Governor Douglas Details Health Care Reform PlanStowe. – In a keynote address to the Vermont Chamber of Commerce September 14,Governor Jim Douglas outlined his comprehensive vision for quality,affordable health care for all Vermonters.Governor Douglas’ health insurance plan would immediately reduce premiumsby 15 percent for every Vermonter with an individual insurance plan;decrease the number of uninsured Vermonters by 20 percent in the firstyear; offer low and middle income Vermonters a premium discount of up to60 percent; and reduce, by 50 percent, the cost for a small business tostart providing insurance to employees.”Taken together, my reforms make insurance more affordable for individualsand small businesses, reduce the number of uninsured Vermonters by 20percent in the first year alone, offer an economic incentive to helpexpand the private market, and make Vermont more attractive to healthinsurance providers.” Governor Douglas said.”But we won’t stop there,” Douglas added. “I will work every year to makeprogress toward our goal of affordable and accessible health care foreveryone.”The Governor’s remarks are below.###Prescription for a Healthy Vermont: The Douglas Partnership for AffordableHealth CareSeptember 14, 2004I want to thank you for the opportunity to be here.Today, like a doctor might say after a lengthy examination, ‘I’ve got somegood news, and I’ve got some bad news.’The good news first:In Vermont, we are very fortunate to have a medical community thatprovides high quality care; and when we need them most, they are there forus.The doctors, nurses, nurse practitioners, aides, technicians, and theadministrative staffs at our hospitals and clinics are intelligent,competent, hardworking, and dedicated to providing the highest qualitypatient care possible.Complementing our primary care system is a family of community healthservices, and charity services so that no one who needs immediate care isturned away for lack of insurance.Now for the bad news: Vermont, like the nation, must confront a serioushealth care crisis.Health care costs are too high, mandates too many and options too few.For working families and their employers, insurance premiums haveskyrocketed while low cost options are being eliminated as insuranceproviders abandon Vermont’s burdensome regulatory regime.Patients are losing direct control of their care and government is failingto reimburse doctors and hospitals for the cost of treating the nearly onein five Vermonters covered by the state Medicaid program. As a result,those costs are shifted to the overwhelming majority of Vermonters who payescalating private insurance premiums.Vermont has the second most generous Medicaid program in the nation, andas a result we are headed for a $250 million deficit in the Health AccessTrust Fund by 2008. This deficit represents a serious threat to the mostvulnerable Vermonters who rely on this program and the taxpayers who fundit.The worst thing we could do is expand the program further, causing it tocrumble under the burden of its own weight. Instead, we must saveMedicaid in a responsible way while protecting the already overburdenedtaxpayer.In reforming our health care system to give every Vermonter access toaffordable insurance and care, there are no easy answers, no cure-alltonics-only tough choices.Policymakers have wrestled with this issue for decades. Anyone whosuggests that real reform is easy, can be bought on the cheap, or would bebetter administered by big government rather than doctors and health careproviders, is at best clouded by ideological fantasy and at worst peddlingpolitical snake oil.Some claim that if everyone were in the same government-run,taxpayer-financed system, we could cut down on paperwork, saving enough tocover everyone with state insurance.I don’t know about you, but one thing I know is that government isn’t theplace to look when it comes to reducing red tape.And monopolies in any service, including health care or health insurance,have never been known to have lower administrative costs, despite hopefulforecasts to the contrary.True reform must be comprehensive. We need to do more than just change thefinancing method.If costs continue to increase at the current rate, it won’t matter whatpocket the money comes from because they’ll all be empty.We need to adopt true reform that tackles the root causes of rising healthcare costs, opens our system up to low cost options, encourages healthydecisions and preventative care, and attacks health concerns at theirinception before they develop into more serious and costly ailments.And we need to maintain a patient-centered system that offers moreindividual choice and keeps health care decisions in the hands of patientsand doctors, not government bureaucrats.This is no time for more government gimmicks-we need real reform. Andthat is what I offer the people of Vermont.COMMONSENSE HEALTH CARE REFORM CRITERIANow, I know we’re in an election year… and I figure my plan will attracta fair number of critics, all with their own ideas and schemes on how tosolve the health care crisis in Vermont.Any plan that is put forth to reform healthcare in Vermont must first “dono harm.”So I want to lay out for you several commonsense criteria that anyresponsible health care plan must meet.1. A responsible health care plan must begin to lower the cost of care forinsured Vermonters who are already struggling to keep up withever-increasing insurance premiums;2. A responsible health care plan must be patient-centered and putdecisions in the hands of patients and their doctors, not politicians.3. A responsible health care plan must increase options and choices forconsumers;4. A responsible health care plan must be financially