VOTE NOVEMBER 5, 2024 

A lot of us are worried about the cost of living in Vermont, particularly for seniors and people who work for a living.

 

The pressure is real.

 

Health care is a prime example: the proposed 24% hike in many Blue Cross Blue Shield premiums for next year would be devastating to individuals, businesses and public budgets alike. What we spend on health care dwarfs this year’s increase in school spending. Our health care spending per person, driven by our high hospital spending in particular, is now amongst the highest in the nation. 

 

Vermont faces two tough realities that we must address next session:

 

1) our hospitals are in poor fiscal health and their situation is getting worse and

 

2) we can no longer just increase commercial rates to sustain hospitals.

 

We just can’t afford it. 

 

In Act 51 of 2024, the legislature tasked the Green Mountain Care Board (GMCB) with hiring a consultant to evaluate our health care system.The GMCB hired Dr. Bruce Hamory, the former Chief Medical Officer of Geisinger, one of the most well-respected health care systems in the country, and a health systems design expert who has been consulting hospitals and health systems for over a decade. Dr. Hamory has been sharing findings and recommendations in a series of community meetings. 

 

As I said at one of these meetings, we  can’t fix what we can’t see.  Due to this important work by Dr. Hamory, we can see how our health care system is not working for just about everybody, from our hospitals and primary care providers to our businesses, from people trying to pay for their prescriptions to people trying to find a primary care provider.

 

Consider a few facts at the core of their presentation: 

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• The average monthly premium for the lowest-cost commercial health insurance premium increased 108% since 2018. In that same time frame, the average household income only increased by 22%. 

• Despite that, BCBS has LOST money in 5 of the last six years. That speaks to why BCBS is asking for a 24% increase this year.

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• Vermont is 8th in the nation in proportion of its health care dollars that it spends on hospitals. That makes us expensive. Nevertheless, 9 of 14 hospitals operated in the red in 2023, and it looks like up to 11 may be operating in the red currently. 

• By several estimates, some 10% to 30% of costs associated with our hospitals is “avoidable care”-- care that should not have been needed including due to rehospitalizations. Given that we spend about $3 billion a year on care in hospitals, reducing that avoidable care could save hundreds of millions of dollars.

• Despite our high spending on health care, many Vermonters have trouble accessing the primary care they need. That is a big red flag– both for the wellbeing of our people and for our pocket books. When people can’t or don’t get good primary care, they are more likely to end up in the hospital to get more expensive care. 

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This is how the consultant represented the vicious cost cycle we are in, with the high cost of hospitals crowding out primary care, and then the shortage of primary care driving hospital costs higher.

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The Governor and his Agency of Human Services are responsible for health care reform.

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The Governor is understandably worried about the average 14% increase in property taxes.

 

However, uncontrolled growth in health care and mental health costs is driving up property taxes (by almost 10 cents on the average tax rate this year). It is also increasing the cost of the state budget and your family budget. 

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It is hard to look at these facts and not be concerned that VT’s health care system is circling the drain, and dragging us all down with it.

 

As with a lot of hard policy problems, our individual interests don’t add up to a stable, affordable solution that lets all Vermonters thrive.

Our providers and our people need state leadership to stabilize the system and ensure people have access to the care they need at a price we can all afford. 

 

Why are we in this pickle?

 

There are several reasons, and Hamery’s presentations provide some insight into why. 

 

For starters, our population is aging and getting more disadvantaged.

 

As we age and struggle economically as a state, more of us are covered by Medicare and Medicaid, both of which cap increases in costs.

 

As people age, the kind of care they need also changes.

 

Because Medicare and Medicaid rates are capped, only commercial rates can grow to compensate for health care inflation that is faster than the rate of inflation overall. This means commercial rates are too high, and that hospitals that serve a disproportionate number of our seniors and disadvantaged Vermonters may struggle most financially.

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This is what the population change looks like for two of our nearby hospitals (below).

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That data should give us all pause. 

 

When our hospital system is inefficient or overbuilt in the wrong places, or when other costs are increasing faster than inflation or the federal caps, the hospitals have to make up the difference elsewhere. Again, these costs fall back on the shrinking number of

 

Vermonters on commercial insurance, and as these numbers decrease, the commercial rates are likely to grow even faster. This is not sustainable. 

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We also need to strengthen our system of primary care, including for mental health. We must make sure we are treating people at the right level of the system, and we need to make sure we are accessing every available federal dollar to do so. This is a strong rationale for strengthening and beginning into the health care system the kinds of community care coordinators and community nurses on which our towns depend. 

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The continued losses by insurers may bring us to a point at which commercial providers will not be able to operate in Vermont. This may force Vermont to reevaluate a single payer approach. 

 

Hospitals and primary care providers cannot fix these problems on their own; they need state leadership. 

 

Good outcomes rarely come by accident.

 

They are the product of hard work.

 

There is no future that is affordable, including in school budgets, that does not depend on robust health care reform.

 

I will be pushing hard for health care affordability, building on some of the work I and other legislators did last year related to:

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• community care coordination and nurses, 

• reference pricing and hospital reviews, 

• reducting paperwork for providers,

• pharmacy benefit managers,

• expansion of Dr. Dynasaur to young adults,

• prescription costs,

• supporitng provider discretion and reducing preauthorization paperwork related ot basic prescriptions, and to

• increasing primary care reimbursement rates (in the budget).  

 

However, we need a Governor who is willing and able to lead on the hard conversations needed to create a Vermont – and health care system– that works for everyone.

 

Last session, the Governor insisted that Act 51 of 2024 include language specifying that he and his agencies are still in charge of health care reform and transformation. It’s been almost 8 years. I look forward to seeing their recommendations, but after 8 years, we can’t afford to wait any longer.

As with every serious policy challenge in our state, getting ahead of our housing crisis will also help address the affordabilty crisis in health care. Stay tuned for more on the topic of housing.