In an exclusive interview, Modern Healthcare
reporter Andis Robeznieks talks with Vermont Gov. Peter Shumlin about recently enacted legislation that will steer the state toward a single-payer healthcare system in 2014. Shumlin discusses the current state of healthcare in Vermont as well as his views on the debate over federal healthcare funding. Andis Robeznieks:
Hello, this is Andis Robeznieks with Modern Healthcare
magazine. I'm speaking with Peter Shumlin, governor of Vermont, who Modern Healthcare
readers selected as one of the most influential people in healthcare. Gov. Shumlin, in May you signed legislation that puts Vermont on the path to be the first state to have a single-payer healthcare system by 2017. Can you briefly describe the challenges your state was facing, and what led you to believe the single-payer system was the answer to solving your state's runaway healthcare costs? Gov. Peter Shumlin:
Well, first of all, I'm hoping to make it in 2014, and having said that, there are a couple of challenges. The first is the same dilemma that America is facing: When we are spending more of our gross national product on healthcare than any other nation in the world, and our outcomes are not as good. In other words, we're not as healthy as countries that spend much less. So, we're trying to develop a system here in Vermont that joins the rest of the developing world in doing three things: The first is to ensure that healthcare is a right and not a privilege. Second, that healthcare insurance follow the individual and not be a requirement of the employer, which we think is a huge job strainer and moving to a publicly funded system. And finally—and perhaps most importantly—to use our healthcare dollars to make Vermonters healthier by emphasizing preventive care, good diet, getting off smokes, good living, and move from a fee-for-service system to one where we reimburse our providers based upon keeping Vermonters healthy.
Robeznieks: What role do you see private payers having in this system, and what would be the role of government?
Shumlin: Well, one of our challenges is to spend less money with better healthcare outcomes. Let me just talk about the big picture for a second. Right now, we have watched Vermont's healthcare spending double over the last 10 years. Our spending has moved from roughly $2.5 billion as a small state of 625,000 people to over $5 billion. The scariest number is that at a time when Vermonters on average are making the same amount of money that they were making a decade ago, we're going to ask them to spend an additional $2,500 per living Vermonter every single year by 2015 just in healthcare growth. That's not sustainable. So, there's a few things that we need to do: The first is to ensure that we're using our healthcare dollars on making people healthy—get rid of insurance and companies' profits, waste and inefficiency and this crazy fee-for-service system where the more providers do work, the more they get paid in a system that under-reimburses them if its Medicaid or Medicare. They only get 40 cents on the dollar, so we want a clear, smart pass to payment that helps our providers thrive, gets the insurance companies off their backs and allows them to make people healthy again. To do that, we believe we should contract with one single insurance entity to make our payments so we stop spending 8 to 9 cents on every healthcare dollar just chasing money around, and use those dollars instead to keep Vermonters healthy.
Robeznieks: What about critics who say there's just too much government in healthcare, and what does a system like this do to make the government's role even bigger?
Shumlin: Well, you know, I've got to be candid with you. I think those who distrust government in healthcare have every reason to do so. Government has gotten this one wrong every single time. When government tries to do healthcare reform, we tend to confuse expanding access for those who don't have insurance, which is an important goal, with also doing cost containment. Finding smarter ways to spend our dollars on healthcare means that if all of the other profit-making entities and efficiencies exist. So the role of the government in this case is to ensure that everyone has access. Healthcare, as I mentioned, is a right, not a privilege, but most importantly, that we reduce the cost of healthcare. No listen, many of us have lost confidence in government over the last several months as we've watched Washington be paralyzed by partisan bickering. If you took as an example all of the Tea party proposed cuts to our federal budget and you implemented them and you took all of the revenue that Democrats proposed raising from the wealthy and you put them together, you would still have the same federal spending challenges, the same growth in budget and the same trillions of dollars in debt that you have right now in just three years because healthcare spending is rising faster than can be sustained at every level, including Medicare and Medicaid that cost the federal government. So if Vermont can get this cost-containment system right, I think it will return confidence in government's ability to do healthcare right and it will show that government is in fact the only entity that can bring the players together and create a healthcare system of out of a nonsystem, which is what we have right now.
Robeznieks: Well, besides implementing the single-payer mechanism, what other important elements do you see as being part of Vermont's healthcare reform?
