Schubart: Health System Evolution

Sep 6, 2017

When I was young, Morrisville had three doctors, two dentists and the wood-framed, four-story, Copley Hospital, which had the town’s first elevator. Theoretically, there was competition, but price wasn’t the criteria by which we chose our providers, it was familiarity and trust.

All docs pretty much charged the same for an office visit. Our doctor was our trusted friend and on his advice, we went to Burlington for major surgeries or life-threatening illnesses.

In the ‘70s, when cities became employment and retail hubs connected by new highways, community hospitals began to compete for patients. New medical technology became a marketing edge but also a major cost-escalator. If Newport got the newest M.R.I., then St Albans wanted it as well. The proliferation of new medical technology ballooned costs and spurred more utilization. Relations between community hospitals and tertiary care hospitals grew toxic in this new competitive environment.

Acknowledging the failure of competition and for-profit services, Vermont set out to design a regulated network of distributed medical services based on cost, access, and need. Regulators made several critical decisions: first, Vermont would abandon the competitive model in favor of an integrated, collaborative, non-profit network with regulated investments in technology, appropriate to cost, utilization, and need.

Second, we will retire “fee-for-service” billing in favor of paying providers to maintain healthy communities. This moves us away from costly medical interventions toward prevention - which history has always shown to be less expensive and traumatic than remediation - and despite detractors' claims, this new system is working.

But with our absurdly short political cycles, it’s easy to lose our institutional memory and forget where we’ve come from and where we’re going. Many Vermonters would like to see a national health care system like the rest of the civilized world. But short of that, we’ve tried to optimize what we have, to ensure affordable and accessible health care for all. Recent efforts to second-guess and demonize the network we’re building only distract us from our goals.
 
Many are too young to remember how America was wired for phone and electricity by regulated for-profit monopolies which could earn a fair return on their investment while being required to service everyone equally. The Rural Electrification Act and Universal Service Fund brought light, power, and communications to all Americans. We can do the same in health care.