ACT 48: AN ACT CREATING A UNIVERSAL AND UNIFIED HEALTH CARE SYSTEM- UPDATE 2012

Harry Chen, MD, Commissioner of Health

Why our health care system is broken

It’s too costly and contains no mechanism for cost control.

It is funded in a manner which is unfair, inefficient and inequitable.

Too many people are uncovered (47,000) and underinsured (160,000)

And it doesn’t provide Vermonters with the best value for the health care dollars we spend.

We spend almost 20 cents of every dollar we earn on health care, more than the national average

The Opportunity of Health Care Reform

Cover all Vermonters regardless of age income, or employment status

Preserve quality and patient choice

Separate health care from employment

Lower health care spending

Improve health

Create jobs and economic opportunities

Goals

A sustainable budget for health care in Vermont

Achieve and maintain a reasonable rate of growth in overall spending closer to economic growth

Quality maintained or improved and health improved

Changes in health care payment and delivery that are necessary to support these goals

What did Act 48 do?

Green Mountain Care Board Cost containment Payment reform Workforce development Oversight of almost all aspects of health policy

Vermont Health Benefit Exchange Reorganizes purchasing of health insurance Allows many uninsured Vermonters to get tax credits

for coverage Detailed Planning for Green Mountain Care (single

payer) Operational planning Financing plan

H.202 Timeline

CMS: Earliest approval of exchange waiver

SFY 2013July 12-June13

Admin delivers Financing Plan toGeneral Assembly

Board: draft recommendations on GMC benefits for financing plan

Board: approves exchange benefits

General Assembly: Enact financing plan

Admin: Seek Exchange waiver to establish GMC

Green Mountain Care begins (earliest possible)

Board sets provider rates & system budgets

Board approves insurance rate increases & CON

SFY 2014July 13-June14

General Assembly: Enact GMC budget

Board: Proposes GMC budget

SFY 2015-2017

Possible waiver approval of GMC 2015 or 2017

General Assembly:Enacts legislation creating board, creating Health Insurance Exchange and outlines Green Mountain Care

SFY 2011Jul 10-Jun11

Hsiao report to legislature

Administration: Develop medical malpractice proposal

Green Mountain Care Board established

General Assembly: Pass legislation finalizing implementation and other issues from strategic plan

SFY 2012Jul 11-Jun12

Board: Approve GMC benefit package

Health Care Reform Timeline

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Green Mountain Care Board: Who are they?

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5 members, appointed by the Governor with advice and consent of the Senate

Chairwoman Anya Rader Wallack, Ph.D. of Calais

Al Gobeille, of Shelburne Karen Hein, M.D. of Jacksonville Con Hogan of Plainfield Allan Ramsay, M.D. of Essex Junction

04/18/23 12

Data analysisBenefits standards

Data analysisBenefits standards

Can planning, policy and regulation be coherent and coordinated?

More steps along the way …

2014 – Vermont Health Benefit Exchange Provides new federal tax credits to cover

uninsured Vermonters Administrative structure for the single

payer Upon availability of federal waiver (2017

at latest) Vermont implements single payer

“Health Benefit Exchange”

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A mechanism for purchasing health insurance

Simplifies shopping – like Expedia Standardizes insurance options “Qualifies” health plans Administers new federal tax credits Provides guidance and quality ratings to

people shopping If state doesn’t develop, feds will

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Who is eligible to buy insurance in the Exchange?

Open to all citizens and legal immigrants who live in Vermont (except those in prison)

Open to small employers that offer coverage to all full-time employeesSmall employer = up to 50 employees in 2014; 100 employees in 2016

In 2017, states may choose to include large employers, too.

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What are they buying?

Qualified health plans: Provide “essential health benefits” Are certified by the Exchange as meeting certain standards

and requirements Are offered by Vermont-licensed insurers who agree to offer

at least gold and silver level plans

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Uninsured individuals with income under 400% FPL (and no access to an employer plan) are eligible for premium tax credits for enrolling in plans through the Exchange

Tax credit amounts are based on income

Individuals under 250% also receive reductions in cost-sharing (including deductibles and co-pays)

Why buy in the Exchange?Tax Credits and Cost-Sharing Subsidies

Why do we need an Exchange ?

Individual tax credits are available only through the Exchange

Funds to design and build the Exchange and revamp our eligibility, enrollment and claims processing for Medicaid to serve a larger population

Reduced complexity of insurance purchasing Federal limitations on waiver Potential for single claims processing

mechanism

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Exchange Internal Timeline/Activities Summer-Fall 2012

Finalize outreach & education plan and Navigator Program Present GMCB with Essential Health Benefits and Plan Design

recommendations Develop scope of work and contract for IT system integrator

(SI) Develop informational Exchange website (shell) Explore and finalize wellness offerings through Exchange --

offerings and quality measures in line with Healthy Vermonters 2020 and Blueprint for Health

Begin CMS Design Reviews (federal requirements & oversight)

