Governor Douglas on healthcare: federal plan stresses coverage, not prevention

MIDDLEBURY — Gov. James Douglas said last week he hopes federal lawmakers do not pass a healthcare reform bill that simply extends more coverage for the uninsured, but rather that the legislation stresses preventative care, cost cutting and promoting greater competition among private insurers.
Douglas discussed his views on healthcare, a new forecast of a $28 million state budget revenue shortfall and a variety of other topics during an interview at the Addison Independent.
The Middlebury Republican declined to disclose his election plans for 2010, but clearly spoke like a man with some unfinished business to take care of.
Douglas recently took over the chairmanship of the National Governors Association (NGA), through which he plans to lobby for healthcare reform — a hot-button topic on Capitol Hill these past few months.
“It’s a timely topic, not only on the national agenda, but it’s got to be key for all the states,” Douglas said. “It’s a huge percentage of every state’s budget and growing, and it’s a huge percentage of our gross domestic product and growing.”
Douglas agreed that more Americans need health insurance, but said he believes the country needs to get a better handle on the costs of medical coverage — as well as implement programs to keep Americans healthier — before aggressively pursuing a national plan.
“We’ve got to get our costs under control for the economic well-being of the states, let alone the health of the people,” Douglas said. “I think that a lot of the discussion in Washington has not been on-point.”
Douglas pointed to Massachusetts as an example of a public healthcare plan that is in financial trouble because of its “focus on coverage” that has been hard to sustain.
“They cannot afford to cover the large numbers of new people who have been added to their rolls,” Douglas said of the Massachusetts plan.
Douglas believes Vermont has done a better job in implementing healthcare reform, in part because the state emphasizes preventative care and fitness, in addition to basic coverage through Catamount Health and other programs.
“We’ve got to focus on changing how we deliver care, how we pay for it and focus on keeping people well and containing costs, rather than just focusing on getting more people insured,” Douglas said. “If costs keep rising at these rates, it’s going to be a problem.”
The governor has been sharing the details of Vermont’s healthcare reforms with federal lawmakers. He and other state leaders have asked Congressional leaders to ensure that any federal plan they pass does not undo the reforms Vermont has already implemented.
“Vermont, a state that has been progressive in covering more people, shouldn’t be put at a disadvantage when the Congress enacts something,” Douglas said.
Congress has been debating a reform plan that includes a public healthcare option for the uninsured, of whom there are an estimated 46 million nationally. The plan would be financed, in part, through a surtax on the nation’s highest wage earners.
Douglas is not a fan of such a plan.
“I’d rather see more private competition, frankly,” Douglas said. “I think the focus ought to be on reducing costs, not on finding more money to pay for more coverage.”
Douglas said he favors reforms that would include bigger financial rewards for primary caregivers, who now do a lot of referrals to specialists who perform some of the more costly procedures.
“What we want is for those primary care docs to spend time on physical exams, on preventive care, not on fixing people after the fact,” Douglas said.
This is a system prescribed in Vermont’s guiding principles for healthcare, known as the “Blueprint for Health.”
“If we just pay people to do expensive intervention and procedures, (healthcare reform) is not going to work,” Douglas said.
Douglas lamented the recent, somber budget forecast indicating an additional $28 million shortfall in Vermont’s fiscal year 2010 general fund budget. Douglas said he anticipates the state’s Joint Fiscal Committee (JFC) will meet this month to review the red ink and propose ways to mop it up.
“It’s disappointing, maybe not surprising, because I think most economists feel we haven’t bottomed out yet,” Douglas said. “But after an 8 percent drop in revenues between fiscal year 2008-2009 and another 2.5 percent now projected, it’s significant.”
If there is a silver lining to the bad news, it is that it comes at the beginning of the fiscal year (which began July 1) and gives state government some time to adjust, according to Douglas.
Douglas Administration Secretary Neale Lunderville has contacted agency and department heads for some suggestions on savings. The administration will send its proposal to the JFC “early next month,” Douglas said.
Vermont has already laid off around 140 employees and trimmed hundreds of other state jobs through attrition during this latest financial crisis, Douglas noted.
Another state revenue forecast will be revealed in November, Douglas said. He hopes the economic news will be much better at that time, though he realizes there are no guarantees.
“The personal income tax is not performing,” Douglas said.
To make matters worse, he said, some of the state’s more affluent residents are moving elsewhere to avoid Vermont’s tax structure. The Legislature’s decision to lower the estate tax threshold to $2 million (the federal threshold is $3.5 million) was particularly concerning to some Vermonters, according to Douglas.
“It’s still a small percentage of the population (that the estate tax) will affect, but these people have a choice,” Douglas said of the impact the tax change might have on state residency. He spoke of some CEOs of Vermont companies that live in the Green Mountain State for “six months, minus one day,” which means they are not subject to some of the state’s tax laws.
“I think there is more of an exodus than people think,” Douglas said.
Douglas pledged to back price supports for dairy farmers and promote more local production of food crops.
“I think with the Chinese food scare of the last year or so, people care more about where their food comes from and are a lot more interested in its quality and source,” Douglas said.
In the short term, Douglas wants to see more farmers’ markets equipped to process electronic benefit cards from low-income residents who receive federal assistance. The Middlebury Farmers’ Market is already able to process benefit cards.
He also advocated for wider distribution of the Vermont Agency of Agriculture’s mobile processing facilities for fruit and vegetables. He said the vans have equipment that allows farmers to freeze-dry fruits and vegetables.
Douglas said he is also a big fan of the Farm to School program, through which fresh local farm produce is made available at public schools.

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