Vermont Aims to Pioneer Health-Care-Reform Plan

After long fight, state readies to consider two very different systems

THE seeds of comprehensive health-care reform have already been sown in Vermont's rolling green hills. Now some national experts hope that Vermont can serve as a laboratory for the federal government as it grapples with reforming the nation's fragmented and inefficient system.

``Health care is about to take its rightful place next to food, shelter, and clothing,'' said Vermont House Speaker Ralph Wright (D), predicting that the final passage of a comprehensive reform bill this year.

But others are less sanguine about the prospects for reform. They point to Vermont's weak economy and the unresolved political battle over how to achieve universal access by the 1995 target date. To them, the state's experience may hold a sobering lesson for the federal government.

Vermont has already approved many reforms advocated by President Clinton. Last year, it approved a bill that creates set budgets for hospitals and a standardized insurance form to cut administrative costs. It has also outlawed the practice known as ``cherry-picking,'' in which insurance firms try to avoid covering people who need medical care.

Those preliminary reforms are a product of years of heated debate over how best to rein in the spiraling health-care costs that threatened to bankrupt the small state's budget.

In 1993, Vermont's half a million people will spend an estimated $1.6 billion on health care. If the current rate of growth continues, that's expected to more than double by the year 2000.

The state legislature has wrangled over a series of proposed reforms, from tinkering with the regulations that control the private insurance industry, to scrapping it all together. The debate has often been heated and unproductive.

Last year, frustration reached a peak when a bill mandating universal access got bogged down in committee.

``They were battling it out in the Senate,'' says Bridget Barry, a journalist who covers Vermont health care. ``The bill was getting dissected bit by bit. There was a danger there was going to be no health-care reform at all.''

As the close of the session neared, a compromise was crafted. First, the legislature approved a series of simpler reforms, like guaranteeing access to insurance. Then it took the controversial development of a final plan out of the political process. The compromise created The Vermont Health Care Authority and charged it with designing two plans to create universal access: a single-payer insurance system financed by an income and business tax, and a multipayer system paid for by insurance premiums and employer-mandated coverage.

Last year, the authority collected data, crafted proposals, and held public hearings. As it worked, it became a political lightning rod, attracting ire from all sides of the debate.

``Paradoxically, I think all the criticisms we've engendered have significantly increased the ability of the General Assembly to deal with the issue,'' said Paul Harrington, a board member at the Health Care Authority. But even as the authority prepares to present its final proposals to the legislature Nov. 1, dissatisfied parties on both sides of the debate are busily drafting their own legislation.

Advocates of the single-payer system will submit what they call a ``more pure'' Canadian-style plan, while conservatives will introduce a bill that simply requires all Vermonters to buy health insurance.

The cost of providing universal access has also raised concerns. The authority estimates that implementing it will add $80 million to Vermont's 1994 health-care bill.

``They're going to present a multipayer system that will require a lot more money, and the legislature is going to balk at it,'' says John Franco, an advocate of the single-payer system and a member of the Vermont Consumers' Campaign for Health.

But Gov. Howard Dean, a doctor who has also taken a leading role in the national health-care debate, says the state must develop a way to pay for reform.

``There are lots of ways to do health-care reform,'' the Democratic governor says. ``I think it's a mistake to put it off because you don't have any money.''

As the political debate gets under way once again in the legislature, many of the proposed reforms have also begun to develop despite the political deadlock.

The state's largest teachers' union, the Vermont National Education Association (NEA), has teamed up with its traditional foe, the State School Board's Insurance Trust. Together, they've created a $45-million purchasing pool that functions very much like the health alliances proposed by Mr. Clinton.

The state's largest hospital and a private doctors' practice have joined forces to create the kind of provider network that's at the heart of both the Clinton and the Vermont Health Care Authority's reform proposals.

Many players in the debate have also toned down their rhetoric and signaled flexibility.

``I think the catch phrases of the last year and a half really divert attention from what we should focus on, which is the heart and substance of the reform,'' says Joe Blanchette, director of benefit programs of the Vermont NEA. ``We're not interested in who's right or who's wrong, we just want good reform.''

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