Vermont’s ‘big deal’

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Gov. Peter Shumlin is a “big deal” guy. It is part of his DNA. Small steps or incremental reform bore him.

Last week, with three months left of his term in office, he announced a draft agreement with the federal government to turn the state’s health care system upside down. When Vermonters reflect on Mr. Shumlin’s legacy, it may be regarded as the “biggest deal” of his administration.

The “deal” is the all-payer health care waiver his team has worked on for the past two years. It changes how the state’s health care system is funded. Instead of the traditional fee-for-service model, doctors and the health care system overall would be paid for the quality of their patient’s care.

The fundamental reasoning behind the change is under the system we have, there is no incentive to be frugal, and there is no incentive to be healthy. It’s a system that makes its money treating sickness, since there is no money in wellness.

Mr. Shumlin says, done correctly, the proposal could save the state a staggering $10 billion over the course of a decade. This is also the governor who was convinced there was an affordable way to finance the proposed single payer system in Vermont – until he found that there wasn’t. And this is a governor whose legacy will also include a state health care exchange that has cost far in excess of $200 million and still doesn’t fully function.

That’s chump change compared to what’s being envisioned with the all-payer model, and if the health care exchange is thought complicated, beware. What’s involved in the migration from what we have to the all-payer system beggars the imagination from a complexity perspective.

It would be hard to be otherwise, considering it involves roughly 20 percent of the state’s economy and anyone in Vermont who uses it. We’re also out there by our lonesome. We’re the first state to try this model. We’re No. 1.

Yea.

There is little question that reform is coming. The federal government is quickly pursuing its own initiatives with Medicare, anxious to begin paying doctors for the quality of the work they do, rather than how much treatment they provide. It’s universally agreed the cost of the system we have is not sustainable, and changes of considerable magnitude are in the offing.

What concerns us is the timing of the proposal and the short amount of time being given to educate the people. The governor says he would like to have the draft agreement signed by mid-October, and three public meetings are scheduled around the state between now and then to take the public’s pulse. That’s not enough time to fully vet a proposal this vast and this complicated. Not close.

There is also the matter of responsibility. Mr. Shumlin is only governor for three more months, and in a month Vermonters will have elected his successor. Whatever is done now puts the next governor in a difficult position. Republican or Democrat. The people who drafted the agreement may not be part of the next administration. The institutional memory may not be there. If Republican Phil Scott wins, it’s a given he will have a different team. What then?

Much is being made of the fact that “exits” were placed into the agreement with the feds. If the new governor doesn’t like the agreement, he, or she, can reject it with 180 days notice. There are also opt-out provisions for health care providers. If they don’t want to be part of the program, they don’t have to be.

But these opt-out provisions are more difficult to exercise than the words suggest. Just as it’s difficult to change from one system to another, it’s even more difficult and just as disruptive to reverse course, to retreat back to where you began. Once you begin a profound change in how you operate, it’s very difficult to turn back. Once something is broken, it’s not a given it can be put back together.

That difficulty is both practical and political. It’s all about the money. The target is to have health care costs not exceed 3.5 percent, which invites the discussion as to how that can be managed and who can offer the services most effectively. If the targets are not met, the internal discussions could easily become tense. Those with the biggest pocketbooks will be the ones with the greatest power. In a small rural state, how does that play out? Who wins, who loses?

And that’s just the beginning. It may be that the all-payer waiver is precisely what we need. But this isn’t something we can determine in three short weeks, in three public meetings, right in the last moments of a gubernatorial campaign. This is a process that should be extended from now until the legislature convenes, and it’s something the legislature should debate as well. It should be the responsibility of the next governor.

Mr. Shumlin needs to be content in getting the health care discussion this far down the field. It’s still one of his “big deals.”

Emerson Lynn is co-publisher of The Colchester Sun.