Leslie Matthews |
We now have a bill in the Vermont legislature that explicitly recognizes healthcare as a human right. The Senate Health and Welfare Committee today released this 'strike-all" version of S.88 (meaning that the entiretly of the text in S.88 as introduced has been striken and replaced by what appears below). As legislative council and Chair Doug Racine explained, this bill authorizes a commission to design 3 single-payer health care systems for the Vermont legislature to use in building a new health care system next legislative session. The bill states that health care is a human right and expresses as principles our healthcare is a human right principles (except participation). See Section 2, the first 5 guidelines.
This is great news. The committee room was packed today, with many people and lobbyists there to see what direction the bill would take. For once, our healthcare is a human right people outnumbered the paid lobbyists. One particular lobbist for CIGNA looked very glum after the bill was passed out.
More analysis of this bill will follow. Please email or call your Senators and tell them we see this as great progress and we want a bill embodying the human right to healthcare to pass this year.
ANY TYPOGRAPHICAL ERRORS BELOW ARE MINE, NOT THE DRAFTERS. PLEASE NOTE THAT IN SECTION 8 I WAS UNABLE TO UNDERLINE THE NEW TEXT AS IS DONE IN THE ACTUAL BILL, SO I HAVE MARKED THE BEGINNING AND END OF THE NEW LANGUAGE WITH ASTERISKS.
(Draft No. 1.3 - S.88)
3/9/2010- RJL/JGC - 1:22 PM
TO THE HONORABLE SENATE:
The Committee on Health and Welfare to which was referred Senate Bill No.
88 entitled "An act relating to health care financing and universal access to
health care in Vermont" respectfully reports that it has considered the same
and recommends that the bill be amended by striking out all after the enacting
clause and inserting in lieu thereof the following:
Sec. 1. FINDINGS
The general assembly finds that:
(1) The escalating costs of health care in the United States and in
Vermont are not sustainable.
(2) Health care costs are hurting Vermont's families, employers, local
governments, nonprofit organizations and the state budget, with serious
economic problems as the consequence.
(3) The department of banking, insurance, securities and health care
administration (BISHCA) estimates that the cost of health care in Vermont will
increase by $1 billion, from $4.9 billion to $5.9 billion, by 2012.
(4) BISHCA estimates that Vermont's per-capita health care
expenditures will be $9.463.00 in 2012, compared to $7.414.00 per capita in
(5) According to BISHCA, the average annual increase in Vermont per
capita health care expenditures from 2009 to 2012 is expected to be 6.3
percent. National per capita health care spending is proiected to grow at an
average annual rate of 4.8 percent during the same period.
(6) Again, according to BISHCA, from 2004 to 2008, Vermont
per-capita health care expenditures grew at an average annual rate of eight
percent compared to five percent for the United States.
(7) At the national level, health care expenses are estimated at 18 percent
of GDP and are estimated to rise to 34 percent by 2040.
(8) Vermont's health care system covers a larger percentage of the
population than that of most other states, but still about seven percent of
Vermonters lack health insurance coverage.
(9) According to BISHCA's estimates, in 2008, 15.4 percent of
Vermonters with private insurance were underinsured, meaning that the out-of-pocket
health insurance expenses exceeded 5 to 10 percent of a family's annual
income depending on income level or that the annual deductible for the health
insurance plan exceeded 5% of a family's annual income. Out-of-pocket
expenses do not include the cost of insurance premiums. All Vermonters are a
job loss away from being uninsured.
(10) Vermont's health care reform efforts to date, including
Dr. Dynasaur, VHAP, Catamount, the Blueprint for Health, health information
technology, and the department of health's wellness and prevention initiatives
have been beneficial to thousands of Vermonters, and hold promise for helping
to provide access and to control costs in the future.
(11) Testimony received by the senate committee on health and welfare
and the house committee on health care makes it clear that the current best
efforts described in subdivision (10) of this section will neither provide
insurance coverage for all Vermonters nor significantly reduce the escalation
of health care costs.
