person making $12 an hour may be paying a quarter of their income (in terms of what is deferred away from wages), while the person making $36 an hour with the same health benefit is only paying 10 percent of their income. Talk about a regressive tax! This is one part of the fundamental inequity of paying for health care this way.

We urgently need to be addressing health access disparities. Although many still debate this, it has become extremely clear that we cannot address it as a small state by creating a taxpayer sponsored universal (single payer) health care system. But we can, and must, work harder at levelling this playing field – and without that, in my mind, increasing the minimum wage is a dubious way of advancing the public good. I would be far more ready to consider a “minimum compensation package” level that included both wages and health coverage than a wage bill alone. That would mean employers who did not offer health care would be the ones who would need to increase wages – better enabling their employees to pay for coverage themselves. I introduced a bill this year that said that minimum wage levels needed to incorporate health coverage in that way, but it has not been endorsed.

***

Guns

The Senate bill imposing a 24-hour waiting period for hand gun purchases has been sitting in the House Judiciary Committee without action after a flurry or early testimony and a public hearing. Is it a House “hostage” bill? Is House leadership worried about support on the House floor? (It is considered a political no-no for a majority party to bring a bill to the floor without the votes to have it pass. That’s why floor debates are usually lopsided and partisan: any debate within a party happens long before that phase.) I don’t know – and thus can’t predict what will happen to it this year.

One thing is clear. At its core, this gun bill is a health care bill. The rationale for the waiting period is completely about suicide. Suicide decisions are often impetuous, and the thought is that just allowing a brief delay could save a life if someone is buying a gun for that purpose but has the time to reconsider. The complex issues about what causes a person to believe that suicide is their only option, and how society can or should intervene, are issues that we have addressed (and will need to continue to grapple with) in our Health Care Committee. There is a much bigger picture here, and it needs to be assessed in its full context. That is why we have committees of jurisdiction, assigned to become the subject experts (to the extent a lay legislature is able to develop expertise.) I have been and will continue to be strongly arguing that my committee needs to be involved in assessing the merits of this specific proposed health care intervention.

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It is truly an honor to represent you. Please contact me with your concerns and thoughts; I’m best reached via email at adonahue@leg.state.vt.us. My past legislative updates are available at representativeannedonahue.blogspot.com.

Legislative Update, March 30 2019

Legislative Update

Rep. Anne Donahue

March 30, 2019

There are not many bills that generate extensive contact from constituents. (And if you think your voice does not matter, keep in mind that “extensive” in this context usually means 10 to 15 emails or phone messages.)

The tax increase on heating fuel to increase the funding for home weatherization was one of those bills, and it presented a tough issue.

A greater number of individuals asked Rep. Goslant and me to vote against it, but those who supported the weatherization fund made compelling arguments.

This was a question we also asked in the town meeting day poll, and a majority of the 160 who responded opposed this increased tax.

The purpose of the tax (and the proposal to double it from two cents to four cents per gallon) was to increase the funds made available for lower income folks to weatherize their homes.

Increasing heating efficiency has a huge payoff, both in heating costs and in reducing the environmental impacts of burning unnecessary fuel. Those with an income of less than 80 percent of the state median income are eligible, and there is a waiting list.

A sales tax, however, impacts people with lower income at a higher percent of their income than it impacts wealthier individuals, something called a regressive tax. The income tax, as a contrast, is progressive: the more you earn, the higher a percentage of what you earn is taken back in taxes.

Low income advocates insisted this was OK, because it is low income Vermonters who will reap the huge benefits in money saved on heating. That’s true – but only for the small percentage who actually get that benefit. Everyone pays; only a few benefit.

Supporters argued that the average cost would be only about $15 a year. The problem with that is that every tax we add is just that – something added to a growing pile of fees and taxes. It isn’t in isolation, and it’s a real bite for those who are on fixed incomes and tight budgets.

The debate on the bill stretched for hours over two days, with various alternatives being offered. One option would have shifted the revenue source to an income-based tax, and I was leaning towards supporting that, but it was found out of order on a technical challenge.

On the second day, an amendment proposed a compromise: increase the current tax by 50 percent, instead of doubling it (one cent instead of two). I voted in support of this, but it flopped miserably, in a 16-122 vote.

Those who supported the program didn’t want the benefits cut in half, and those who opposed any fuel tax increase didn’t want to only cut the increase in half.

The vote to pass the overall bill was 81-60, with some Democrats joining in opposition. I voted “no.”

