Health care reform plan unveiled at Statehouse

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(Host) Vermonters are getting their first look at a comprehensive health care plan drafted by a special legislative committee. The legislation would set up a publicly financed system that could be funded through payroll or income taxes. It also includes new regulatory oversight of hospitals and other providers.

VPR’s John Dillon reports.

(Dillon) This is not a plan than tinkers around the edges of health care reform. The draft bill now before the House Health Care Committee aims to provide every Vermonter with publicly financed care, similar to what’s done in Canada and many European countries.

Committee Chairman John Tracy, a Burlington Democrat, says the bill attempts to tie together a fragmented system of providers and payers.

(Tracy) “We’re trying to bring it together, to make it more organized, make the delivery more efficient and try to control the rate of growth.”

(Dillon) The legislation would set up a new state agency to oversee the entire health system, from hospitals to insurance coverage. A seven-member board would define what medical procedures get covered by the new state health plan. A separate board would set hospital budgets. Finally, the Legislature would vote up or down on the benefits plan and overall spending for health care.

Tracy says one main goal is to pay health care providers based on outcomes. He says the current payment system reimburses doctors and hospitals based on the number of procedures they do.

(Tracy) “And that’s the wrong way to do it. We feel it should be pay for performance, pay for healthy outcomes. Make sure you have interventions and preventative treatments that you know work.”

(Dillon) Unlike a traditional single-payer model, the legislation would not require people to enroll in the state plan. However, there would be a strong incentive to join, since people would pay for the new system through higher taxes.

Tracy says the public already finances Vermont’s $3.2 billion health system. The idea is that broad-based taxes – such as a payroll or income tax – would eventually take the place of health insurance premiums.

(Tracy) “If we do it correctly, they should see a significant reduction in what they’re paying in premiums. Businesses should find a significant reduction in what they pay. It should go all the way down the line. We have to show Vermonters that if we do a broad-based tax, they will see relief in another part of their budget – whether it’s a personal budget, a town budget or a school budget.”

(Dillon) The House committee plan marks the first stage in what will likely be lengthy legislative debate. Governor Jim Douglas immediately criticized the proposal.

(Douglas) “It’s moving in exactly the wrong direction. This is not what we want. This is not what the people of Vermont want. There are four new bureaucracies in that bill, two new taxes, rationing of health care. Vermonters don’t want to stand in line, take a number and wait for their health care. We want less government intervention, we don’t want politicians and bureaucrats making decisions.”

(Dillon) Vermont’s hospitals are taking a cooperative approach in dealing with the legislation. Officials at the Vermont Association of Hospitals and Health Systems were pleased the House Committee has discussed using Medicaid money to bridge the transition to a new system.

Tom Huebner, of the Rutland Regional Medical Center, is chairman of the hospital association. He hopes the Legislature moves gradually in changing the way hospitals are paid.

(Huebner) “We do think some pay for performance pieces can be built into this by way of incentives. Trial it, work on it a bit, see if it makes sense. And if we build more of that in over time, I think that’s great.”

(Dillon) The legislation would phase in the changes over time. The new health care regulatory system would be created this year. Primary care would be covered beginning in June of 2007, while hospital care would be covered three months later.

Before any of that happens the bill will have to clear at least two House committees and the House itself before heading to the Senate.

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

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