(12) The Administration's budget proposal for fiscal year 2011
increases deductibles for Catamount Health and proposes reductions in benefits
for Vermont's Medicaid population, showing once again that Vermont tax
revenues cannot keep pace with rising health care costs, with the consequence
being less health care for Vermont's lower income population.
(13) As of today, there is little reason for optimism that Congress will be
able to enact any meaningful health care reform legislation.
(14) It is clear that only structural reform will provide all Vermonters
with access to affordable, high quality health care.
(15) As this state has done before in so many areas of public policy,
Vermont must chart its own path on health care reform.
* * * HEALTH CARE SYSTEM DESIGN * * *
Sec. 2. PRINCIPLES FOR HEALTH CARE REFORM
The general assembly adopts the following guidelines as a framework for
reforming health care in Vermont:
(1) Every person is entitled to comprehensive, quality health care.
(2) Systemic barriers must not prevent people from accessing necessary
(3) The cost of financing the health care system must be shared
(4) The health care system must be transparent in design, efficient in
operation, and accountable to the people it serves.
(5) As a human right, the health care system that satisfies these
principles is the responsibility of the government to ensure.
(6) The health care infrastructure, including hospitals, primary care, and
other services, must be preserved so that Vermonters continue to have care
available to them within their own communities.
(7) A system for eliminating unnecessary expenditures and containing
costs must be implemented so that health care spending does not bankrupt the
(8) The financing of health care in Vermont must be sufficient,
equitable, fair, and sustainable, and such financing may be best obtained when
broad-based taxes, including payroll taxes, replace insurance premiums.
(9) Universal access to health care is a public good, and therefore it is
the policy of the state of Vermont to ensure universal access to and coverage
for essential health care services for all Vermonters.
(10) Vermont's health delivery system must model continuous
improvement of health care quality and safety and, therefore, the system must
be accountable in access, cost, quality, and reliability.
Sec. 3. GOALS OF HEALTH CARE REFORM
Consistent with the adopted principles for reforming health care in
Vermont, the general assembly adopts the following goals:
(1) Vermont's nonprofit community hospital system will be preserved
through a system of negotiated payments that are drawn from public revenues
and which are based on annual global budgets.
(2) Vermont's primary care providers will be adequately compensated
from public revenues through a uniform payment system that eliminates
multiple insurers and reduces administrative burdens on providers.
(3) Health care in Vermont will be organized and delivered in a
patient-centered manner through community-based systems that:
(A) are coordinated with each other:
(B) focus on meeting community health needs:
(C) match service capacity to communitv needs;
(D) coordinate and integrate healtn care
(E) provide information on costs. quality. outcomes. and patient
(F) use financial incentives and organizational structure to achieve
specific obiectives; and
(G) improve continuously the quality of care provided.
(4) To ensure financial sustainability of Vermont's health care system.
the state is committed to slowing the rate of growth of health care costs.
(5) Health care costs will be controlled by using a combination of the
(A) the simplification of reimbursement mechanisms throughout the
health care system;
(B) paying hospitals on the basis of annually negotiated global
(C) the reduction of administrative costs associated with private
insurance and bill collection;
(D) the collective purchase of pharmaceuticals and other supplies
through the establishment of a state drug formulary;
(E) the alignment of health care professional reimbursement with
best practices and outcomes rather than utilization;
(F) efficient health facility planning. particularly with respect to
(G) reductions in the prevalence of defensive medicine along with the
prudent and efficient utilization of medical technology;
(H) increasing the availability of primarv care services throughout
(I) removing competitive pressure between hospitals and other
(J) reforming the medical malpractice system in Vermont.
(6) All Vermont residents, subiect to reasonable residency requirements,
will be covered under a publicly sponsored benefits package, regardless of
their age, employment, economic status, or their town of residency, even if
they require health care while outside Vermont.
(7) All essential health services will be covered under the publicly
sponsored benefits package. A process will be developed to define essential
health services, taking into consideration scientific evidence, available funds,
and the values and priorities of Vermonters. Coverage will follow the
individual from birth to death and be responsive and seamless through
employment and life changes.
