Healthcare savings? What healthcare savings? Did we promise savings?

BISHCA and JFO report to Senate Finance Committee

by Rob Roper

The Vermont Blueprint for Health was launched in 2003 and endorsed by the Vermont General Assembly in 2006 (Act 191) as “… a foundation which it intends to strengthen by broadening its scope and coordinating the initiative with other public and private chronic care coordination and management programs”.

According to its website, “The Blueprint is built on the premise that preventing disease and improving the quality of care for people with chronic illness are effective ways to reduce the overall demand for the highest cost treatment services; leading, in time to moderation in health care costs.” (Emphasis added)

On Wednesday, Steve Klein of the Joint Fiscal Office, Steve Kimbell, Commissioner of BISHCA, and a consultant Steve Kappel presented to the Senate Finance Committee their expectations for potential savings under Act 48, the single payer healthcare law.

The Blueprint for Health plays a couple of interesting parts in this story. It is primarily of interest because the projected savings for that program, as testimony pointed out, never materialized. This, of course, calls into question just how much faith we should put in any projected savings we hear about regarding Green Mountain Care.

As Sen. Tim Ashe (D/P-Chittenden) put it, “What I’m struggling with is… in terms of the projections of savings. I am struggling with taking the numbers seriously for a couple reasons. Now, the Blueprint had the promise of saving money and we haven’t seen that. The healthy outcomes might be there, but the goal is, of course, to both save the money and see the healthy outcomes. So, in that experience we didn’t see the savings. And now the savings are based on what is being described as a combination of Blueprint savings and additional savings that will come from the type of reforms being done now – but we don’t think there are any Blueprint savings, which is to say that all savings at present, or at least in the near term, are going to come from the reforms that we’re going to do….”

Confusing? Welcome to the world of Act 48. And as for potential savings from Act 48, the experts aren’t predicting much.

“I’ll be straight,” said Steve Klein of the Joint Fiscal Office, “this report, even with the best case scenario is less savings than what [Dr. William] Hsiao projected…. The takeaway as I look at it is, one is this underlying growth [in healthcare costs] of 7%… The second thing is, even in the potential savings, as you say, while there is a range of potential savings… harvesting [savings] is where the rubber hits the road, and it’s going to require you people to take action…. And I have serious doubts that you’re going to be – I think you may be at the lower end of the savings.”

Ashe reflected on the politics of the situation, “I guess for me then — what it means is that the attraction of much of the work that’s being done right now — when I speak about the promise of what I hope to see out of this it’s going to be about rationalizing a system with health outcomes, but I will not be touting to constituents about savings…. We’ve gotten to a point where its embarrassing for many of us to say we supported initiatives which have now not produced proper savings.”

Sen. Randy Brock raised the question of a cost analysis of Act 48 done by Rutland City Treasurer Wendy Wilton. Wilton’s numbers not only show no savings at all under Act 48, but rather a substantial cost increase.

Klein addressed the differences between their work and Wilton’s, “Well, first of all, she’s doing something way more complete than we are. We’re just looking at potentials for savings from the baseline trend. She’s actually estimated costs of what the new healthcare plan will be, she’s estimated participants – she built a whole model. That’s nowhere near what we’ve done….”

This, of course, begs the question of why not? Wilton, working on her own in her spare time has managed to complete in a few months a “whole model,” yet the combined assets of the Joint Fiscal Office, BISHCA, and the Green Mountain Care Board can’t, and won’t until 2013.

Brock continued his line of thinking, “So, one of the places I’m really struggling with this is, as I look at potential savings how to compute savings when I don’t know what we’re going to spend.”

Klein: “Right. We don’t know what we’re spending. We don’t know what we’re building. We don’t know what the measures are going to be to capture the savings. And here we are coming up with a savings number – a range. It’s a very unsatisfying exercise.”

Brock: “What I come away with after hearing your presentation is, you don’t know what you’re going to spend, so therefore you really can’t calculate what you’re going to save, and based on what we’ve done thus far, in anticipating savings on programs, we haven’t achieved it.”

Klein: “You’re right. And this goes to the question of estimating how much does new – I mean you can take it one step further – how much is this new single payer system gonna – is it going to be feasible or not? Your taking all those estimating problems in savings and adding to it a program we don’t know, revenues we don’t know what they are, and you put it all together like Wendy did and find out it doesn’t work.”

2 thoughts on “Healthcare savings? What healthcare savings? Did we promise savings?

  1. It is very important to remember that the Blueprint Quality Care Initiative was never intended to save anyone money and was a bipartisan effort. This is one of Gov. Jim Douglas’ proudest accomplishments and it was a concrete starting point for a single payer system in VT. Why? Because it set the stage to provide the data for a false “need” under the guise of healthcare quality…which we’ve always had copious amounts of in VT.

  2. I think my head is about to explode! Any rational person (read: not a politician) would put the brakes on this “plan”. It is incredible, and very disappointing, that the Shumlin administration has been able to push this thing through and keep it in play. It was brilliant to pass a law that allows them to waste more taxpayer dollars just to come up with a plan. There is nothing in the law that says if they can’t achieve certain goals, the law is rescinded – Shumlin has only said this and there is nothing to keep him to his promise – and we all know the worth of a politician’s promise.

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