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A crisis for home health?

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The state of Vermont is forcing a potential crisis on the state’s 12 nonprofit home health providers that is puzzling and suspect. At issue is a demand by John Crowley, commissioner of Vermont’s Department of Banking, Insurance, Securities and Health Care Administration (BISHCA), for home health providers to prove they are serving 100 percent of the state market by July 9. If they can’t, Crowley says he will break the current state-imposed monopoly and allow a private firm to complete for the Medicare and Medicaid patients they serve.

The puzzling aspect of the forced crisis is the timing. Why Crowley has set such a tight deadline is unknown and makes little sense. Vermont’s home health care providers have operated under the current system for numerous years and have an outstanding record of serving a high percentage of Vermonters at a low per-capita cost. According to state figures for 2002, Vermont’s 12 home health centers served 108 Medicare patients per 1,000 residents, compared to 86 per 1,000 in New England and 61 per 1,000 nationally. The average cost per visit was $76 in 2002, compared to $102 nationally. And, because the home health centers operate on a break-even basis, they require no taxpayer subsidy.

Crowley’s initiative could change that. At issue is whether Crowley will allow the Winooski-based Professional Nurses  Service to file for a Certificate of Need to compete with the 12 home health care centers, of which the Addison County Home Health and Hospice  is one. The concern is that PNS, a private firm, will “cherry-pick� the business — vying for the more profitable cases, while leaving the most expenses cases for the home health care agencies to serve.

Because the home health care centers rely on a mix of the profitable accounts to balance the more costly ones, a change could make the centers unprofitable and, perhaps, reliant on tax dollars. Furthermore, it would almost surely harm the centers’ ability to provide universal coverage.

“Right now, we take everyone, regardless of their ability to pay,� said Larry Goetschius, executive director of Addison County Home Health and Hospice. “That would really be a hard thing to keep going. My concern is that when you introduce that (for-profit) incentive into the marketplace, you end up with an incentive that’s inconsistent with patients getting access.�

Home health care allows patients to receive care in their homes for as long as possible. If patients weren’t served  by a home health care provider, or couldn’t afford the fees of a for-profit provider, they would most likely end up in either the hospital or nursing home for care — creating a cost shift and higher health insurance rates for everyone.

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On the other side of the issue is the prospect of lower health care costs for the patient and the state. The driving force behind the change appears to be PNS, which contends that their services would be less expensive than those provided by the home health centers and, therefore, could cut Medicare and Medicaid expenses. PNS is a growing firm headed by two nurses with roughly 200 employees statewide. They say they can provide many services cheaper than home health and that it’s unfair to continue a state-imposed monopoly. “The power should be in the consumers’ hands,� says Megan Price, spokeswoman for PNS.

The whole ruckus was started when the U.S. Justice Department was reinvestigating the loosely arranged monopoly formed by the nonprofit health care centers, and that federal encroachment has led some state senators to take a “keep the federal government out of our business� approach. “We don’t want the federal government dictating how we deliver care in this state more than they already do,� said Chair of Senate Health and Welfare Sen. Jim Leddy.

More importantly, however, is trying to decide which system would best serve the state, but not enough is known of the consequences of adding private competition to make a rational decision.

What consumers do know is that in the health care business the twin goals of providing universal access and the highest cost efficiency are not mutually compatible. Private enterprise cares for patients who make money for their operation, and turn away those patients that do not. That’s simple business. A private firm will not take on patients in which it knows it will lose money.  It can’t, for long, and stay in business. If we accept that premise, we know that any private firm will “cherry pick� the most profitable cases and turn away the cases that would be a liability.

Knowing that to be true, what doesn’t make sense is to force this significant change on the public without a more thorough study. Crowley and his boss, Gov. Jim Douglas, may want to push a market-driven system into play in Vermont, but it’s a risky step that could mean less care for those most in need — and drive health insurance rates even higher for the rest of us.

Forcing the issue to a July 9 deadline is, at best, unnecessary, and at worst, a move in the wrong direction. Crowley should step back a few paces and cool his heels. He may have a reasonable idea, but there hasn’t been enough study done to justify tossing the system into crisis just because he’s in a rush. A Dec. 31 deadline makes more sense, and even then any decision should be incorporated within the revised health care structure now being debated in the Legislature.

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