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Explore our coverage of government and politics.

Health Care Providers Say They're 'Cautiously Optimistic' About All-Payer Plan

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A new health care payment system being proposed, known as "all-payer", is currently under review by the Green Mountain Care Board. Health care providers in the state say they're 'cautiously optimistic' about the proposal.

A number of health care providers say they are "cautiously optimistic" that the implementation of a new payment system known as “all-payer" will help reduce costs and allow them to provide a higher quality of service.

There seems to be a consensus in many parts of Vermont's health care community that there's a pressing need to explore payment reform options. That's because health care providers believe that the current "fee-for-service" model, one that reimburses for every procedure and test, needs to be changed for fear it could eventually bankrupt the state or lead to a significant reduction in care.

Jeff Tieman is the new head of the Vermont Association of Hospitals and Health Systems. Tieman says it’s time to move to a system that focuses on keeping Vermonters healthy.

"I think the most important point is that the status quo, especially in terms of costs, is just not sustainable," Tieman says. “We have to move to a system that rewards value instead of volume and that really focuses on keeping people well instead of waiting until they're acutely ill to begin treatment."

Many doctors feel the same way, according to Paul Harrington, vice president of the Vermont Medical Society.

"Nobody likes the current health care system and the Medical Society believes this is a sincere effort to move in a good direction,” says Harrington.

"Nobody likes the current health care system and the Medical Society believes this is a sincere effort to move in a good direction." — Paul Harrington, VP of the Vermont Medical Society

Julia Shaw is a policy analyst in the office of the Vermont Health Care Advocate. She says things definitely need to change.

"The cost of our health care system is growing too rapidly,” says Shaw. “And I think this is a promising way to address that and really start to bend that curve." 

Under “all-payer,” providers would be reimbursed based on quality of service and positive health care outcomes.

Tieman of the Hospital Association is hopeful that paying providers to keep people healthy could bring huge benefits to patients with chronic illnesses. He says this is important because these Vermonters account for roughly 85 percent of all health care expenditures.

"If we don't take proactive steps to both prevent illness from happening in the first place and then properly manage it once it does we will eat ourselves alive with costs,” Tieman says. “So part of this 'all-payer’ model is to address exactly that issue and make sure that people are managing their chromic conditions and staying as healthy as possible."

"If we don't take proactive steps to both prevent illness from happening in the first place and then properly manage it once it does we will eat ourselves alive with costs. So part of this 'all-payer' model is to address exactly that issue." — Jeff Tieman, head of the Vermont Association of Hospitals and Health Systems

And Paul Harrington of the Vermont Medical Society thinks one positive result of shifting to the “all-payer” model is that doctors will be able to spend more time with their patients.

"I think that's going to be a real benefit,” Harrington says. “More time between physicians and patients and hopefully more Vermonters thinking abut their diet, exercising more and being partners in their improved health." 

But both the hospitals and the doctors say the plan won't work unless the government makes big changes in how it pays for health care. They say that the current financial structure of the Medicaid program could undermine the “all-payer” effort.

Because Medicaid significantly underpays providers for their services, these costs are shifted over to private health insurance premiums.

Harrington says this problem has to be addressed in order for the “all-payer” model to succeed.

"Vermont Medicaid has to be a more responsible payer,” says Harrington. “It has to reimburse fairly and not continue to cost shift that's probably my biggest concern."

"In this kind of model ... there are some financial incentives to provide less care. So really what the model needs is checks and balances to ensure that patients get the care that they need." — Julia Shaw, policy analyst in the office of the Vermont Health Care Advocate

And Julia Shaw of the Health Care Advocate's office wants the “all-payer” system to include consumer protections to ensure that patients get appropriate care.

"In this kind of model, where providers are paid basically for treating a population, there are some financial incentives to provide less care," Shaw explains. "So really what the model needs is checks and balances to ensure that patients get the care that they need."

The Green Mountain Care Board will hold its next public hearing on the "all-payer" plan on Thursday, Oct. 6 in Burlington.

The board hopes to vote on the proposal by the end of the month.

Correction 1:02 p.m. 10/6/16 An earlier version of this story incorrectly transcribed a quote from Julia Shaw of the Vermont Health Care Advocate. Shaw said there are "financial incentives to provide less care," not "financial disincentives."

Bob Kinzel has been covering the Vermont Statehouse since 1981 — longer than any continuously serving member of the Legislature. With his wealth of institutional knowledge, he answers your questions on our series, "Ask Bob."
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