Two other tax bills were adopted in the past week. One increased the “universal service charge” on telecommunications bills by a half percent to invest in getting broadband coverage to all parts of the state.

The impact of this on the average user was estimated at $1.20 per year, and I supported it.

Finally, we voted on the overall “miscellaneous” tax bill that made adjustments to other revenues.

The biggest changes this year were an increase in the estate tax exemption level to bring us more in line with federal rates, and a reduction in the exempt level for capital gains. This bill passed on a 116-22 vote, and I was in support.

***

The other two biggest bills were on how to spend taxpayer’s money.

Hopefully, our state budget appropriates it wisely and carefully, and an overwhelming majority of members believed it does. The vote was 137-1; the one “no” vote came from a member who said she felt we should be spending much more to combat climate change.

There was a big injection of funding (almost $8 million) into child care support, and funding was added to our reserves to protect against an economic downturn.

The biggest drain on the budget is the increasing cost -- $21 million this year alone – that we are paying for, as the expression goes, “the sins of our fathers” (and mothers.)

That is for our Teacher’s Retirement Fund, which was short-changed from what the actuaries said it needed in funding over the course of many years in the late 1990’s and early 2000’s. The catchup is painful, and will continue to increase until we are back in line in 2038.

In fact, the General Fund budget growth this year was 3.9 percent over last year, but would have been 2.6 percent if not for the needed increases to the retirement fund.

The second major spending bill each year is the capital bill for state construction projects, funded through bonding (which is then paid back in the regular appropriations bill.)

There were no big new projects this year, but the groundwork is being laid for two. The women’s correctional facility in Burlington is, by all accounts, in deplorable condition and the worst among many of our aging prisons. The planning work is being authorized for its replacement.

In even worse condition is a 7-bed psychiatric hospital step-down residence in Middlesex that is made up of two temporary FEMA trailers, set up in 2012 after Irene. Its projected “useful life” was for four years, but work on replacement has stalled several times.

My Health Care Committee visited it this winter to assess it first hand, and during our tour the operations director attempted to take us through a side emergency exit to access the rec yard. But ground movement under the trailers often causes floor buckling, and a recent, unnoticed result had been that the door was jammed tightly shut.

This was the fire exit. No amount of attempted force got it to budge.

The fastest the state can potentially build a larger, new facility is in four to six years. Our committee joined with the Institutions Committee in pressing for a faster interim solution that could be ready in about two years.

The hospital and community mental health agency in Rutland are willing to team up to build a program there that could function until the state facility opens. It would then convert to another needed use.

This is not an ideal way to proceed, fiscally. We will have to pay the construction costs back in operating reimbursements. But we are at a point of urgency that we need to follow these dual tracks towards closing the Middlesex trailers.

***

The end note of the week was the health care market stabilization bill that my committee had passed two weeks ago. Our bill arrived partially gutted by the two subsequent committees that reviewed it.

Any bill that takes in money must go through the Ways and Means (tax) Committee, and any bill that spends money must go through the Appropriations Committee.

This was the bill that established a penalty for those who could afford to buy health insurance but failed to do so, thus requiring Ways and Means review. (We passed a bill establishing this mandate last year, but wanted to take some time to explore the means for enforcing it.)

The bill also includes all of the protections that can be a part of the insurance market when the pool of buyers is inclusive enough: coverage of pre-existing conditions, bans on annual and lifetime coverage limits, coverage on parent plans until age 26, and so forth.

The Ways and Means Committee decided it didn’t have enough time to fully evaluate the penalty sections, so it removed them. Our committee accepted that change, because the rest of the bill is too important to lose.

We can monitor for another year, and if our coverage rates begin to slip, bring the issue back next year. (We are at three percent uninsured right now, and we don’t want it to creep back up.)

Because the bill included a series of information-gathering assignments to the administration, the Appropriations Committee had to approve the costs for them. It approved the studies, but only if we removed two parts which carried a higher cost because they required actuarial analysis. So we accepted that change as well.

One of those lost pieces was a real disappointment to me, because it was the analysis I requested for the cost to ensure access to primary care for everyone through subsidizing only those who don’t already have it – rather than pursuing the proposal that some are endorsing, to create an entire system of universal primary care.

But that’s why they call the process of creating legislation, making sausage.

Now it goes to the Senate – and who knows how our work will fare over there.

***

It is truly an honor to represent you. Please contact me with your concerns and thoughts; I’m best reached via email at adonahue@leg.state.vt.us. My back legislative updates are available at representativeannedonahue.blogspot.com.