(8) Health care reform should ensure that Vermonters' health outcomes
and key indicators of public health will show continuous improvement across
all segments of the population.
(9) Health care reform should reduce the number of adverse events from
(10) Disease and iniury prevention, health promotion, and health
protection will be incorporated into a publicly sponsored health care system.
Sec. 4. VERMONT HEALTH CARE BOARD
(a) Definitions. As used in this section:
(1) "Health care professional" means an individual, partnership,
corporation, facility, or institution licensed or certified or authorized by law to
provide professional health care services.
(2) "Health service" means any medically necessary treatment or
procedure to maintain, diagnose, or treat an individual's physical or mental
condition, including services provided pursuant to a physician's order and
services to assist in activities of daily living.
(3) "Hospital" shall have the same meaning as in 18 V.S.A. Section 1902 and
may include a hospital located outside Vermont.
(4) "Hospital service" means any health service received in a hospital
and any associated costs for professional services.
(5) "Preventive care" means screening, counseling, treatment, or
medication determined by scientific evidence to be effective in preventing or
(6) "Primary care" means health services provided by health care
professionals specifically trained for and skilled in first-contact and continuing
care for individuals with signs, symptoms, or health concerns, not limited by
problem origin, organ system, or diagnosis. Primary care services include
health promotion, preventive care, health maintenance, counseling, patient
education, case management, and the diagnosis and treatment of acute and
chronic illnesses in a variety of health care settings.
(7) "Vermont resident" means an individual domiciled in Vermont as
evidenced by an intent to maintain a principal dwelling place in Vermont
indefinitely and to return to Vermont if temporarily absent, coupled with an act
or acts consistent with that intent. The health care board shall establish
specific criteria to demonstrate residency.
(b) Vermont health care board.
(1) On Julv L 2010, the Vermont health care board is created and shall
have the powers and duties established by this section. The board shall consist
of one member appointed by the governor, one member appointed bv the
speaker of the house, and one member appointed by the senate committee on
(2) A person in the employ of or holding any official relation to any
health care provider or insurer, or engaged in the management of a health care
provider or insurer, or owning stock, bonds, or other securities thereof, or who
is, in any manner, connected with the operation of a health care provider or
insurer shall not be a member of the board. In addition, no board member shall
render professional health care services or make or perform any business
contract with any health care provider or insurer if such service or contract
relates to the business of the health care provider or insurer, except contracts
made as an individual or family in the regular course of obtaining health care
(3) The board may hire staff to provide administrative or analytic
services to the board and may hire outside consultants to provide expertise
necessary to do the analysis and design required by this act.
(4) The board shall cease to exist on June 30, 2011.
(c) The Vermont health care board is authorized to seek matching funds to
assist with carrying out the purposes of this act. In addition, it may accept any
and all donations, gifts, and grants of money, equipment, supplies, materials,
and services from the federal or any local government, or any agency thereof
and from any person, firm, or corporation for any of its purposes and functions
under this act and may receive and use the same subiect to the terms,
conditions, and regulations governing such donations, gifts, and grants.
Sec. 5. HEALTH CARE SYSTEM DESIGN
(a) By January 1. 2011, the Vermont health care board shall propose to the
general assembly three design options for creating a single system of health
care to provide essential health services to all Vermonters with financing based
on the ability to pay consistent with the principles and goals outlined in Secs. 2
and 3 of this act. The system will include a choice of services and of health
care professionals, reduce and contain costs, and improve the quality of care
and health outcomes. The purpose of the system design proposals is to ensure
that individual programs and initiatives can be placed into a larger, more
rational design for the delivery and financing of health care in Vermont. Each
design option shall include sufficient detail to allow the general assemblv to
adopt one design during the 2011 legislative session and to achieve
implementation of the new system no later than July 1, 2012.
