A Five Year Plan to Reform Vermonts Healthcare System

1
A Five Year Plan to Reform Vermonts Healthcare
System

• February 17, 2005

2
The Immediate Problem - Medicaid

• Medicaid program in FY 2006 670 million/280
  state share
• Projected 78 million deficit in FY 2006
• Growth due to
• Increased enrollment/utilization
• Medical inflation
• Decreased federal cost-sharing (fmap 58.8)
• Relatively slower overall economic growth

3
Summary of the Administrations Plan

• Federal Global Commitment (?)
• Full implementation VT Blueprint (1M)
• Program Restraints/Modifications (29M)
• Premium increases (9M)
• Provider savings (21M)
• Premium subsidies for conversion to private plans
• Malpractice insurance reform
• GF revenues to HATF (39M)

4
Global Commitment

• Would be a 5 year fed/state agreement
• Federal Medicaid contributions would trend upward
  but at less than 13
• The GC would offer program flexibility

5
Vermont Blueprint

• Statewide effort of multiple projects to
  implement the Chronic Care Model
• Administration depends on the Blueprint to
  create sustainable financing
• Built on a public/private model
• The Blueprint investment will hopefully bend
  the curve.

6
Program Restraints and Modifications

• 29 million in proposed savings for FY 2006
• Better pharmacy management mail order, generics
• Eliminate automatic inflation factor for
  SNFs/elevate the nursing home rate setting to
  favor more acute patients
• Lengthen the time for allowed transfer of assets
• 11 M in one-time provider tax

7
Premium Increases

• Anticipated 9.13 M increase in state revenues
• Budget assumes feds will allow VT to retain 100
  of premiums collected
• Premium increases focused on Dr. Dynasaur and
  VHAP beneficiaries

8
Provider Savings

• 21 million hoped for in FY 2006
• These reductions must be made without adding to
  the insurance burden of other insured Vermonters
  through the cost-shift.
• Administration looking for all ideas global
  budgeting with PHOs, aligning payment incentives
  and redesign of the delivery system.

9
Employer Sponsored Initiative

• Newly eligible Dr. Dynasaur beneficiaries (above
  100 FPL) and VHAP beneficiaries (above 50 FPL)
  with access to ER sponsored coverage will get
  subsidies to acquire and keep private coverage.
• Savings gradually increase from 2.3M in FY 2006
  to 6.8M in FY 2008.

10
Medical Malpractice

• Mandated arbitration of medical malpractice
  disputes

11
Additional state revenues to HATF

• 19.1 M in GF for FY 2005 Budget Adjustment
• 20.0 M in GF to HATF for FY 2006

12
Draft VAHHS/Provider 5 year proposal

• Vision To create a financially sustainable
  healthcare system that delivers the right care in
  the right place to the right patients every time.
• Goals
• In five years, to provide high quality healthcare
  to Vermonts Medicaid beneficiaries within
  available state and federal resources.
• Redesign our entire healthcare system to control
  costs, decrease utilization, enhance quality and
  preserve access.

13
VAHHS Proposal Reform Principles

• Builds on voluntary cooperation and on-going
  reform efforts
• Seeks to contain costs, improve quality and
  maintain access to healthcare for all Vermonters
• Uses existing reliable financial, quality and
  demographic measures to chart our progress
• Can work in conjunction with other reform efforts
  (Blueprint/Coalition 21)

14
Key Components

• Cost-containment
• Medicaid reform
• Regulatory reform
• Delivery system re-design
• System investments

15
Cost Containment

• Rising health care costs are a symptom, not the
  real problem
• Limited real options in the short-term
• Most short-term efforts undermine long-term
  efforts to create systemic efficiencies and
  potentially greater savings
• Question of balance and targeted decisions rather
  than slash and burn tactics

16
Medicaid Reform

• Heart of VT problem
• Global commitment/hospital global budget
• ER diversion
• Align Medicaid and the VT Blueprint
• Benefit redesign
• Implement private sector insurance best-practices
  to coordinate care and insure it is provided in
  the right setting

17
Regulatory Reform

• CON changes
• Hospital budget changes
• Administrative Simplification/Billing

18
System Redesign

• Payment reform federal and state
• Long-term care insurance
• VT Blueprint for Health
• PACE

19
System Investment

• Health Information Technology
• Quality Improvement
• Workforce
• And the price tag is?????????