First steps to single-payer health care eyed

December 09, 2013

Rutland Herald

By Peter Hirschfeld
Vermont Press Bureau

MONTPELIER — In an attempt to avoid some of the same operational challenges they continue to encounter on the new online insurance exchange, administration officials are asking lawmakers for money to begin preparing now for the next phase of reform: single-payer health care.

Robin Lunge, director of health care reform for Gov. Peter Shumlin, asked the House Committee on Appropriations last week for more than $200,000 in mid-year budget adjustments. The expenditures are related to the publicly financed system the Democratic governor has promised Vermonters he’ll deliver by 2017.

The request includes $100,000 for actuarial assistance from the same University of Massachusetts team the administration paid last year to chart a “road map” to universal coverage. Lunge asked for another $50,000 to hire a consultant who will help the state begin navigating logistics for the plan.

“As a policy person, I have to tell you, operations is way harder than policy,” Lunge told House lawmakers. “Especially given what we’ve learned through Vermont Health Connect, with this kind of large, operational change, you really need to make sure that you have enough time.”

Vermont Health Connect, as the state calls its new online insurance-buying website, has been beset with technological glitches since its launch Oct. 1. Lunge told lawmakers the more time Vermont has to assemble the operational framework for single-payer, the better off Vermonters will be when the policymakers flip the switch to the new system.

A law passed in 2011, called Act 48, has set Vermont on a course toward a publicly financed system that will provide health insurance to all Vermonters by virtue of their residency. It’s unclear still how the state will finance the new system that, according to competing reports, will require anywhere between $1.6 billion and $2.2 billion in public funding. Lawmakers are scheduled to adopt a financing plan in 2015.

Proponents of Act 48 say the new system will not only introduce efficiencies to the more than $5 billion state health care industry, but reallocate costs across the population in a more fair and sane manner. Detractors say Vermonters should be wary of entrusting government bureaucracies such overarching control of the health care system.

Lunge told lawmakers that 2017 doesn’t leave a lot of time to resolve the operational dilemmas Vermont will have to solve as it assembles the new system.

“I know, especially in the legislative context, three years sounds really far away,” Lunge said. “But for operations, three years is tomorrow.”

Lunge said switching to the new system will touch on “several different parts of state government.”

“It’s part of what the Department of Vermont Health Access does in the Medicaid program. It’s part of what HR does for state employees. It’s part of what Corrections does for inmates,” Lunge said. “So what we need to do with operations in moving forward is to look at who does what now, and how do they do it.”

The $50,000 request, Lunge said, will allow the state to enlist a contractor with experience helping governments or large private companies undertake major reforms. She said the state will invite bids once lawmakers have approved the funding, which has been included in the Budget Adjustment Act for fiscal year 2014.

“We really need to start today with our planning, so that we make sure that we are mapping out all the business processes and really drilling down into the details as we move forward,” Lunge said. “And I think the best way for us to do that is to make sure that we have some outside expertise who has experience doing this kind of large operational change.”

The $100,000 for actuarial assistance, according to Lunge, will pay for the analytical help she anticipates lawmakers will want as they begin thinking in early 2014 about what the financing system might look like, and what revenue mechanisms are best suited to raise the money needed to pay for single-payer.

“The $100,000 is what I’m estimating we might need over the course of the legislative session to work through various scenarios in more detail around the benefits side, around the financing side,” Lunge said.

The administration’s mid-year budget requests also include about $125,000 for salary and benefits for the person it has hired to “build the background information needed to come to a financing mechanism or mechanisms” for the publicly funded system, Lunge said.

The analyst, Michael Costa, has spent much of his first few months on the job isolating the various ways in which Vermonters pay for health care in the current system, according to Lunge. She said health care-related expenses have become embedded in all manner of public and personal expenditures, and that the state will have to invest time teasing out how health care is spent for now before it can put together a funding mechanism for the future.

“Anything that touches on the financing component, (Costa) is my point person on,” Lunge said.