(b) Each of the three design options shall include the following components
as further described in Sec. 6 of this act:
(1) general administration of service;:
(2) health services benefit. including cost-sharing;
(3) coordinated local delivery system. including prevention;
(4) health system planning and public health;
(5) budget approval;
(6) payment methods. including global budgets;
(7) process for payment amounts;
(9) Medicaid and Medicare waiver proposals;
(10) a method to comply with the Employee Retirement Income
Security Act (ERISA), as well as an advocacy strategy to seek an ERISA
exemption from Congress; and
(11)redesign of state agencies administering or regulating health care,
health care professionals and providers, and other health-related services.
(c) The Vermont health care board shall include in the proposal an analysis
of each design option as compared to the current state of health care in
Vermont, including the costs of providing health care to the uninsured and
underinsured in Vermont, potential savings from creating a single system of
health care, and the pros and cons. The board shall recommend one of the
three design options based on this analysis and the principles and goals
outlined in Secs. 2 and 3 of this act.
Sec. 6. HEALTH CARE SYSTEM DESIGN COMPONENTS
In creating the three design options, the Vermont health board shall
consider the following components for each option:
(1) General administration of services. The board shall make a
recommendation, where appropriate to the design option, on:
(A) whether a government financed health benefits plan should be
administered by a government agency or under an open bidding process, which
would solicit and receive bids from insurance carriers or third-party
administrators for administration.
(B) an enrollment process.
(C) the application of the standards and procedures in the pharmacy
best practices and cost control program established by 33 V.S.A. &§ 1996 and
1998 to the plan, and consideration of a single statewide preferred drug list
designed to promote evidence-based prescribing, clinical efficacy, and
(D) an appeals process for individuals receiving coverage under the
new health benefits plan.
(2) Health services benefit.
(A) Covered services. Each of the design options shall include
coverage for primary care, preventive care, chronic care, acute episodic
care, and hospital services.
(B) Cost-sharing. Each of the design options shall provide for
affordable, income-sensitive cost-sharing.
(3) Coordinated, local delivery systems.
(A) The design options shall ensure that the delivery of health care in
Vermont is coordinated in order to provide services to the citizens of
Vermont and to improve health outcomes. The design options shall consider
and include building on the delivery system initiatives that are part of
the Blueprint for Health, such as the medical home pilot projects.
(B) The Vermont health care board shall consider the following options for the
organization of health care delivery and shall include in each
design option a recommendation on the improvement of health care delivery
that is consistent with that option's administrative system:
(i) a community health board in each region of the state to solicit
public input; conduct a community needs assessment for incorporation
into the health resources allocation plan; plan for community health
needs based on the community needs assessment; develop budget
recommendations and resource allocations for the region; provide
oversight and evaluation regarding the delivery of care in its region;
and other functions determined to be necessary in managing of the
region's health care delivery system or furthering cost-containment.
(ii)a regional entity organized by health care professionals and
providers to coordinate health services for that region's population,
including developing payment methodologies and budgeting, incentive
payments, and other functions determined to be necessary in managing
the region's health care delivery system or furthering cost- containment.
(4) Health system planning and public health. The Vermont health care
board shall consider and include in the design options building on the existing
system of health system planning and public health, including the health
resource allocation plan, the certificate of need process, the Blueprint for
Health, the statewide health information exchange, and other public health
(5) Budget approval. The Vermont health care board shall include in
each option a recommended process to develop a budget for the health care
system or part of the health care system as appropriate to that option. The
budget development may include the consideration of payment methodologies
and amounts, cost-containment mechanisms, a cost-containment target for each
health care sector to be considered when negotiating or determining payment
amounts, regional recommendations or budgets, anticipated revenues available
to support the expenditures, and other considerations appropriate to the design
of that option.
(6) Pavment methods.
(A) The Vermont health care board shall include a recommendation
for the payment methods to be used for each health care sector which
provides health services under each design option. The payment methods
shall be aligned with the goals of this act and shall encourage cost-
containment, provision of high quality, evidence-based health services in a
coordinated setting, patient self-management, and healthy lifestyles.
