The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

Vermont Leading the Way in Health Care Reform

Posted by Alan on October 30, 2007

The Assembly Health Committee is holding a hearing on Governor Arnold Schwarzenegger’s health care reform package tomorrow, October 31st (yes, on Halloween, go figure). I’ll be there testifying on behalf of the California Association of Health Underwriters and the California chapter of the National Association of Insurance and Financial Advisors. I’ve got my formal statement ready, but now I’m wondering. Perhaps I should just read an opinion piece from today’s San Francisco Chronicle by Spyros Andreopoulos, director emeritus of the Office of Communication and Public Affairs at Stanford University Medical Center. Mr. Andreopoulos makes the point that the focus of reform should be on constraining health care costs. Nothing new there.

However, Mr. Andreopoulos goes on to cite three causes of skyrocketing medical costs:

“– 75 percent of health-care spending is associated with chronically ill patients – those with predictable and long-standing medical problems, according to “Chronic Disease Overview,” published in Nov. 18, 2005 by the Centers for Disease Control and Prevention.

— Chronically ill patients only receive 56 percent of the clinically recommended preventive care, according to an article in the June 26, 2003, issues of the New England Journal of Medicine. Nearly two-thirds of the rise in health care spending is associated with rising rates of patients treated for largely chronic diseases.”

— Nearly 30 percent of the growth of health spending is associated with the doubling of obesity over the past 20 years – a chief contributor to chronic illness, according to an article in the Oct. 20, 2004 issues of Health Affairs.”

He then describes what’s required to address these cost drivers and points out how Vermont effectively addressed them in developing its health care reform plan. Notably, Vermont’s reforms were passed by a Democrat-controlled Legislature and signed into law by a Republican Governor. Apparently there’s more to the place than fall foliage, maple syrup and ice cream with weird names from two guys named Ben and Jerry. There’s a lot of common sense, too. Lawmakers there reached agreement on their reform package by first negotiating reforms aimed at tackling health care costs.Then it focused on how to assure access to care. Which makes sense. Requiring consumers to pay for health care coverage (whether through premiums or taxes) is a lot easier — and more fair — once they’re convinced the coverage will be affordable. Without that assurance the result will be what’s happening in California: competing plans focused on coverage being sniped at from every direction by every stakeholder.

As Mr. Andreopoulos puts it, California lawmakers “must take Vermont’s example and redefine the discussion to the issue of rising costs as the first priority. The focus must be how to cut costs and streamline the system, and what will the end product look like, and most important persuading Californians that health insurance will be affordable.” If he’s available, I’m more than happy to give up my time at tomorrow’s hearing for Mr. Andreopoulos to make his point to the Committee.


3 Responses to “Vermont Leading the Way in Health Care Reform”

  1. Matt said

    The CA governor is all about exercise and fitness. It’s not surprising that the first thing he tried to fix was our access to the care. More access means healthier Californians, meaning less long term health problems, which would in return mean lower premiums. MORE ACCESS with guaranteed issue must be a good thing. Not really if the care you are demanding us to get is overpriced garbage. God forbid he puts some effort into fixing the care before requiring all of us to buy it. That is my two cents. He is trying, but clearly Vermont got it right.

    Good article Alan. Really shows us how Vermont tackled this problem.

  2. Alan:

    Good luck with your appearance tomorrow. The entire industry owes you a debt of gratitude for your tireless efforts in educating CA voters on these type of subjects.

    I have been in the group insurance business in California since 1989, and it has been difficult to watch the erosion of affordable coverage affect so many people. I really thought HSA’s might play a meaningful role in impacting soaring costs, but it seems the health insurers in CA continue to overprice the qualifying High Deductible Health Plan’s so that growth in this area is relatively insignificant, especially in Southern California.

    Best of luck to you!

  3. Rick H. Silverman said

    Hi Alan!!

    Hope you are doing well.
    I read from this article at my monthly agent seminar this morning!
    Very informative.



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