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Vermont’s Health Care Reform Has Lessons for Other States, Author Says

State-based reforms can be tailored to individual needs (Apr. 4)

Vermont’s aggressive health care reform initiatives can serve as a roadmap for other states, according to a researcher at the University of Texas Health Science Center at Houston (UTHealth). The new report appears in the New England Journal of Medicine.

The study’s author, Laura Grubb, MD, wrote that Vermont is well ahead of most other states in implementing federal and state health care reforms.

“Vermont is progressive,” said Grubb. “They didn’t wait until each step of the Affordable Care Act had to be implemented. They voted on their own state-based reform system.”

The Patient Protection and Affordable Care Act (PPACA) mandates that states establish their own insurance exchanges or default to a federal exchange. So far, only 24 states and the District of Columbia have declared their intent to establish their own insurance exchange or a joint state–federal exchange.

Grubb proposes four main lessons for other states as they implement health care reform: 1) engage the stakeholders; 2) coordinate implementation efforts through a centralized administrative board; 3) develop state-specific insurance exchanges; and 4) capitalize on federal financing opportunities. With these lessons, Grubb says, states may realize cost savings, reduce redundancy and waste, increase residents’ satisfaction, and deliver state-specific heath care innovations.

Vermont’s establishment of a central administrative board, the Green Mountain Care Board, will result in lower costs because it works “smarter, not harder,” Grubb wrote. Instead of having numerous agencies across the state duplicating efforts, all parties are working together under one administrative body, resulting in reduced costs.

Stakeholders were engaged from the start through Vermont’s health care reform interactive Web page, town meetings, and Webinars.

Grubb noted that Vermont chose to expand Medicaid — another lesson for other states. “The Medicaid expansion will bring in a lot of federal dollars and will improve coverage of the state’s residents,” Grubb said. “Vermont expanded its program beyond the Affordable Care Act’s proposed income eligibility and is expecting to gain $259 million through their Medicaid expansion.”

Vermont’s health care reform has a long-term vision of establishing a universal health care system that is publicly funded. The state also wants to create a single-payer, state-financed system that would replace all other insurance providers — yet another idea that other states can borrow, Grubb said.

“Other states should also look into developing a state-based insurance exchange because they can tailor it to their individual needs, and they will get additional federal money to fund it,” she commented. “Private insurers spend nearly 20% of premiums on administrative costs, while physician offices and hospitals are spending money and resources on trying to deal with private and government insurers.”

While it is one of the smallest states, Vermont has been awarded $250 million in federal funding for its state exchange — the fifth-highest in the nation, according to the paper.

“At this time, the Affordable Care Act is here to stay. Policy makers need to learn and act to empower their states while implementing the required reforms,” Grubb said.

Sources: UTHealth; April 3, 2013; and NEJM; April 4, 2013.

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