Expert suggests radical reform for health care delivery

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(Host) In Montpelier on Tuesday, lawmakers heard a proposal for radical surgery of Vermont’s health care system. A researcher says Vermont should re-direct health care dollars through a single organization that has the power to set budgets and control spending.

VPR’s John Dillon reports:

(Dillon) Dr. Elliott Fisher, a researcher from Dartmouth Medical School, says that about a third of health spending is unnecessary and may even be harmful. Fisher and his colleagues have looked at patterns of medical practice around the country. And they’ve concluded that more doctors – and more medical procedures – don’t necessarily equal higher quality health care.

(Fisher) “So the implications for reform: I think our evidence suggests that if you take conservative regions of the United States, the low spending regions on that map, as a benchmark we’re currently wasting 30 percent of U.S. health care spending. That means we could safely send about a third of the U.S. health care workforce to Africa and probably improve the health of both continents.”

(Dillon) Fisher says doctors have a financial incentive to treat more patients. So the capacity of the health system – the number of specialists, for example – drives demand, he says.

To change this system, Fisher says policy makers have to change the way health care is purchased and paid for. He told several legislative committees that Vermont should set a global budget for health care spending at the hospital and physician level.

(Fisher) “But you need to change the incentives so there are not incentives for over-use of the care system. And so we can re-allocate resources so that physicians who are now spending all the time in their practices, practicing what we call ‘hamster medicine’ – you know, running on the treadmill to keep their payments coming in – can actually step back, spend some time and design and put in place the population management system we need to improve quality.”

(Dillon) Fisher acknowledged that the path to reform is extremely complicated. He says it will be a multi-year process and should be guided by experts in a state-run commission or health care authority.

Senate President Peter Welch, a Democrat from Windsor County, says lawmakers may want to consider the state Public Service Board as a model to regulate health care spending. The PSB uses a court-like proceeding to set rates. According to Welch, a similar organization may be needed to oversee the health care global budget.

(Welch) “If you’re going to make that transition from fee-for-service – where there is a reward for providing more care, not better care – to a global budget where there’s an incentive based on performance – that requires a new structure.”

(Dillon) Lawmakers are beginning to consider the specifics of health care reform. But one aspect of Fisher’s proposal may not get a warm reception in the Statehouse. He says any proposal for substantive reform should only get a yes or no vote in the Legislature. In other words, lawmakers wouldn’t be able to amend the plan once the commission or authority has drafted it. According to Fisher, that’s the best way to stop powerful interest groups from blocking reform.

For Vermont Public Radio, I’m John Dillon in Montpelier.

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