It is not just semantics that undermines Gov. Peter Shumlin’s push for a single-payer health care system when businesses, providers and patients hear the proposed reform as a promise instead of a guarantee. It’s today’s economic pressures, past practices that haven’t lived up to the hype, and a decision to delay any explanation of the financing that has people up in arms.
As right as the governor may be on the benefits of a single-payer system, he doesn’t have the information today to guarantee that what he promises will become reality — and that’s a problem.
Porter Hospital officials, for instance, have good reason to be wary of political promises. As a front page story in today’s Addison Independentreports, the hospital is facing a $2 million deficit, largely because of past state promises of revenue that have since become liabilities. And it’s only getting worse as federal and state reimbursement rates for Medicaid and Medicare patients are far below cost for hospitals.
It is no wonder that Porter Hospital officials are wary of promises that the new system — as yet undefined — will treat hospitals more fairly and ensure adequate payment for the services provided. What Porter President Jim Daily said in return was right on the money: “We live in the present. Our crisis is right now… What we need is short-term help, now, with reimbursement.”
But greater reimbursement is not something the governor can deliver. The state doesn’t have the money to help, nor does the governor know when projected savings will materialize. As it is, there are so many moving pieces to the governor’s single-payer proposal — including the need for federal waivers and a new infrastructure to handle the proposed system — that any estimates are best guesses.
In the meantime, hospitals are in panic mode; some of Vermont’s biggest businesses, like IBM, are wondering if the new system will increase their costs of operating in the state (and that always makes businesses look for other ways to operate); doctors are unsure of the economic impact on their practices; and other businesses are likely taking a wait-and-see approach before committing large investments into a state in which the health care system is literally up in the air.
That uncertainly shakes the confidence of the business community and undermines the political conversation as doubt permeates one of the signature issues of the Shumlin administration. It’s a conversation he can’t control because he doesn’t have all the parts in place and well-intended promises just aren’t good enough.
As importantly, Gov. Shumlin should reverse his position to not talk about financing of the proposal until after the system is built. The reason is obvious: What drives the proposed change is the potential for economic benefit. If the savings are demonstrable, then the public and the business community will gladly join forces and lead the way.
On that point, William Hsiao, the lead author of the governor’s proposal and a professor of economics at Harvard University, had the following exchange (as reported by Vermont Digger) with Rep. Mark Larson, chair of the House Health Care Committee, when Larson asked Hsiao if the health care delivery system could be reformed without addressing the payment system for providers.
“No,” Hsiao said, then added, “that’s pie in the sky thinking… I would ask the people who propose this, what leverage will you use to change the health care delivery system? You have to assume the current health care delivery system is in some kind of equilibrium. How will you be able to disturb it other than just arbitrarily say I’m going to pass a law, I’m going to force you to do it. You won’t be able to do that… The question is what leverage do you use?
“The leverage you use is the payment system. You change the incentive structure, then the delivery system will move. The payment system is like a magnet. The delivery system is like many iron particles; when you change that magnet to a different position, the iron particles will move. But to do that — to change the payment system — you have to change the financing. To be effective in changing the delivery system you have to remove the current situation where providers can play games with the insurance such as cost shifting.”
Hsiao estimates that a single-payer system will save Vermont $580 million in the first year, $770 million by 2016, and $1.1 billion by 2019. Those estimates, however, come with many uncertainties that can’t be ruled out this year, and that’s what breeds the doubt and dissension among members of the medical and business community.
Nor is that conflict productive.
We agree that progress toward a single-payer system should be encouraged, but it need not be on the front burner this session. Rather, because so many aspects of the proposal need to be pulled together from outside of Vermont’s control, one would think continued work on this proposal could proceed more effectively if the issue took a back seat as the administration gets his ducks in a row for a more detailed and reassuring debate a year from now.
In the meantime, addressing the state’s energy system and how he will replace the power lost when Vermont Yankee is closed, establishing Vermont as the education state and creating the potential for excellence within our schools, promoting his new vision for agriculture and a cleaner Lake Champlain, promoting universal broadband and the benefits that come with that, and a host of other positive and concrete initiatives could instead be dominating the political conversation among all Vermonters — creating excitement about our future, instead of angst.