(B) The board shall consider the following pavment methods:
(i) periodic payments based on approved annual global budgets;
(ii) capitated paymems~
(iii) incentive payments to health care professionals based on
performance standards, which may include evidence-based standard
physiological measures, or if the health condition cannot be measured
in that manner, a process measure, such as the appropriate frequency
of testing or appropriate prescribing of medications;
(iv) fee supplements if necessary to encourage specialized health
care professionals to offer a specific, necessary health service which
is not available in a specific geographic region;
(v) diagnostic-related groups;
(vi) global budgets, as described in subdivision (C) of this
subdivision (5); and
(vi) fee for service.
(C) Global budgets.
(i)The Vermont health care board may recommend a process for
establishing a global budget for each hospital. health care provider, or
other entity located in Vermont beginning with hospital fiscal year 2013,
October 1, 2012. The recommendation shall include the entities with which
a global budget should be used as a payment mechanism.
(ii) The board shall include a recommendation on how to align the
global budget process with the health resource allocation plan under
18 V.S.A. § 9405; the unified health care budget under 18 V.S.A.
§ 9406: the hospital budget review process under 18 V.S.A. § 9456, and
the proposed global payments, if applicable and recommended in a
design option. The board shall recommend any legislative changes
necessary to ensure that existing regulatory processes, including the
hospital budget reviews and certificates of need, are consistent with
the global budget developed.
(iii) The board shall also recommend a method of establishing a
global budget and shall consider whether the budget should be
population based, include line items, provide a mixture of a lump sum
payment, diagnosis-related group (DRG) payments, and incentive
payments for participation in the Blueprint for Health, quality
improvements, or other health care reform initiatives as defined in
3 V.S.A. § 2222a.
(iv) The purpose of the global budget is to serve as a spending cap
within which costs are controlled, resources directed, and quality and
access assured. The board may recommend that the global budget limit
the total annual growth of costs. The board shall recommend
circumstances under which an entity may seek amendment of its budget
(7) Process for determining payment amounts.
(A) The Vermont health care board shall recommend a process for
determining payment amounts with the intent to ensure reasonable payments to
health care professionals and proyiders and to eliminate the shift of costs
between the payers of health services by ensuring that the amount paid to
health care professionals and providers is sufficient. Payment amounts
should provide reasonable access to health services, provide sufficient
uniform payment to health care professionals. and encourage the financial
stability of health care professionals.
(B) The Vermont health care board shall consider the following options for
determining a payment amount and make recommendations for the
appropriate process for each of the design options:
(i) Negotiations with hospitals, health care professionals, and
groups of health care professionals:
(ii) Establishing a global payment for health services provided by
a particular hospital, health care provider, or group of professionals
and providers. In recommending a process for determining a global
payment, the board shall consider the interaction with a global budget
and other information necessary to the determination of the appropriate
payment, including all revenue received from other sources. The
recommendation may include that the global payment be reflected as a
specific line item in the annual budget.
(iii) Negotiating a contract including payment methods and amounts with any
out-of-state hospital or other health care provider that regularly
treats a sufficient volume of Vermont residents, including contracting
with out-of-state hospitals or health care providers for the provision
of specialized health services that are not available locally to
(iv) Paying the amount charged for a medically necessary health
service for which the individual received a referral or for an
emergency health service customarily covered and received in an out-of-
state hospital with which there is not an established contract;
(v) Developing a reference pricing svstem for nonemergency health services
usually covered which are received in an out-of-state hospital
or by a health care provider with which there is not a contract.
(C) To facilitate negotiation of payment amounts, the board may
recommend the creation of one or more health care professional bargaining
groups, consisting of health care professionals who choose to participate and
may propose the adoption by rule of criteria for forming and approving
bargaining groups, and criteria and procedures for negotiations authorized by
this section. In authorizing the activities provided for in this section,
the intent of the general assembly is to displace state and federal
antitrust laws by granting state action immunity for actions that might
otherwise be considered to be in violation of state or federal antitrust
(8) Financing. The board shall include an estimate of any additional
costs for providing coverage to the uninsured and underinsured. any estimated
savings from streamlining the administration of the health care sector into a
single system, and financing proposals for raising sustainable revenue
necessary for funding the system.
