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Guest editorial: Will health care reform deliver true savings?

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Posted on February 7, 2013 |
By Emerson Lynn



Republican legislators have taken the Shumlin administration to task for failing to articulate how the state’s health care reform law would be financed, as required by law. The administration contends it has “substantially” complied, and labels the partisan display a “stunt.”

There is a defensible argument to be had on both sides. Republicans are correct that the law addressed the need to identify and to explain the means available to finance the health care reform law. The Democrats — and the Shumlin administration — are correct that the rules of the game changed after the law was passed. It was thought that Vermont would be able to get federal waivers to allow it to skip the need for a health care exchange and go directly to a universal payer system. That didn’t happen, which means the deadline for full implementation slides to 2017.

By any reasonable standard, that should also mean more time to put the financing plan in place.

And, from a purely political point of view, the Republicans in the Legislature have so little power that their complaints are not likely to generate a significant following.

But the administration — and the Legislature’s Democrats — have a bigger problem: What’s beginning to become evident is that reforming the system is a gargantuan task and one that may not yield any real savings. Selling this to the public may be a challenge they had not contemplated.

When the University of Massachusetts delivered its study of the proposed single-payer system — which included, at a vague level, a discussion of potential financing — it concluded that the plan would save $35 million the first year and about 1.5 percent over the 2017-2019 cycle.

That is nowhere near the amount Vermonters were told when the law was being debated in the Legislature.

It’s true the plan would include the uninsured, and it’s true the plan would include better benefits. The plan reviewed by UMass is not the same plan proposed by the Legislature. It’s not an apple-to-apples comparison.

But telling the vast majority of Vermonters that they will pay the same, or more, for essentially the same service doesn’t match the promise they heard during the health care reform debate.

From that perspective, the Republicans are right; the landscape is unsettled, there is no certainty as to where this leads, which causes unease within the business community. Health care costs are a major factor in any business, which means they will delay their plans until they have a firmer grasp on what lies ahead.

That’s a problem.

The UMass report didn’t help. When talk of payroll taxes, etc., is mixed with a projection of little to no savings, then businesses have every reason to become nervous.

It will become difficult to impossible for the governor to walk into a business, explain that health care costs will run roughly the same, or more, but that they should feel better because more people are being covered. That doesn’t square with the promise of getting health care costs off the backs of employers, or the promise that the system, once freed of burdensome administrative costs would be far less and the quality would improve.

(As a nation, we heard the same promise about the medical savings that would come through improved IT systems. It didn’t happen.)

What the report from UMass hints is that the savings in Vermont just aren’t there. Or are at least not there to the degree once thought.

Should we be surprised?

No. How is it that we can add thousands of people to the system, improve the level of services provided, insist on better quality care, AND save money?

If the conclusions are to be any different than what the study suggests, it would be advisable for the advocates to begin the explanations. Otherwise, this is an issue that will begin to fall in the skeptics’ favor.

It’s a massive task. And, to the administration’s credit, the process has been invaluable in terms of bringing a new level of coordination and cooperation to the Vermont health care system. We’ve also learned more about the system and its strengths and weaknesses, which is central to any path we choose.

But the process is at a sensitive position. There is no clear understanding as to what lies ahead, who will be affected, and how. The doubt is beginning to gallop forth.

That needs to change.

Emerson Lynn, St. Albans Messenger

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