Hospital CEOs Concerned About Single Payer
Of all the constituencies Gov. Peter Shumlin will need to win over in order to move forward with single-payer health care, perhaps none are as powerful as Vermont’s hospitals. But hospital CEOs worry that publicly financed health care could harm the quality of medical services.
Jill Berry Bowen, CEO of Northwestern Medical Center in St. Albans, says she’s an enthusiastic proponent of Shumlin's plan to overhaul the way health care is delivered in Vermont.
The Democratic governor wants to upend the payment model, so that providers are compensated based on their patients’ health, rather than the volume, and type, of treatments they provide.
“I think we’re definitely very on board with getting paid for performance, our quality indicators and our outcomes,” Bowen says.
But there’s another key part of Shumlin’s reform agenda that has Bowen and other hospital CEOs more worried. And that’s his plan to replace private health insurance premiums with public financing.
“I think that it’s going to be more pressure on the delivery system to reduce costs, and will that ultimately impact the ability for folks to access care?” Bowen says.
Shumlin wants to do away with private premiums and employer-sponsored health plans, and replace them with new taxes that would generate about the same amount of money. Shumlin hasn’t said how he’d raise the approximately $2.2 billion needed to fund the plan, but this financing concept is the essence of what’s become known as “single payer.”
The problem, according to hospital CEOs, is that public revenues often come in under target.
“I think what concerns me the most if that we move into a single-payer system, and a single-payer system is not adequately financed, and it ends up becoming mercy to yearly budget crunches and budget cuts that the state is faced with,” says Thomas Dee, CEO of Southwestern Vermont Medical Center in Bennington.
"I think what concerns me the most if that we move into a single-payer system, and a single-payer system is not adequately financed, and it ends up becoming mercy to yearly budget crunches and budget cuts that the state is faced with." - Thomas Dee, CEO of Southwestern Vermont Medical Center in Bennington
Dee says Vermonters need look no further than this past summer to find justification for this concern. Faced with a $31 million revenue downgrade, lawmakers and the Shumlin administration opted to solve the budget shortfall by reducing the amount of money hospitals are paid to treat Medicaid patients.
“And to have random cuts take place that are not based in a rational system is not going to service the health care needs of our population in Vermont,” Dee says.
Robin Lunge, Shumlin’s director of health care reform, says public financing is the only surefire way to ensure that everybody in Vermont has insurance. Lunge says that the administration is working to develop a public financing plan that will ensure revenues sufficient to pay for annual increases in medical spending.
“I don’t think Vermonters will want to under fund their hospitals or their doctors. I think Vermonters feel having a quality health care system is important,” Lunge says.
Hospitals account for about 40 percent of the approximately $5 billion health care industry in Vermont. And they collectively employ about 15,000 workers. Bea Grause, the CEO of the Vermont Association of Hospitals and Health Systems, says hospital administrators will work closely with Shumlin on certain aspects of system reform.
“But we certainly will come up against issues where we’re going to have to agree to disagree,” Grause says. “And public financing may be one of them.”
Assuming Shumlin is reelected in November, he says he'll unveil his public financing plan early next year. And if he does, hospitals may emerge as its most powerful opponent.