11-3-14 – Vermont’s FrankenHealth Online: A Belt and Suspenders Approach

by Chris Campion

Vermont’s single-payer experiment – foisted on the witting and unwitting populace like a massive

Frankenstein experiment gone horribly and expensively wrong – seems to be flailing badly, just as the gubernatorial election looms right around the corner.  Like most things involved with Vermont Health Connect, the timing couldn’t be much worse, both for the users and for the politicians who have saddled Vermonters with a $100 million dollar “exchange” that doesn’t give them anything they didn’t already have access to.

But hey, it’s the right thing to do, if you’re buying votes looking out for the little guy.  As the Rutland Herald notes:

The state is asking customers not to use the Vermont Health Connect website to make changes to their policies during the upcoming open enrollment period, when it is preparing for a high volume of those requests.

So:  $100 million dollars – roughly 1/3 of the Transportation Fund for 2015 – have been chucked down the money pit and given us a system that will not be available for usage.  “Open enrollment” usually means “Open for enrollment”.

But not in Vermont.  In Vermont, you spend $100 million and you get “closed for enrollment”.  You get phone calls, pencil and paper, and manual labor.  And what does the state have to say to explain why Vermonters are being backhanded, repeatedly, by a failed implementation?  Buy suspenders: suspenders:

During a briefing Tuesday before the Legislative Committee on Health Reform Oversight, Lawrence Miller, chief of health care reform, told the committee his staff is preparing for as many as 60 percent of health exchange customers to make some sort of change to their policies.

“It’s a belt-and-suspenders approach,” Miller said of preparations as 22,000 households are expected to begin renewing their policies when open enrollment begins Nov. 15.

Miller’s stating the obvious here, which is have a backup plan.  But if the Vermont Health Exchange was never implemented, people could still have still signed up for their health care, either at work, through Medicare (which has been the bulk of “new” enrollees, people who already had access to health care but had not signed up for it), or VHAP (now wrapped under Green Mountain Care).  Which begs the question: Why buy an exchange?

But don’t worry, those tax dollars sure buy a lot of pencils:

The website, however, will not include a page for customers making changes while renewing their policies. Instead, Miller urged customers making changes — either to their policies or to their personal information to determine subsidy eligibility — to do so either on paper or by contacting one of the exchange’s navigators. 

Due to the state’s inherent inability to do much at all, we’re going to spend $100 million to fall back onto pencil and paper, when we didn’t need to, other than to satisfy the political ambitions of a frequently-absent governor.

Health care access was never, and continues not to be, the problem.  Solving the increasing costs of health care was not the problem, either, despite claims of un-bendable cost curves.  The reason that private insurer rates go up so much every year is primarily due to the government’s already-existing single-payer program:  Medicare.  When Medicare doesn’t reimburse at the full cost of care – which it doesn’t – then the costs are picked up by the insurers in the private sector in the form of increased rates.

The cost curve is a feature, not a bug, of single-payer.  Since many doctors refuse Medicare patients, because they like to be able to keep the lights on in their practices, the inevitable conclusion for single-payer is reduced access to health care, as more doctors decide they do not want to participate in a system that doesn’t reimburse them at cost.

Would a mechanic keep his doors open for long if what he was able to be paid by his customers didn’t cover the costs of materials, labor, and overhead?  So why is that same economic premise any different for health care?  Financial reality doesn’t change just because someone is sick; things still have costs.  They cannot be waived away by magical thinking, or by promises by under-qualified and ambitious politicians.

If you really want the insurance rate climb to slow down, increase Medicare reimbursement rates.  That would remove the rate burden off the private insurer, more doctors would participate, and there would be less need for the spending of $100 million dollars on nothing much at all.  This will mean a de facto increase in Medicare withholding, but those costs have to be borne one way or another.  But even now it looks like Medicare won’t be giving Vermont the control and dollars that it anticipated under Act 48.  There’s nothing quite like an undelivered promise about your health

Speaking of cost curves, like the Vermont state budget going up 2x/3x the rate of economic growth, there’s another question to be asked: How many Vermonters could have been insured with that $100 million?  Instead of this being forced to ask this question:  How many pencils does $100 million dollars buy?

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