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2008 Health Care Testimony to House Health-#2

Testimony to House Health Care Committee 3-12-08. Andrea Cohen, Vermont Businesses for Social Responsibility

VBSR testified to this committee on February 6, 2008 to communicate our primary policy objectives which are to de-couple health insurance from employment and to institute public financing of health care.  We called out that the costs of health care and how this care is financed are critical economic development issues. It is our belief that the system can no longer rely on the employer sponsored insurance market as it’s backbone, especially if we continue to have a goal of affordable and quality health insurance. VBSR believes that the current health care insurance system needs major reform to be financially sustainable and so that the Vermont workforce and their families can have universal access to quality health care. We thank you for the work you have been doing this session to move towards these goals.

In February we offered some ideas about what could be done in the interim to move towards these ultimate goals. We will offer comment on your draft bill as it relates to these interim steps.

1.    Immediately explore alternative methods of financing health care. Identify who will benefit from alternative methods and the relative equity of each system.
We appreciate the inclusion of Section 7 (page 9) of a health care financing study. As we continue to work on improving our health care system this information is critical to have in hand.  One change we recommend is to run this study out of Joint Fiscal as we understand that is who ran the previous work. Also, to ensure the implementation of this important work by next January, our preference is to see full funding for this study in the bill. These changes will allow for quick implementation and integrity of results.

The language in the current draft needs some re-working to clarify the relationship between the lead and any potential funders in terms of defining inputs to the model, and the terms of any contract for services.  It is of upmost importance that interested parties are consulted during the process and that the final product is viewed as an objective basis for future decision-making.
The cost shift study in Sec 20 (page 52) to be implemented by JFO is also an important piece to ensure sustainable financing. We support and would like to participate in this work.

2. Stop fragmentation of the insurance pool. Move in the direction of getting all Vermonters in one insurance pool, do not implement measures that split the pool further.

We are pleased to see the study in Sec. 4 where BISCHA will explore and prepare a proposal for the merger of the non-group market (including Catamount), small group, and association market.  That is an important step to take.  We still have concerns regarding the mandate (?) for insurance companies to provide a new “Vermont HealthyLiving” insurance product. (page 10).  This seems to be in contradiction of the goal to merge pools.  We would prefer to see a pilot with an existing product (e.g. the state employees plan). Alternatively , follow the direction of the current BISCHA draft rules to allow for this concept to be implemented for all current products.

3. Streamline administration with electronic record-keeping and centralized claim processing; identify and implement other cost effective efficiency initiatives.

We support the various provisions in the bill that move towards this streaming and efficiency.   These include:

  • Accountable Care Organization model study- integrated community health designs. (page 3)
  • Universal standards for benefits packages, payment methods, and administrative processes-  (page 8)
  • VITL plan updated annually (page 56)
  • E-prescribing study- VITL to implement a planning and feasibility study- page 57.

4. Take steps to “level the playing field” between businesses. (Note the difference between the Catamount Assessment, $1 a day, and what other employers are currently paying).  Require state purchasing preference to firms that have been providing high quality insurance to their employees.
We continue to believe that employers who have been voluntarily and consistently providing high quality health care benefits to their employers should be rewarded through state agency purchasing preferences.  We offer the following for inclusion into the draft bill.
By Jan 1, 2009 the Agency of Administration shall modify its current purchasing and contracting procedures so that state agencies, departments, and offices will give purchasing and contracting preference to companies that provide high quality health insurance benefit to their employees. This will include an additional price factor based on a firm’s per capita health care expenditures (over the past 10? years).

5. Eliminate wasteful duplication of medical facilities and services.
Beyond some of the measures identified in the Sec. 3 (feasibility study for community-based payment reform and integration of care), the latest draft of the bill does not appear to offer much in the way of serious spending reform. The current hospital budget review measures (page 54) need to be enhanced and expanded.


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