A Five Year Plan to Reform Vermonts Healthcare System

1
A Five Year Plan to Reform Vermonts Healthcare
System

• Presentation to PR Leaders
• 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
• Increased 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 setting 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

• Hospital Medicaid payment freeze for FY 2006
  (Aggregate dollar savings)
• Cost of living increases for physicians and home
  health agencies.
• Restore inflation factor for nursing homes in FY
  2006.
• All providers will work through FY 2006 to
  develop financial targets and cost-containment
  strategies with reports due January 2006
• Support many of the Administrations proposals
  for Program Restraints and Modifications

16
Medicaid Reform

• Explore voluntary demonstration project on
  payment reform Medicaid DRGs, capitation,
  global budgets
• Employ health plan best practice guidelines and
  strategies
• Develop a more transparent understanding of the
  OVHA/EDS contract, including rules benchmarks
  so OVHA/EDS/Providers can more efficiently
  process claims
• Modify benefit design to reduce ER utilization

17
Medicaid Reform (continued)

• Fully fund the Program for All-Inclusive Care for
  the Elderly (PACE) in Chittenden and Rutland
  counties
• Expand care/case management for Medicaid
  beneficiaries with chronic illness
• Hire or contract with All-Medicaid physicians
  to address most acute needs (e.g. Chronic care,
  pediatrics) and locate near ER or school

18
Medicaid Reform (continued)

• Implement state-subsidized incentives for
  purchasing long-term care insurance
• Expand access to primary care services outside of
  ER settings
• Simplify the Medicaid formulary requirements and
  changes (VMS)
• Offer incentive payments to physicians willing to
  keep evening or weekend hours

19
Regulatory Reform

• Certificate of Need Improvements
• VAHHS legislation
• Form a public/private/consumer workgroup to
  address
• Billing issues
• Administrative Simplification

20
Regulatory Reform (continued)

• Budget Improvements
• Only hospitals seeking a greater than 3 rate
  increase must have review
• BISHCA would be required to focus budget reviews
  toward facilitating the highest possible bond
  ratings for that type of hospital.
• Review and evaluate the value, alignment and
  effectiveness of existing programs currently
  designed to improve system efficiency and quality
  (VAHHS bill)

21
Regulatory Reform (continued)

• Evaluate the effectiveness of the Health Resource
  Allocation Plan to
• Consider relative value against expense
• Determine other uses for HRAP
• Identify more efficient ways of collecting,
  disseminating and using HRAP data

22
System Redesign and Improvements

• Develop a strategy to evaluate the potential
  demise of all provider taxes
• Support Administrations investment of the
  Vermont Blueprint
• Develop a collaborative federal strategy on
  payment and long-term care issues

23
System Redesign (continued)

• Build on Administrations Medical Malpractice
  proposal to
• Include VMS/VAHHS bill
• Implement a full disclosure system
• Providers exempt from civil suit if they disclose
  within 48 hours of event
• Pre-determined settlement payment

24
System Investments

• QUALITY All VT hospitals will continue with
  IMPACT and are joining the IHI Campaign to save
  100,000 lives
• Use existing measures to report progress
• HEALTH INFORMATION TECHNOLOGY Accelerate
  private, state and federal development of a
  region-wide HIT strategy
• WORKFORCE Develop statewide workforce
  strategies

25
System Investments (continued)

• Identify existing measures that could tie
  economic growth as a linked priority to health
  care reform.
• Identify a five year broad-based revenue source
  through FY 2010 to close Medicaid shortfalls
  while reform efforts are implemented.
• Annual report to the Governor/legislature on
  reform progress

26
Media Strategy

• Redefine the problem. The problem is the
  delivery system rising costs are a symptom
• Legislative testimony week of 2/21
• Press interviews
• Editorial Board meetings/Op-eds
• Hospital Day 3/9
• Trustee advocacy