Vermont trying all-payer healthcare system to curb costs, improve care

  Vermont's state seal, in a stained-glass window in the State House, in Montpelier.

Vermont's state seal, in a stained-glass window in the State House, in Montpelier.

Governing magazine has looked at Vermont’s development of  an all-payer healthcare system.

In this approach, the publication says,  ”{i}nstead of billing doctors for each service they provide, insurers in Vermont will now give them a fixed sum each month, along with bonuses for keeping patients healthy. (Doctors can also pay penalties for adverse health effects, like having a high number of patients getting readmitted to the hospital within 30 days.) The hope is to eliminate unnecessary procedures, reduce costs and elicit more positive health outcomes.”

“In the 1970s, a dozen or so states tried all-payer systems for their hospitals. Except for Maryland, they all eventually shifted back to the standard fee-for-service because there was little evidence that all-payer was actually reducing overall health-care spending.”

“All of those states, however, only applied all-payer to hospitals — leaving out a large portion of health-care providers and limiting its potential impact.”

“Vermont’s system will cover all providers — hospitals, primary care, specialists, urgent care clinics, you name it. And instead of the state paying the providers their monthly fixed sum, it will be up to accountable care organizations (ACOs), which are groups of providers that have the same goals as all-payer: to reduce spending by rewarding better, not more, care.”

But there will be big challenges to making this work.

To read the Governing piece, 

This item first ran in the Web site of Cambridge Management Group (cmg625.com).