Winter-Spring 2013o Submit sustainability and transition plans to state

legislatureo Lay the groundwork for outreach, Navigator program, and

internal/external training o SI work ongoing

Vermont Health Benefit Exchange

HIX Internal Timeline

Summer 2013o Full-scale launch of outreach campaign o System testing o Train Navigators, call-center staff, state support

staff, and grass-roots advocates October-January 2013

o Open Enrollment on Exchange website o Navigators providing enrollment assistance in the

fieldo Call-center up and running

January 1, 2014o Exchange health coverage active

Vermont Health Benefit Exchange

New: Proposed Visual Identity

Vermont Health Benefit Exchange

The visual identity of the Exchange will be a public face of health reform in Vermont. A range of possible names, taglines, logos, color schemes and images were developed. Then, focus groups of Vermonters – including both individuals and small business owners – were asked to give feedback and discuss their reactions. This is the result.

Green Mountain Care (single payer)

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Occurs after Affordable Care Act waiver and other requirements are met

All Vermonters covered by virtue of residency

Legislative concerns re: in-migration of people for benefits

Penalties for falsifying residency De-coupled from employment

What about the financing?

Report to the legislature in 2013two financing plans:

one with continued private premiums one with all public financing

Maximize federal funds and spread costs fairly Many issues to be resolved:

What will the overall costs/savings be? How much federal $ will we get? How do we deal with cross-border issues? How are public and private coverage integrated? How do we incorporate self-insured employers?

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December 14, 2011

HEALTH CARE REFORM FINANCING:LISTENING SESSION

Listening Session’s Purpose Legislature Passed Act 48, An Act Relating to

a Universal and Unified Health System Act 48 requires financing plans to be presented

in 2013 Public input is important & necessary to inform

the financing plans o “The state must ensure public participation in the

design, implementation, evaluation, and accountability mechanisms of the health care system.” –ACT 48

Listening sessions provide an opportunity to express preferences for the type of principles and funding sources that will help shape the financing plans due in 2013

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Organization of the Session

Principles of a Health Care Finance System What are

principles and why are they important?

Discuss in small groups

Express preferences

Potential Funding Sources Funding generally Payers and funding

sources Health care

expenditures and state revenues

Small group exercise

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Examples of Principles for a Financing System

Example principle: Equity Revenue system should take into account ability to

payo Example, progressive federal & state income tax

Example principle: Exportability Taxes should be paid by non-residents when

possibleo Example, Alaska receives 83% revenue from oil

royalties

Example principle: Stability Relies on a balanced variety of revenue sources

o Example, Vermont’s revenue mix is among most balanced in Nation

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Funding Sources: Who Pays Now?

Source: BISHCA, JFO, MEPS Data30

Potential Funding for Health Care Financing System

Individuals: beneficiary premiums Individuals: out of pocket spending for

services General tax on businesses Payroll tax, both businesses and

individuals Income tax Property tax Consumption taxes

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Benefits Listening Sessions May – June 2012

GREEN MOUNTAIN CARE: VERMONT’S HEALTH CARE REFORM

Listening Session’s Purpose

Public input is important and necessary to inform the design of the benefits

“The state must ensure public participation in the design, implementation, evaluation, and accountability mechanisms of the health care system.” –ACT 48

Listening sessions provide an opportunity to express preferences that will help shape the benefits for Green Mountain Care

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GMC Benefits: focus for today

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Leading Causes of Hospitalization – For Chronic Disease

Leading causes of chronic disease hospitalization: osteoarthritis mental health or substance abuse cardiovascular disease-related

Although osteoarthritis is the leading cause at 4% of all hospitalizations in Vermont:

the 3rd – 6th highest causes are related to cardiovascular disease & together, make up 9% of all hospitalizations.

Mental health and substance abuse is indicated as the cause of 3% of hospitalizations.

2008 Hospital Discharge Data

Cardiovascular disease-related = 9%

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Chronic Disease Prevalence

6%3%

11%

27%

7%

29%

7%

Arthritis Hypertension Asthma CVD Diabetes Cancer COPD

2010 BRFSS

Arthritis is the most common chronic disease in Vermont, followed closely by hypertension.

Asthma impacts approximately 1in 10 Vermonters. Slightly fewer Vermonters have CVD, diabetes, or

cancer. COPD effects 3% of the adult population.