(9) Medicaid and Medicare waiver proposals. The board shall propose
how to redesign the Global Commitment to Health Medicaid Section 1115 and
the Choices for Care Long-Term Care waiver to be consistent with each design
option in order to maximize federal participation and funding in the single
health care system. The board shall also include a proposal for a Medicare
waiver where appropriate.
(10) Employee Retirement Income Security Act (ERISA). The board
shall propose an advocacy strategy to seek an ERISA exemption from
Congress if necessary for one of the design options. In addition, assuming the
absence of an ERISA exemption, the board shall consider how to design each
option in compliance with ERISA.
(11) Redesign of state agencies. The board shall propose redesigning
the structure of state agencies administering or regulating health care, health
care professionals, health care providers, or health insurers, or involved in
other health-related services, such as public health or health resource planning.
The purpose of the redesign shall be to ensure the appropriate and efficient
operation of state government and to create a single locus of responsibility for
the health care system and for health care reform.
* * * IMMEDIATE COST-CONTAINMENT PROVISIONS * * *
(PROPOSED LANGUAGE FROM BISHCA)
Sec. 7. HOSPITAL BUDGETS
(a) In addition to the goals identified in Sec. 50 of No. 61 of the Acts of
2009 and pursuant to 18 V.S.A. § 9456. the commissioner of banking.
insurance. securities. and health care administration shall target hospital
budgets for fiscal years 2011 and 2012 consistent with the following:
(1) the total systemwide rate increase for all hospitals reviewed by the
commissioner shall not exceed 4.0 percent:
(2) the total systemwide net patient revenue increase for all hospitals
shall not exceed 4.5 percent;
(3) the total systemwide hospital operating margins shall not exceed
those allowed in fiscal year 2010;
(4) the commissioner may select specific hospital budget expenditures,
such as new programs, that shall be restricted or disallowed, consistent with
the goals of lowering overall health care cost increases without compromising
health care quality;
(5) hospital revenue and expenses associated with health care reform
may be exempt from the limits in subdivisions (1)-(3) of this subsection.
provided that such expenditures are specifically reported, supported with
sufficient documentation as required by the commissioner, and approved by
the commissioner; and
(6) a limited amount of hospital expenses associated with increases in
the provider tax may be exempt from the limits in subdivisions (1)-(3) of
this subsection in a manner to be determined by the commissioner.
(b) Notwithstanding 18 V.S.A. Sec. 9456(e), permitting the commissioner to
waive a hospital from the budget review process, consistent with this section
and the overarching goal of containing health care and hospital costs, the
commissioner may waive a hospital from the hospital budget process for more
than two years consecutively. This provision does not apply to a tertiary
(c) Upon a showing that a hospital's financial health or solvency will be
severely compromised, the commissioner may approve or amend a hospital
budget in a manner inconsistent with subsection (a) of this section.
Sec. 8. 18 V.S.A. § 9456(h)(1) is amended to read:
(h)(1) If a hospital violates a provision of this section, the commissioner
may maintain an action in the superior court of the county in which the
hospital is located to enjoin, restrain or prevent such violation. **In addition, ifthe commissioner finds that a hospital is operating outside of the budget
approved by the commissioner, after notice and an opportunity to be heard, the
commissioner may impose iniunctive or administrative remedies to ensure that
the hospital operates within its budget as approved, including amending the
hospital budget order.** [Editor's note: The proposed new language for this section is between the double asterisks. I could not underline, as is done in the actual bill. CSE]
* * *APPROPRIATION AND EFFECTIVE DATE * * *
Sec. 9. APPROPRIATIONS
(a) The amount of $X is appropriated from the general fund to the Vermont
health care board in fiscal year 2011 for the health care board established in
Sec. 4 of this act.
(b) The amount of $X is appropriated from the general fund to the Vermont
health care board in fiscal year 2011 to hire one or more outside consultants
pursuant to Sec. 4 of this act.
Sec. 10. EFFECTIVE DATE
This act shall take effect upon passage.