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Unchecked Health Care Costs Will Cost The State Billions, Gobeille Says

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Angela Evancie
/
VPR
Green Mountain Care Board Chair Al Gobeille, pictured here at the Vermont Statehouse in 2014, says that sustaining a moderate growth rate in health care expenses is critical to the state's economy.

Green Mountain Care Board chairman Al Gobeille says it's critical to control the growth of health care expenses in the coming years. If this effort is not successful, Gobeille says it will cost the state billions of dollars.

For the past few years, Vermont's spending on health care has grown roughly 3.5 percent a year. But new pressures the state's health care system could make it difficult to sustain this trend in the future.

Gobeille says maintaining the current growth rate is absolutely critical to the state's economy and the overall affordability of health care in Vermont. "If we could grow at 3.5 [percent] … we would save $10 billion over a 10 year period, versus 6 percent growth, which is what Health Affairs and other professionals in health economics are forecasting,” he says.

Gobeille says the biggest factor in sustaining a moderate growth rate is to implement a payment reform program. He says it's essential to move away from the current fee-for-service system – a system where health care professionals are reimbursed for every service they provide.

Instead, Gobeille says the Green Mountain Care Board is working on a model where payments are linked directly to the quality of care a patient receives. "If we continue to chase volume in health care, with the demographics of our state becoming more aged, we will never, never, get to a trend that we can live with,” he says.

Gobeille says the state also needs to address the so-called Medicaid cost-shift. Because Medicaid reimbursement rates cover only 60 percent of the cost of a service, the remaining costs are shifted over to private health insurance premiums. It's estimated that between 15 and 20 percent of the cost of private premiums are directly related to the cost shift.

"I would hope that while we may not close the gap in the meaningful way that the governor suggested, that we continue to work on the gap because ignoring it, it will grow greater over time as it has for the last twenty years." - Al Gobeille, chairman of the Green Mountain Care Board

Gov. Peter Shumlinproposed implementing a 0.7 percent payroll tax to boost Medicaid reimbursement rates, but many lawmakers were unwilling to impose a new tax on businesses.

Gobeille says ignoring this problem will cause health care growth rates to soar in the future. "I would hope that while we may not close the gap in the meaningful way that the governor suggested, that we continue to work on the gap, because ignoring it, it will grow greater over time as it has for the last 20 years," he says. 

Gobeille says he's optimistic that the state can begin to implement a meaningful payment reform system in the coming months.

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