By Patrick Flood
Editor’s note: Patrick Flood, of Woodbury, is former commissioner of the Vermont Dept. of Mental Health and the Department of Disabilities, Aging and Independent Living, and former deputy secretary of the Agency of Human Services.
Because of failed leadership and misguided waste of Vermonters’ money, our health care system is on the verge of collapse. This did not need to happen.
Once again, Blue Cross Blue Shield of Vermont is requesting unaffordable rate increases. This is largely because the high cost of care has drained the carrier’s reserves to the point that the organization is on the brink of bankruptcy. If BCBSVT goes bankrupt, our health care system will collapse, since its customers will be unable to obtain care and providers will be unable to receive payments.
We know why this is happening and how it could have been avoided. The people in charge of Vermont’s health care system, and many public advocates who pay close attention, have known for years what the problem is: most of our health care dollars have gone to hospitals to pay for unnecessarily high administrative costs and avoidable care. (Two studies commissioned by the Green Mountain Care Board and research by the Vermont Healthcare 911 coalition have demonstrated this conclusively.)
Meanwhile, primary care, mental health, home health and other providers of care have been starved for funding. The result is that costs have soared while access to care has worsened and many physician practices have closed or are facing closure.
It is shameful that our leaders have let this train wreck develop over the past decade when we all knew what the real solution was:
Strengthen primary care so every Vermonter has ready access to a doctor;
Strengthen mental health services to keep people with mental health issues stable and out of emergency rooms;
Strengthen services like home health to keep people out of the hospital and get them home sooner when they do go;
Ensure there is a network of long-term care services, including quality nursing homes, to meet the needs of an aging population.
Had we taken those steps, Vermonters would be healthier and overall costs would have been lower, especially hospital spending resulting in lower premium increases.
Instead, over the past decade we got woefully misguided initiatives like OneCare Vermont and the “all payer model,” which failed miserably to contain costs and wasted huge amounts of money. Administrative costs for OneCare alone were approximately $100 million.
Until recently, hospitals pretty much got what they asked for in budget increases. The one bright spot recently has been the oversight of the current Green Mountain Care Board to constrain hospital budgets. Sadly, without further bold actions, the Board’s efforts may turn out to be too little too late.
So, what can we do now? Half-steps are not going to cut it. The solution, as I see it, has three integrated parts.
First, GMCB needs to significantly reduce what hospitals can charge. The Board can approve different rates for each hospital so that those most responsible for the crisis, primarily UVMMC, can be assigned the greatest reductions.
Such reductions can stabilize BCBSVT while broader reforms are put in place. UVMHN has huge reserves that will allow it to weather such a change for a year or two. A crisis like this current one is why reserves exist; now is the time to use them.
Second, lower the rates the Medicaid program pays to UVMMC and use the savings to raise the rates Medicaid pays to primary care, mental health, home health and nursing homes. This is possible because the state of Vermont sets the rates in our Medicaid program. Raising rates for community providers would allow those providers to immediately begin to hire more staff and provide more prevention services, thus keeping people out of hospitals and reducing hospital spending.
A study commissioned by the GMCB showed that up to 30% of hospital spending is “avoidable,” meaning it could have been prevented if alternative services were in place. Even 10% of our total hospital spending would amount to over $300 million, enough to fully cover the costs of what needs to be done for primary care and other key services.
Third, begin working immediately on a comprehensive statewide health plan to determine what services we need in each part of the state to have the most efficient and effective health care system. This plan should be in our hands no later than Jan. 1, 2026.
Yes, this means our hospitals will have to make major changes. But it is far better for Vermonters to take a clear-eyed, data driven, thoughtful, systemic approach to planning than to have each hospital making decisions in their own financial interest.
Rest assured that there is more than enough money in our health care system to provide basic health care services to every Vermonter at an affordable cost. But we are wasting it in avoidable ways in hospitals, primarily at UVMMC. This can be changed quickly to save our system.
Or we can wait and let the bankruptcies start and watch more and more Vermonters drop their insurance coverage because they can no longer afford it.
