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Shields: Difficult Policy Choices

04/12/11 5:55PM By Jeff Shields
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Vital Signs: Vermont Charts A New Course For Health Care

(HOST) As the Vermont legislature prepares to launch a state-wide, single-payer health care insurance plan, commentator and Dean of the Vermont Law School, Geoff Shields, is trying to assess it's potential impact.

(SHIELDS)  President Obama's health plan already assures coverage to 95% of Vermonters.  All Vermonters are already guaranteed access to hospital and community clinic care by tax and other laws.

So, the Vermont legislation is primarily about cost containment, not access to health care.

So far, the legislature has been responsible in its approach.  It hired the leading expert in the country, the healthcare economist from Harvard, Professor William Hsiao, to lead the legislature and the Shumlin administration through universal coverage choices.  The report, which is available on-line, is a must read.

The report and the legislature's own deliberations flag several difficult policy choices as Vermont moves forward.

First, if the Medicaid funds do not come in as projected, then the Vermont payroll tax identified as the primary source of payment will have to take up the slack.  

Second, I question the assumption that Vermont can achieve the 25% "cost savings" projected in the report.  This is an awfully high number for a tiny state with generally ethical providers.  

Third, the report itself points out that the single-payer package contemplated provides LESS coverage than many insurance packages currently provided by Vermont employers.

Fourth, the Vermont legislature envisions that all the services covered (except Medicare) will be determined by state government.  The HR departments of Vermont employers will no longer run interference on insurance claims and performance with private insurers.  

Finally, healthcare insurance, while important, is currently but one of several state priorities, including the environment, education, economic development, energy and others.  The size of the single payer expenditures will so dwarf all these other initiatives that, I fear, it will crowd them out in terms of state priorities and focus.

I asked our HR department to project what the impact will be on Vermont Law School.  The probable outcomes are as follows:

The scope of insurance will be diminished both in services covered and the availability of out-of-network doctors.

The cost to our employees and to the law school may increase, given the payroll tax projections in the report.

Our employees will lose the benefit of our HR department's ability to negotiate effectively on their behalf.  While we will turn our advocacy to the state government, our leverage on behalf of our employees will be tiny compared to our current situation.

We and other employers will be forced into lobbying on an ongoing basis to deal with both the cost and the coverage issues.  

So, hey, as a law school dean, I should look at the bright side: lots of jobs for our graduates as lobbyists for decades to come as the payment mechanism, tax rate, coverage package and administration of this health-care initiative becomes the single largest state of Vermont expenditure.

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