Shumlin headed to Washington to negotiate all-payer model

MONTPELIER — Vermont Gov. Peter Shumlin and his top health care team will meet with federal officials next week to continue negotiations on a major transformation in how health care is paid for in the state.

Shumlin, a Democrat whose tenure in office will end in January after three terms, is seeking a transformational shift in the state’s health care system. He said at an unrelated news conference Wednesday that he and top aides will meet with U.S. Secretary of Health and Human Services Sylvia Burwell to help negotiations that have been ongoing for months.

Gov. Peter Shumlin

Gov. Peter Shumlin

“One of the things I’m really focused on is getting this done before we’re done, and I know President Obama shares my goal in doing that,” the governor said. “I’m going to be meeting with the secretary next week. We all are. We’re working very, very hard. We’re very close to an agreement and we’re holding our breath and hoping that we can get the feds to do what we need them to do to get a good deal for Vermont.”

Under the current health care system, providers are paid for each medical service they provide. That means doctors are incentivized to order more tests and procedures in order to get paid more. Under the so-called “all-payer” model Shumlin is seeking, health care providers would be paid based on health outcomes and work under a global budget that caps total payments. The system, according to proponents, would be more cost-effective and incentivize providers to perform only medically necessary procedures to achieve a positive outcome.

An all-payer model would be based on the Accountable Care Organization model — groups of doctors, hospitals and other health care providers that come together to provide coordinated care. The concept is intended to provide better information about a patient’s medical history among providers. The all-payer model would include private insurance as well as government programs like Medicaid and Medicare as payers. The state is in the process of negotiating terms and waivers available under the federal Affordable Care Act, or Obamacare, that would allow it to include those government programs.

U.S. Health and Human Services Secretary Sylvia Burwell

U.S. Health and Human Services Secretary Sylvia Burwell

“I’ve always said you can’t have a public finance system or a privately financed system like we have now with insurance premiums unless you get costs under control,” Shumlin said. “I’m incredibly optimistic that we can move to (an) outcomes-based payment system with cooperation from the federal government that will allow us to contain costs and to put money in Vermonters’ pockets.”

The administration has been working with the Green Mountain Care Board, the state’s health care regulatory body, to design a system that will meet the approval of the federal government. The plan, according to state officials, has evolved as federal officials have reviewed it. Negotiations have proven difficult and there is no guarantee a deal will be struck, the governor said Wednesday.

“In any negotiation you can bet that there’s some things that they feel very strongly about and some things that we feel very strongly about. What I can tell you is that our team, along with (Chairman) Al Gobeille and the Green Mountain Health Care Board, are encouraged by the progress that we’ve been making in negotiations over the last several months,” Shumlin said. “What Secretary Burwell’s and my goal is, is to try and hammer out the final obstacles to see whether this is doable or not. If it’s doable, let’s do it. If it’s not, let’s get it over with.”

Shumlin’s other major health care initiative, a state-level, single-payer health care system that he intended to couple with an all-payer model, was sidelined in December 2014 after it proved too costly for the state.

The administration is pushing to ensure it will receive the same — or better — federal support under an all-payer model.

“It’s all about money. Like any transformation of a health care system, the risk for us that we want to avoid is that we lock ourselves into an agreement where we would be giving up federal money that we otherwise would have had in the old system,” Shumlin said.

Vermont is furthest along in attempting to transform the health care payment system, something “no one has been able to achieve yet,” Shumlin said.

“Let’s be clear — there is no state in the country that has yet worked out a deal with the federal government where you have all payers — Medicaid, Medicare, private pay, everybody in — to a system that makes much more sense,” he said. “I’m working very, very hard to have it done before I leave office.”

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