Single-Payor Healthcare in Vermont: Q&A with Tom Huebner of Vermont's Rutland Regional Medical Center

On May 26, the Vermont legislature and Gov. Peter Shumlin passed healthcare reform that had not been seen anywhere else in the country. Vermont became the first state to lay the foundation for a single-payor healthcare system that aimed to establish universal insurance coverage for all Vermonters. The single-payor option wouldn't take full effect until 2017, but there is already much speculation as to what the effects will be for citizens, hospitals, physicians, payors and all those involved with healthcare.

There have been differing views on what would result from a single-payor healthcare system. According to a recent Health Affairs study, William Hsiao, the K.T. Li professor of economics at the Harvard School of Public Health, and other researchers estimated that the single-payor system could produce an annual savings of 25.3 percent when compared with current state health spending levels, and it could create 3,800 jobs. Others, such as a study in the American Journal of Respiratory and Critical Care Medicine, have said that a single-payor system will lead to an overdose of governmental involvement.

Tom Huebner, president and CEO of Rutland (Vt.) Regional Medical Center, Vermont's second-largest hospital, shares some thoughts on the single-payor legislation, what it means to his hospital and what it means for the long haul.

Q: On May 26, the law was officially signed into law by Gov. Peter Shumlin. What were your initial thoughts?

Tom Huebner: We knew it was going to happen some months before that, so it wasn't much surprise. It went through pretty much as our governor intended with only some minor modifications. Gov. Shumlin has a Democratic legislature, and there was not a lot of opportunity to alter the legislation. The law sets up two big structures: It establishes the insurance exchange, as required under the federal law, and it establishes the Green Mountain Care board, who will oversee the state healthcare system, regulate rates and opine and rule on Certificates of Need, among other things. By 2017, the goal of the legislation is to move to a single-payor system as well as moving away from the fee-for-service approach to a global budget approach.

By 2014, in Vermont, I believe we're going to see about 30 percent of the population in the exchange. I think small employers will give up their insurance and provide some financial help to their employees to go into the exchange. The state employees will automatically be going to the exchange. A few large employers may give up their health insurance, but I don't see that happening much. They still will be able to do it cheaper themselves. Medicaid and Medicare will not be through the exchange at that point.

Q: What's next for Rutland Regional Medical Center in order to prepare for this change?

Tom HuebnerTH: First, we already a medical home program in place in Vermont. It's a statewide pilot, and we are an active participant in it. Essentially, primary care providers are incentivized with process measures to do a better job of dealing with chronically ill patients. In addition there is funding for community health teams and case management in the community. The hospital bid on and received that grant. Secondly, we've implemented electronic medical records. Third, most of the specialty physicians in town have become employed by hospitals, and we’re in the process of trying to turn them into a multi-specialty group. Primary care physicians are mostly employed through the federally qualified health centers, which we helped create five or six years ago. Those centers typically have much better reimbursement rates for Medicaid patients.

We'll look at further experimentation on payment reform, which would include capitation. We want to be dabbling in this before it gets too big and before we're too far down the road, but we don't think we're large enough to start an accountable care organization on our own.

Far more needs to be decided than has been decided by the government before we fully know how things are going to turn out.  We want to be an active participant in those upcoming discussions. We all agree the status quo is not sustainable, but we also feel strongly if a particular proposal won't work that we get to say that and describe an alternative model.

Q: What components of the law do you think will be most beneficial and most challenging over the long haul?

TH: The most beneficial component is that if the law is fully implemented, it does continue to expand insurance access, and that's a good thing in my world. But the challenges are that we may not have enough provider access. We will require a sufficient number of primary care and specialty physicians who are able and willing to participate. A lot of us are concerned that if compensation for physicians is not maintained at a level that is competitive with the rest of the country, we'll see physicians leaving our state. We have a lot of people promising us that won't happen, but that's still a worry. In general, we do need to move away from the fee-for-service model to a more nuanced set of incentives.

Q: How long do you think the learning curve will be for all things reimbursement-related?

TH: I think it's a steep learning curve. We've all known the fee-for-service system for our entire careers, except for some brief diversions toward capitation in the 1990s. The proposed changes can dramatically affect how we provide care. The real question: Will there be sufficient resources to provide the quality of healthcare that the community expects?

Thomas W. Huebner is the president and CEO of Rutland (Vt.) Regional Medical Center and Rutland Regional Health Services. Mr. Huebner joined RRMC in 1990 as vice president responsible for systems development and planning and has been president since 1997. He is a member of the American College of Health Care Executives and served as chairman of the Rutland Area Community Services and the Vermont Association of Hospitals and Health Systems. Mr. Huebner currently serves on the Blue Cross Blue Shield Board and various other civic organizations. He holds a bachelor's degree from Colby College and an MBA from Boston University with a specialty in health management.

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