• Vermont single payor

    In a post-mandate world, or if the Wyden-Brown waiver acceleration bill passes, state experimentation moves once again to the fore.  All the more reason to take a look at what’s happening in Vermont.

    The Hsaio report and related materials have been out for several weeks now.  Most attention is on Option 3, the single payor plan.  Some observations:

    • Option 3 isn’t a true single payor since Vermont can’t unilaterally make benefit changes in Medicare, Medigap, Medicaid, VA, FEHBP, CHAMPUS or ERISA.  Not a criticism, just an observation.  Vermont intends to ask for waivers under Medicare, Medicaid and ACA.
    • The ERISA issues are thoughtfully discussed in the report – Vermont won’t be able to force self-insured ERISA plans to adopt Option 3 benefits, but they may be able to encourage them to move their ASO/TPA claims processing into the single payer on a voluntary basis.  ERISA shouldn’t bar universal adoption of the provider payment models.
    • For everyone else, Option 3 decouples employment from health insurance benefits and delivery of care.  But much of the finance still runs through the employment relationship.
    • BCBS-Vermont becomes the single payer agent.  They already have a very large market share in Vermont (75% by some measures).  The company supports Option 3.  One reason single payer is plausible in Vermont is the strong support from both providers and BCBS-VT.
    • Cost savings are attributed to:  (a) lower administrative costs (this makes sense and is a significant amount); (b) reduced fraud and abuse (an old chestnut, but single payer should make it easier to spot); (c) changing payment models (P4P, more global payments, etc.); and (d) med mal (but savings from defensive medicine won’t happen unless physicians actually change their practice patterns).  I rate Option 3 as more likely than ACA to bend the cost curve in the next 10 years.

    Projected start date:  January 1, 2015.

    UPDATE:  The VT Governor unveiled his single payor bill yesterday.

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    • We need more states to engage in these kinds of trials. Should be interesting to see how they fund it.

      Steve

    • Steve (and Kevin):

      Ditto.

      Reading what they have attempted to do inspires me. I am not just talking healthcare. I am talking plain old, non-partisan, laboratory of democracy type stuff.

      The first steps are rudimentary, but these types of efforts demonstrate a seriousness that is sorely lacking in other states. Perhaps because of scale, this is easier to launch–after all, and I mean no offense to VT’ers, the state population is smaller than my city, but nonetheless, its both inspiration and perspiration that counts.

      I for one will be sorely disappointed if the Feds dont bend over backwards to show this proposal some kindness, because without it, what we say to the other 49, and particularly the conservative block is, dont innovate, dont think out of the box, and god help you, dont rock the boat and tussle with the bureaucratic order.

      If we can grant waivers to mini-med plans for Mickey-D’s–granted, secondary to political meddling and posturing for limited intervals, we can throw a do-gooder like VT a bone.

      If they continue down the implementation path and the single payer scenario plan gets the kibosh, it sends a terrible message. The walls of Medicare, ERISA, etc, have to weaken a bit.to move forward.

      I want to add for balance, if this was a highly conservative state, using an evidence based scheme, proposing a reasonable market based, single state approach, I would be singing the same tune. Red vs blue…does not matter. If you want to do the most good for the greatest number of people, go forward…

      Brad

    • This seems like it would be a good thing.