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IGNORING IMPORTANT NEWS



IGNORING IMPORTANT NEWS - By CORNELIUS HOGAN, DEBORAH RICHTER, M.D., And TERRY DORAN - April 25, 2007

Several weeks ago an important report commissioned by the Vermont's Health Care Commission was quietly posted on the Legislative Council Web site. No fanfare, no press conferences, no attention given. Media ignored it. The committee that ordered it ignored it. The Legislature ignored it. The administration ignored it. The report's findings tumbled into the political abyss.

And yet the report contains a message that affects every one of us. What it says ought to be engraved in the thinking of every legislator and every administration member. We can hope the powers that be take it to heart. They ought to. They paid for it.

The subject of the report is health care reform. More precisely it is about financing health care. It says that unless we find a way to control and manage the overall costs of health care, there is no way we can keep paying for it at the current rate of increase.

You could say we already knew that. The same point has been made many times before. But not in this same way. The report brings science, logic and analysis to the subject. It drives the point home in a fair-minded way.

The report by Kavet, Rockler & Associates is called Health Care Financing Analysis. Tom Kavet is a Vermonter, and Nic Rockler is from the Boston area. They are economists. Last year's Legislature ordered (in Act 71) a review of the economic implications associated with a range of health care reforms that might arise now or later.

All health care reforms have to be paid for, so Kavet and Rockler looked at the ways that it might be done: income taxes, payroll taxes, and consumption taxes (the current Catamount reform leans heavily on cigarette taxes).

Here is a money quote from the report:

"Without a significant change in the way health care costs are managed, the growth in health care spending has and is likely to continue to exceed past and projected growth rates from any major tax revenue source. As a result, without policy intervention to control costs, tax rates would need to be frequently raised or new tax sources tapped in order to meet likely future expenditure growth."

Here is another:

"Unless such cost control can be achieved, no available revenue source will be able to keep pace with the projected growth in (health care) program expenditures."

The report also makes the commonsense suggestion that a consensus on policy must form a basis from which to tackle this problem in a meaningful way. So far the Douglas administration and the Legislature have fallen short of any consensus that blends policy with practical measures that would address the now and future problem of financing health care in Vermont.

An example of an unmeaningful approach is last year's premature declaration of victory by some legislators and the administration over the Catamount plan. Catamount has already raised the overall costs of health care, and any promises of savings will be offset by future cost increases. Catamount deserves one cheer for intent (more insurance for some of the people who have none), but its role in cost-control policy is next to nil.

The Kavet-Rockler report ordered by the Legislature, and apparently dust-binned by it, carries a very disturbing "inconvenient truth." That is that overall costs, not more insurance coverage or retuned delivery systems, are the problem. According to Kavet-Rockler, it is a problem that we can count on outpacing any of our reform efforts unless they target a "significant change in the way health care costs are managed."

They point out that what goes for Vermont goes for the nation. The United States pays a lot more for health care than other nations, without better results, which the report says suggests "that expenditure cost control could be achieved without necessarily sacrificing the quality of health care services provided."

The Kavet-Rockler report is the first product commissioned by our Legislature that makes the case that controlling the rising cost of health care needs to be at the center of Vermont's health care policy initiative.

Cornelius Hogan, Deborah Richter, M.D., and Terry Doran are authors of "At the Crossroads: The Future of Health Care in Vermont."

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