Coverage and Cost are Connected

In a universal system, everyone is covered and everyone pays into the system

What are our priorities as a community? How do we decide what care to pay for? While ensuring people get what they need Promoting health and wellness

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Shift the Emphasis of Care

In the US health care system there is not enough focus on and utilization of preventative medicine and chronic disease management, which improve health outcomes and curb escalating health costs

Studies have shown that prevention can: prevent chronic diseases (such as type II

diabetes) Chronic disease management can:

prevent avoidable Emergency Dept visits, improve outcomes, prevent the need for invasive surgeries, and save lives

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Factors Influencing Health Status

Determinants of Health

Genetics 30%

Behavioral Patterns 40%

Health Care 10%

Environmental Exposure 5%

Social Circumstances 15%

41Adapted from Schroeder, SA. We can do better-Improving the health of the American people. NEJM 2007;357:1221-8

Act 171: 2012 Health Reform Bill

Insurance market reforms compliant with the federal Affordable Care Act

Integration of Medicaid with the Exchange: Global Commitment, Dual-Eligibles, and other waivers

Creation of a viable and dynamic exchange that supports Vermont's health care reform goals

Refinement of the functions of the Green Mountain Care Board- CON, hospital budgets, rate review

Malpractice Reform

Exchange/Insurance Compliance with ACA

Employers in the Vermont Health Benefit Exchange 2014: 50 or fewer 2016: 100 or fewer

Allows bronze plans and dental plans to be sold with QHPs. Merges individual and small group

Provides parameters about Navigators and Brokers GMCB must approve a full range of cost-sharing

structures in the Exchange for each actuarial value and allow insurers to offer wellness rewards and discounts

“

Malpractice Reform

• Certificate of Merit • Pre-suit mediation • Medical malpractice reform

report

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Begins Feb. 2013

Begins Feb. 2013

Health Reform: Building on a Strong Base Blueprint for Health Vermont Information Technology

Leaders Medicaid Global Commitment Waiver

Coverage Expansion “MCO Investments”

Federally Qualified Health Centers

Practices and Populations with Access to Team-Based ServicesThru June 2012

* Based on 2010 Vermont Population, U.S. Census Bureau

Approximate % of Total HSA Population in Practices with Access to Team-Based Services*

21% - 26%

26.1% - 66%

66.1% - 96%

Newport6 Practices

18,612 Patients66% Total Pop.

Rutland6 Practices

33,300 Patients53% Total Pop.

Burlington20 Practices

106,231 Patients60% Total Pop.

Barre9 Practices

52,183 Patients80% Total Pop.

Randolph5 Practices

18,739 Patients53% Total Pop.

St. Johnsbury6 Practices

20,725 Patients73% Total Pop.

Bennington8 Practices

19,521 Patients49% Total Pop.

St. Albans11 Practices

29,505 Patients66% Total Pop.

Middlebury7 Practices

23,573 Patients83% Total Pop.

Brattleboro2 Practices

8,361 Patients26% Total Pop.

Morrisville4 Practices

25,047 Patients96% Total Pop.

Upper Valley2 Practices

3,473 Patients21% Total Pop.

Springfield7 Practices

24,945 Patients87% Total Pop.

Windsor2 Practices

11,510 Patients86% Total Pop.

Patient populations served by Patient-Centered Medical Homes in Vermont:

Children, 16, 17%

Adults, 19, 20%

Adults and Children, 61,

63%

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Current Payment Systems Do Not Support High Quality Cost Effective Patient Care

Volume based – (FFS, DRG’s, Per diems)

Encourages visits and procedures

Does not encourage efficiency, quality, coordination or value.

New payment methods must be balanced to address utilization, cost, quality and patient experience (value)

The Vermont Blueprint for Health Central to Payment and Delivery System Reform

Success of all depends on primary care

capacity, quality and coordination

BLUEPRINT FOR HEALTH

Payment reform goals

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Shared Interests: PCPs, Specialists, Hospitals, Community-Based Services

Intense Focus on high risk/high cost patients Better coordination of care

Mental Health and Substance Abuse Services, Home Health, SNFs/NHs

Four dimensions of performance (balanced) Reduce growth of total cost of care Reduce avoidable utilization Improve adherence to standards of care

(condition specific) Measure patient experience

What about Washington?

Supreme Court Decision Individual mandate survived as a tax. Medicaid expansion is optional. Are we done with court challenges?

2012 Elections Congress could repeal ACA. New President could ???

ACA Waiver for Green Mountain Care 2017 is earliest date in law. Anything sooner would require legislation.

The Logic of Health Reform: Where is Population Health?

The Best Opportunity To Maximize Health

Leverage the Far Larger Personal Health System to Achieve Population

Health Goals

NOT TO SCALE

Increasing

Individual Effort

Required

Increasing

Population Impact

Source: Adapted from Frieden TR. A Framework for Public Health Action: The Health Impact Pyramid. Am J Pub Health. 2010;100(4):590-5.

Opportunities for Public Health

The finish line

Health care is a right – all Vermonters are covered

Health care costs are sustainable – closer to our rate of economic growth

Providers are paid fairly Everybody pays their fair share Vermont is the best place to do business Vermont is the best place to practice

medicine Vermont is the healthiest place to live

Summary

Act 48 creates a responsible plan for health care reform that includes opportunities for Vermonters to participate. We are making progress toward that goal.

Without reform, costs will grow faster and system will continue to erode.

With reform, we can cover all Vermonters, achieve substantial cost savings and improve overall health.

— Dr. Martin Luther King Jr., 1966

"Of all the forms of inequality, injustice in health care is the most shocking and inhumane."