Administration Says Health Care Bill Will Control Costs

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(Host) The consumer insurance exchanges that are part of Vermont’s new health care bill don’t go into effect until 2014.

But the Shumlin Administration is confident that other provisions of the legislation will help reduce the state’s healthcare growth rate in the next few years.

And, as VPRs Bob Kinzel reports, one key goal is to bring the rising cost of private insurance premiums under control.

(Kinzel) Anya Rader Wallack is the Governor’s senior policy advisor for health care and she played a key role guiding the bill through the Legislature.

While the legislation establishes a number of long term goals for the state, she says it will also have a positive, short term impact on Vermonters.

That’s because the bill creates a Board that will oversee virtually all aspects of health care in the state including the final review of proposed rate increases by private insurance companies.             

She expects the Board will give any rate hike request a lot more scrutiny than the current system:        

(Wallack) "So the Board is charged with getting underneath that and looking at how are providers being paid what kinds of services are being provided and are there ways that we can reduce that underlying cost trend so that we’re not just sort of passing along whatever bill we get, paying whatever bill we get."

(Kinzel) Wallack says the Board will also create some new payment systems including one known as "bundling."  Initially this system will be used for patients with chronic illnesses. The idea is to give a person’s medical team one set rate to treat the person for a year:

(Wallack) "So it causes them to start thinking ‘well how do we do a better job of preventing hospitalizations if someone’s hospitalized what do we do as follow up to make sure that they don’t get re-hospitalized and so it’s specific to a condition ultimately we’d like to see that kind of concept applied more broadly to all people all services but it’s a way of starting to have providers work under that kind of payment arrangement."

(Kinzel) Wallack says the state should be able to measure the effectiveness of cost containment plans.  If Vermont’s health care growth rate hasn’t been reduced by 2013, then Wallack says the Administration will rethink its plan to pursue a single payer system:

(Wallack) "I think the Board will be able to make that kind of assessment but we have to work really hard between now and 2014 to be able to have a sufficient impact so that we can say yeah we can predictably expect a sustainable trend line out to the future and therefore it makes sense for us as a state to take this on."

(Kinzel) The five members of the Health Care Board are scheduled to begin work on October 1st.

For VPR News, I’m Bob Kinzel in Montpelier.

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