Report: Vt. public health care cost could top $9B

November 1, 2011 - 8:00 PM

MONTPELIER, Vt. (AP) — New projections by the state of Vermont say a public, universal health care system would cost between $8.2 billion and $9.5 billion a year — roughly $13,000 to $14,000 per resident — by 2020, but that sticking with the current system based on private insurers would cost even more.

Without a health care overhaul approved by lawmakers this year, including a new law that could move Vermont closer than any other state to a Canadian-style single-payer system, costs would surpass $10 billion by 2020, the report said.

Lawmakers asked for the cost estimates by Nov. 1, but they still must determine how to pay for the new system. Officials said residents will get a chance to offer ideas at a series of forums to be held in November and December.

No final decision is expected until early 2013 — a date that critics of Vermont's health care legislation note comes after the 2012 elections.

With or without the changes, spending on health care is expected roughly to double in the current decade from the $4.7 billion Vermonters spent in 2009, said a joint report issued Tuesday by Democratic Gov. Peter Shumlin's administration and legislative researchers.

Health care represented 10 percent of the state economy in 1992, but had nearly doubled as a share of the economy, to 19 percent, by 2009, the 45-page report said.

The report also said health care spending in Vermont has begun growing faster than elsewhere in the country, blaming a population aging faster than in most other states and previous efforts to improve coverage for the uninsured and under-insured, such as state-subsidized insurance for low- and moderate-income working people.

"In a way we've been a victim of our own success," said health care consultant Steve Kappel, who helped write the report. "As people get covered, spending will go up."

The goal of this year's legislation actually runs counter to that — a key target of lawmakers was to reduce cost growth while extending coverage to the roughly 10 percent of Vermonters still without it.

Supporters of Vermont's health care legislation say it will achieve savings by reducing paperwork, in part because doctors' offices will no longer need to file claims with multiple insurance companies. The report said other savings would include:

— Eliminating the role of insurance companies and consolidating public health programs — making them all one system — will save anywhere from $90 million to $149 millon a year by 2019, the report said.

— Simplifying the processing of claims would save hospitals, doctors' offices and other health care providers between $45 million and $90 million in savings by 2019. The report cautioned here, and in several other places, though, that these projections are just that, and are based on inexact science.

— Better management of health care data and records should reduce fraud, producing savings of between $20 million and $55 million a year by 2018, the report said.

— The largest category of projected savings would come from "changes in the care process," the report said. The focus here would be on redoubling efforts to make sure necessary care is delivered and unnecessary care is sharply limited. Among the strategies: better management of chronic diseases like diabetes and getting patients to have regular checkups so they don't end up in emergency rooms.

While Vermont's health care legislation had strong support in the Legislature and from Shumlin, not everyone is on board.

Darcie Johnston, founder of the free-market-oriented group Vermonters for Health Care Freedom, said increased state involvement in health care in recent years hasn't lowered costs.

"For 20 years we've done things through government control of health care and we've gotten where we are — Vermont's costs are increasing faster than nationally," she said.