Editorial: Real healthcare reform

Vermont could save as much as $1.5 billion annually through its health care reform efforts, or as little as a half billion a year, according to a report released yesterday by the Joint Fiscal Office and the Department of Banking, Insurance, Securities and Health Care Administration.

The variation between $1.5 billion and a half-billion in savings makes the estimate almost meaningless. It means they don’t know what the savings will be, because the circumstances can vary so dramatically. 

There are parts of the report that are encouraging, and parts that frighten.

It should concern us, for example, that the authors of the report base their predictions on a 7 percent growth rate, which means a doubling of costs every 10 years. If health care costs are burdensome now, then doubling the burden is problematic. No one is predicting that our economy will grow at anywhere near a similar rate; thus we have no way to sustain that level spending. Saving $1.5 billion by 2020 sounds like a huge victory, but the total spent then would still dwarf what we spend now. Saving a half billion in 2020 – 5 percent – seems almost meaningless.

What’s encouraging about the report – but not reported – is that it’s more a brief on the different ideas being explored as to how costs could be contained, and less about the political system needed to do so. It has little to do with the vaunted Hsiao report, upon which the state’s health care reform bill was passed, and more to do with the nuts and bolts of cost containment. In fact, the concept of a “single-payer” system gets in the way of the hard work that needs to be done.

It’s also important to understand that Vermont is ahead of the curve in terms of the most basic function necessary to affect reform, which is the gathering of all the relevant data. For example, within the last month or so, the state has been granted access to the database for all Medicare and Medicaid users. Prior, we only had the data for the public’s medical and pharmacy claims. Together, we are on the cusp of having the most complete and sophisticated health care database in the nation.

That’s critical. Without it, it’s virtually impossible to implement any reform of lasting importance. 

Here’s how the technology can be used: For the first time (in this country) we would have a database that covered the state and it would allow us to follow the practices of the payer. It would allow us to so tightly define the search that we would be able to identify physician practices and pick out patient cohorts. Analysts could look at particular diseases and how they were being treated, and at what costs. Obviously, that leads to identifying best practices, which could also be adjusted for the different circumstances. Bottom line: we could compare practices and know that we were comparing apples to apples. If patients are being successfully treated in one practice at a lower price than at another, all things being similar, then we have a path to figure out why. 

It’s also important to remember that this ability, and the position Vermont is in compared to all other states, did not begin with the Legislature’s passage of its health care reform legislation. It began in the mid-1980s with former Gov. Richard Snelling and the establishment of the Hospital Data Council. That’s when the state began to collect information about our health care costs, and when we began to pay attention to what transpired in our community hospitals. During the Jim Douglas administration in 2003, the Legislature passed Act 53, known as the Hospital Report Card law, which required hospitals to publish the information relevant to quality, financial health and cost of services.

We’re here because of a quarter-century of hard work. No other state has gathered the information we’ve gathered.

Now what?

It would seem that an opportunity exists — one that could pay dividends in terms of reduced health care costs, and one that could have some economic development potential.

The key players are: the State of Vermont, IBM, and the University of Vermont (which would include the Jeffords Institute and the school’s Complex Systems part of its Transdisciplinary Initiative.) The task: the state would partner with the other two, turning over its database, and asking IBM and UVM to take on the complex task of writing the code necessary to figure out what’s going on, patient by patient, practice by practice, region by region, demographic by demographic.

Vermont is small enough to make this practical. But it’s large enough, as a database, to apply elsewhere, and one would think the market for such information would be considerable. Perhaps it would be a smart way to raise UVM’s profile and to solidify the relationship between the state and IBM (and UVM). 

The report issued Tuesday is important, but not for the reasons one might suspect. It’s not about a single-payer system; it’s about the work being done in the trenches and about where we are thanks to years of preparation.

Emerson Lynn/St. Albans Messenger

 

 


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Addison County Independent