sustainable;5. A responsible health care plan must open competition among insurers touse market forces to drive down costs;A responsible plan must also be a comprehensive plan. The health carecrisis in Vermont is not solved with a single reform, a single initiative,or a silver bullet. A responsible plan must contain both short-term andlong-term reforms to bend the cost curve, as well as initiatives toimprove the quality of life for all Vermonters.STABILIZING AND REFORMING THE INSURANCE MARKETI’m here today to offer a responsible and comprehensive plan that meetsthese criteria.My health insurance plan does four things:It immediately reduces premiums by 15 percent for every Vermonter with anindividual insurance plan; it decreases the number of uninsured Vermontersby 20 percent; it offers low and middle income Vermonters a premiumdiscount of up to 60 percent; and it reduces, by 50 percent, the cost fora small business to start providing insurance to employees.Here’s how we’re going to do it:We will begin by stabilizing the volatile individual insurance market andlowering premiums for the most overburdened Vermonters.Individual Vermonters and small businesses bear a disproportionatepercentage of premium costs. As premiums in these smaller markets shootskyward and more people are forced out, premiums for all markets increaseas insurance companies seek to balance their risks.To curb this damaging cycle, I have proposed a Small Market AccessReinsurance Trust.This reinsurance mechanism has the effect of a high risk pool and willstabilize the individual insurance market, lower those premiums by 15percent, insure 1,000 more Vermonters, prevent thousands from losing theircoverage, and encourage the return of those insurance companies that havefled.The next step is to motivate small businesses to provide insurance fortheir workers.In Vermont today, businesses with fewer than 25 employees are far lesslikely to offer coverage. I will again propose a tax credit for smallbusinesses so that offering health care to their workers is an affordableoption.This tax credit proposal would cover thousands more working Vermonters andencourage small businesses to become partners in keeping their workershealthy.The plan is designed around a Health Savings Account where the employerand employee can deposit a portion of wages tax-free. Like a debit card,the worker then uses the money in the HSA for co-pays and deductibles.But participants would have the option of choosing any private plan.In January, I will also present to the Legislature a Premium DiscountProgram that will offer more than 10,000 additional Vermontersincome-sensitive assistance so they can purchase health insurance in theprivate market.For example, individuals with household income between 150 and 200 percentof the Federal Poverty Level (FPL) will receive a premium discount of 60percent off the lowest cost small group or association plan offered by theprivate market. If the individual chooses a high deductible plan-like anHSA-the program will pay 60 percent of the individual’s deductibleexpenses.Individuals and households with income between 200 and 250 percent of FPLwill receive a 40 percent premium discount, and those between 250 and 300percent of FPL will receive a 20 percent discount.Taken together, these reforms make insurance more affordable forindividuals and small businesses, reduce the number of uninsuredVermonters by 20 percent in the first year alone, offer an economicincentive to help expand the private market, and make Vermont moreattractive to private health insurance providers.But we won’t stop there-I will work every year to make progress toward ourgoal of affordable and accessible health care for everyone.LOWERING PRESCRIPTION DRUG PRICESAnother piece of the health care puzzle is the high cost of prescriptiondrugs. As part of my strategy for reducing the cost of pharmaceuticals inour Medicaid program, we formed the nation’s first multi-state buying poolfor prescription drugs.Following our lead, 6 additional states have joined and the program savedVermont $2 million last year, and is projected to save us $3 million inthe current fiscal year.We will continue to pursue our suit against the FDA for access to theCanadian prescription drug market. But we can’t stop there; Vermontersdeserve to get affordable prescription drugs from our local pharmacieshere at home.That is why I will continue to encourage consumers to pursue genericequivalents, and strongly urge Congress to change patent laws, speed theapproval of new generics and create more competition among brand namemanufacturers.Patients and physicians must also be aware of the costs associated withthe products they consume or prescribe, so we can factor price into ourhealth care decisions.That is why my administration is developing commonsense mechanisms formeaningful price disclosures.The current drug pricing system is also very cumbersome and complex. Toempower employers and insurers who rely on pharmacy benefit managers tocontain the spiraling costs of pharmaceuticals, my administration willadvance policies that offer employers pass-through pricing alternativesand the ability to audit to ensure they are receiving all rebates andsavings they deserve.And, taking this important effort one step further, in the near future Iwill announce an innovative plan to help employers afford prescriptiondrug benefits for their employees.EMPOWERING CHILDREN: THE FIT & HEALTHY KIDS INITIATIVENo comprehensive reform of Vermont’s health care system is completewithout discussing how to influence healthy choices among Vermonters.You may have heard of my Fit and Healthy Kids initiative aimed atpromoting coordinated school health programs, and teaching the