Gov. Shumlin and Health Care Team Outline Details of All Payer Model
MONTPELIER - January 26, 2016 - Gov. Peter Shumlin, his senior health care advisors, and Green Mountain Care Board Chair Al Gobeille today detailed how Vermont will seek to transform its health care system under the so-called All Payer Model from one that rewards fee-for-service, quantity-driven care to one that rewards quality-based care that focuses on keeping Vermonters healthy. That transition caps off years of work that will enable Vermont to address rising health care costs that are squeezing the budgets of families, businesses, and state government.
“From Day 1, reforming the way doctors and other medical providers are paid has been a priority of my administration,” Gov. Shumlin said. “This is the only way we will curb the rising cost of health care that gobbles up money faster than Vermonters can make it. Today is the beginning of the rubber hitting the road on cost containment. Our success will mean better health outcomes for Vermonters and the end to health care costs rising faster than our economic growth.”
The fee-for-service health care model is over 50 years old and was designed to treat acute medical conditions that required a single visit. Today, treating people with chronic diseases account for 86 percent of health care costs, according to the Centers for Disease Control. The disconnect means that doctors are governed by a payment system that does not address the needs of patients, a situation that results in Vermonters receiving care that is expensive, fragmented, and disorganized.
The All Payer Model seeks to change that by enabling the three main payers of health care in Vermont - Medicaid, Medicare, and private insurance - to pay doctors and hospitals in a different way than they do today. Instead of paying for each test or procedure, doctors and hospitals will receive a set payment for each patient attributed to them, shifting the financial incentive from running tests and procedures to keeping patients healthy.
The heart of the proposal is to keep health care costs below the growth of the general economy. The terms outlined today propose a statewide health care spending target for all payers in the health care system of 3.5 percent with a maximum allowable spending growth of 4.3 percent for the next five years. The financial cap is set approximately 1 percent higher than Vermont’s economic growth as measured by gross state product over the past 15 years.
Along with spending targets will be quality ones that ensure Vermonters not only spend less but see better health outcomes. The three goals included in today's proposal are: increasing access to primary care, reducing the prevalence of and improving the management of chronic diseases, and addressing the substance abuse epidemic.
Under the All Payer Model, Vermonters will continue to see the doctor or heath care provider of their choice. Vermonters on Medicare and Medicaid will see no change to their benefits. In fact, Vermont proposes to expand Medicare benefits to seniors, including:
- Services at home for seniors in through the successful Services and Supports at Home (SASH) program by expanding the program statewide
- Addiction treatment services through the Hub and Spoke program
In addition, Vermont proposes to maintain Medicare's participation in the Blueprint for Health medical homes and community health teams, which is set to end in December 2016.
“For Vermonters, our innovation will mean not only a health care system that is more affordable but one that better meets their needs,” Gov. Shumlin said. “We will restore the family physician’s rightful place in Vermonters lives, ensuring they have someone to turn to when they get sick and a partner in keeping them healthy.”
The Administration today released a draft term sheet that sets the basic outline for how the state will implement the All Payer Model, including the legal authority of the state to enter into such an agreement, the federal waivers necessary to facilitate the transition, and a plan for data sharing and evaluation.
The state is finalizing negotiations of the terms of the All Payer Model with the federal government. Attached are general information on the All Payer Model and a draft term sheet.