Shumlin: Well, really there's three areas that were going to get the money and make this work: The first is we're going to have the first system in the country where as a resident, you're issued a Green Mountain healthcare card. That's your insurance card. The only requirement to get that card is if you're a resident of the state of Vermont. When you go to your healthcare provider's office and you come out of the providers'—sorry. When you go to see your healthcare provider and you come out of the office, you go up to the counter, and with that Green Mountain healthcare card, the single insurer tells you in seconds how much they're paying and how much you must pay, and they don't leave the office without adjudicating your bill anymore than you would leave the grocery store without paying your bill there. That saves 8 to 9 cents on the dollar. In Vermont, that's about $500 million in what we call low-hanging fruit. Second, that same Green Mountain card will be a pipeline to your medical records so that your provider that's treating you can see what all the other providers have done for you over the years, what medications you're on and your entire health history tests and the rest. That's not duplication waste and inefficiency. So there's huge money there. And third and finally, we want to be the first system in the country where providers are reimbursed for keeping you healthy instead of the fee-for-service system that's wasting huge resources and requiring duplication and requiring volume in the amount of care provided as opposed to quality in the amount of care that is provided.
Robeznieks: Are there any implementation milestones we should be watching for?
Shumlin: Sure. We have appointed—I'm going to be appointing shortly a five-member board to design this healthcare cost-containment system that I've just described. In 2013, we will present that to Vermonters. We're doing a cooperation with their business community, our healthcare providers, our consumers and everyone else who is working so hard in the healthcare system. Then in 2013, we'll come up with a publicly financed system that will pay for our new healthcare system. And we hope to have it in place in 2014. Now there's a couple of things that we need: The first is we need a way or a change in the current lot in the federal healthcare bill passed by President Obama that currently precludes single-payer systems from going into effect until 2014—until 2017. We need that date changed from 2017 to 2014. The president supports that. He told me and the other governors in January that he believes that the states must be and should be the laboratories for change in healthcare, the laboratories for true reform as long as we're not reducing federal standards, which we would not in Vermont. So that's the one thing that we need from Congress. The second piece is we're going to need all kinds of waivers from CMS to ensure that we use our Medicaid and Medicare dollars, put everybody in a single pool and let Vermont plug those federal dollars into our self-contained system. And that we can do with the great cooperation of the secretary and so many other people in the Obama administration who have been cooperating with us extremely well.
Robeznieks: OK. Well, thank you very much, governor, for speaking with us today
Shumlin: Well, thanks so much for having me, and let me just say in closing there are those who believe that this plan is too ambitious, that it is trying to chew off too much, and what I keep saying to people here in Vermont who were skeptics of what we're trying to do: Listen, in a small rural state, this isn't just about dollars; it's about preserving our existing healthcare system. We're losing our rural healthcare providers, and we're a rural state, our primary-care providers because they're not getting paid enough to survive here. When you get 40 cents on a dollar for a dollar's work, you can't pay your bills. So this isn't just about spending less on healthcare for better outcomes, it's also about ensuring that we maintain a quality healthcare delivery system that we're going to lose if we don't reform the system of both how we deliver care and how we pay for it. So big stakes. And I keep saying to those who are skeptical: ‘What if we do nothing? What if we join the other 49 states and Congress in pretending that we don't have a problem here? Where do you think the money's going to come from in America to allow us to compete and to come up with the money to pay for the current system?' I keep saying we can't compete for jobs. We can't compete for economic prosperity in a global economy unless this country starts to spend less on healthcare for better outcomes. It's going to kill business. It's going to kill job creation. And it's going to destroy our economic future.
Robeznieks: Well, thank you again.
Shumlin: Hey, good talking to you.
Andis Robeznieks: I was wondering if maybe we should have had something a little uplifting at the end, but—
Shumlin: Well, I'll give you something uplifting. You ready? If Vermont can get this right, I'm convinced that other states will follow us, and we have a bright economic future. That we'll put an end to the era where we watched our healthcare spending rise at rates that couldn't be sustained and where we ensured that our most vulnerable citizens didn't have quality access to healthcare to keep them healthy. So, we think we're on the right track in Vermont. If we can get this right, we're confident that others will join us and leave a bright future.
Robeznieks: Well, thank you again, governor.
Shumlin: All right. Go get 'em.
Robeznieks: This has been Andis Robeznieks with Modern Healthcare,/i>, and I've been speaking with Gov. Peter Shumlin of Vermont, who Modern Healthcare readers voted as one of the top influential people in healthcare.