value ofgood nutrition and regular exercise.Children who learn to make healthy decisions at a young age are far morelikely to avoid chronic and costly diseases as adults-it also has theadded benefit of helping them do better in school.The current budget fully supports this important initiative, includingfunding for a Fit and Healthy Kids Director, resources to expand youthactivity programs, community recreation programs, after-school activitiesand support for childhood nutrition programs.Under my proposal we will continue to empower our children with the toolsthey need to be fit and healthy throughout their lives.THE HEALTHY CHOICES DISCOUNTIn addition to nurturing children to live healthy lives, we need toencourage adults to take responsibility for their choices.I believe that Vermont law should allow Vermonters to receive healthinsurance discounts for taking individual responsibility for improving andprotecting their own health through healthy choices, such as not smoking,regular exercise, and preventive care. That is why I will submit thisproposal again to the General Assembly in January.COMBATING SUBSTANCE ABUSE: D.E.T.E.RPart of making healthy choices is making drug-free choices. Substanceabuse impacts all Vermonters – predominantly our youth – and carriesenormous long-term costs.My DETER program was the first serious effort to comprehensively combatthe growing drug problem in our state.We’ve added clinicians and case managers to meet increasing demand in ouroutpatient treatment and drug courts. We’ve placed additional studentassistance counselors in our schools.We’ve supported the prevention work of community coalitions. We’veincreased penalties for those who seek to poison Vermonters for profit.And we’ve expanded support for opiate treatment and recovery centers.Addressing this issue requires a continuous and long-term effort. There isstill much to do, and we will continue to build on the success of thisprogram.The link between my DETER program and health care costs may not beimmediately apparent. But there is no doubt that substance abuse is achronic and progressive disease that is an enormous drain on our healthcare resources.LONG TERM REFORM: THE CHRONIC CARE INITIATIVEConsider that care for people with chronic conditions like diabetes,asthma, cardiovascular disease, and arthritis account for: 76 percent ofhospital admissions; 72 percent of all physician visits; and, 78 percentof health care spending.As we know, chronic conditions increase with age-38 percent of people ages20 to 44 have one or more chronic conditions; this increases to 84 percentfor those ages 65 or over.That is why under my leadership Vermont is a national leader in addressingthe primary driver of increasing costs: the cost of providing care forpeople with chronic conditions.The current health care system evolved as a means of providing care forpeople with short-term (acute) health needs such as injuries andinfectious diseases.People with chronic illnesses do receive care through this system;however, living well with chronic conditions requires coordinated careacross health care settings. It requires putting the patient at thecenter of the care.This is a new vision for health care in Vermont.To achieve this vision, state government, insurers, business leaders,health care providers and patients are working together in a boldpublic-private partnership to achieve a system that focuses on acoordinated treatment of chronic conditions.The complete realization of this effort is nothing short of challenging-tobe sure, this is no government gimmick.Now…I know that the Chronic Care Initiative isn’t the tantalizingrhetoric of a snappy political slogan-but it is real reform, and I amconfident that this new vision for care will have an enormous impact onreducing health care costs and improving the quality of life for everyVermonter.EMPOWERING SENIORS: HEALTHY AGING AND LONG TERM CAREAs we empower Vermonters to make informed and healthy choices, we alsowant to give them a full range of options as they plan for their future.Last year, I announced an initiative to refocus the delivery of long-termcare to give elderly and disabled Vermonters the choices they desire,increase the quality of their care and reduce costs by expanding home andcommunity based long term care options.This year, I added to that initiative with a proposal to protect the nestegg of our senior citizens.Taking advantage of an anticipated Congressional action, I proposed-andthe General Assembly passed-legislation that protects low and middleincome Vermonters with private long-term care insurance from having tospend down all of their hard earned resources before becoming eligible forMedicaid.Our seniors shouldn’t have to spend their entire life savings to pay forthe high cost of care in their final years.And, within the next two weeks, we will take these efforts one stepfurther by launching a new healthy aging initiative dedicated to helpingour seniors live active, healthy lives.CONCLUSIONAs I have said, reforming our health care system is a complicatedundertaking that requires a comprehensive solution.I will be deliberate and determined as we work to address the root causesof unaffordable health care and save state programs like Dr. Dynasaur andour prescription drug plans for the most vulnerable.The details I have offered to you today are only the beginning, the firststep, in what has been-and will continue to be-a central objective of myadministration.Make no mistake: Now is the time for Vermont to take a new direction andbuild a new consensus-and I will be leading this effort.Thank you very much for inviting me to be here, and thanks especially toall of you for your commitment to Vermont.–END– read more