by Hamilton E. Davis
Vermont’s health care reform initiative is now in its eighth year and it is actually doing amazingly well, given the godawful difficulty of the central task—getting health care costs under control. Annual inflation rates in the Vermont hospital system are half those in the rest of the country. Every once in a while, however, some brush fire blows up that illuminates the adverse political pressures that reform has to overcome. The recent brouhaha about insurance rates for the Obamacare Exchange is one of those.
Every year Vermont Blue Cross and MVP, a New York-based insurance carrier, ask the Green Mountain Care Board to approve increases in the rates each charges for insurance purchased from the Exchange; the federal government subsidizes this system, but, especially at higher incomes, the policies can be very expensive.
The proceedings take place in a rigidly legal format; they are a courtroom trial, governed by state law and the rules of evidence. And the Green Mountain Care Board has to walk a very narrow line in the process: on the one hand, the Board has to get premiums for consumers as low as possible, given the costs generated by the medical delivery system; on the other, the Board has to ensure that the carriers rates are sufficient to keep them solvent, a requirement enforceable by the Vermont Supreme Court. A bankrupt insurance company could leave tens of thousands of Vermonters with no coverage.
A major cog in this government machinery is the Health Care Advocate, whose assignment is to press the Green Mountain Care Board to ease these the very considerable burdens on the 80,000 or so Vermonters who get coverage on the Exchange. In the past, Mike Fisher, the Advocate, has hired an actuary to joust with the actuaries for the Board and for the carriers over what the rates should be.
This year, Fisher took a different tack. He petitioned the Board to allow him to testify as an “expert witness” on the issue of whether the policies sold on the Exchange were affordable. The Board denied the petition on the grounds Fisher didn’t fit the legal definition of an expert witness. Of course, he could carry out his normal functions as a party to the proceedings. He could ask questions of witnesses, and he could put on his own witnesses, either an actuary—or a real health policy “expert.” Moreover, he could testify himself on “facts” that he wanted the Board consider; he just couldn’t be labelled an “expert witness.”
The cascade of errors began about 10 days ago when VTdigger reported that Fisher would not be allowed to participate in the hearings all. “Consumer Advocate Barred from Insurance Rate Hearing; State Won’t Say Why”, the headline read.
Pandemonium ensued. Former Governor Howard Dean tweeted his outrage: “The Green Mountain Care Board has never been effective,” he wrote. “The people who serve on it are good people but this action makes them look like they are in the pocket of the insurance companies. GMCB should be disbanded.”
Sen. Michael Sirotkin, the Chittenden County Democrat, weighs in on Front Porch Forum, taking credit for passing the law establishing the Health Care Advocate and urging the Front Porchers to comment on the affordability issue to the Board. Tim Ashe, a Democrat/Progressive and the President pro tem of the Senate went the tweet route:
“Totally tone deaf of the state’s two health insurers to try to block the consumer advocate from, well, representing consumers when they are proposing big price increases for insurance. The regulators should toss the request in the wastebasket.”
Tom Pelham, the newest member of the Board, told the press he didn’t see any harm in Fisher testifying about affordability, thereby undercutting his own Board’s decision. And Jon Margolis, Digger’s political columnist suggested the Board was a “lapdog” for the insurance companies, in a way that that appears to make the Board and the carriers “arrogant, blasé, about adding to the financial woes of their customers, and hostile to democracy.”
Wow, that sounds like a very big deal…Actually, it isn’t. The insurance company rates are important, but the Health Care Advocate will have no impact on them at all. That isn’t the advocates' fault: Mike Fisher wants the Board to understand that the cost of health care is not affordable, which it obviously isn’t. But every sentient being who hasn’t had his or her head under water for the last 20 or 30 years knows they aren’t affordable—that’s why the health care reform effort, and, indeed the Board, exists. The problem isn’t knowing health care costs are too high, the problem is what to do about it. And paroxysms of stupidity don’t help in that regard at all. Let’s count the ways:
In the first place, the first VTdigger story was wrong—the health care advocate wasn’t being barred from the hearing by the Green Mountain Care Board. They couldn’t do that if they wanted to—which they didn’t. Under state law, the Advocate is a party to issues like insurance rates. Fisher not only gets to go to the hearings, he gets a privileged seat there. He can question the various witnesses, and he can put on his own witnesses in support of any argument he might want to make. What he did get barred from doing was acting as his own “expert witness” on the question of affordability. The reason is that he doesn’t begin to qualify as such as witness under the law. Fisher cited his service as vice chair of a Vermont House health care committee, but that proposition is simply laughable. An academic health care economist sociologist could probably qualify. Fisher doesn’t. In fact, Fisher talked earlier in the year about putting on just such a witness, and obviously changed his mind. He spent his money on an out of town lawyer who would question him (Fisher) on his views about affordability.
And in fact, the Health Care Advocate got his arguments before the Board, with no real problem. In the Blue Cross hearing, Jay Angoff, Fisher’s Washington lawyer, went after Blue Cross hard, eliciting a concession from a Blues witness that the Blues couldn’t even define “affordability”. Angoff easily made his point that the Blues products on the Exchange are not affordable in any real world sense. As in an ordinary person would have huge difficulty paying for them. It would have been a signal accomplishment if the Board didn’t already understand the point as well as, or possibly much better, than Angoff did…
In the MVP hearing, Fisher himself spoke to the Board on a “fact” basis about affordability; and no one would be surprised to hear that the insurance rates aren’t affordable.
As I said earlier, the rate question is very important. The path through that minefield is worked out in the contest between the actuary for each carrier, and the actuary for the Green Mountain Care Board. The actuaries study the cost data and supporting information for each book of business and then strike what each believes is an equitable rate level. The Board almost certainly will cut the rates requested by each carrier; at least that’s what it has done in the past. The size of the cuts, however, will fail to achieve “affordability.” The Board will rely on soft spots suggested by its actuary, and it will throw in whatever amount of political reduction aiming at easing the burden on Vermonters it thinks it can get away with. That’s basically how the system works.
What was the significance of the whole Health Care Advocate flap? Basically, nothing at all. In his capacity as advocate, Fisher just nibbles around the edges of the tangle of issues the Board deals with. The whole reason that health care costs, and the consequent reform efforts, have galvanized the whole country is because health care costs are unsustainable, and the public can’t afford them. The real question is what to do about it. Nothing in the rate hearings shed any new light on that.
The issue of political leadership on health care reform is directly pertinent, however, and it is worthwhile looking at the fallout from the rate hearing to assess that. Several important players fell short there.
One was VTdigger, whose reporter got the initial story wrong: The Advocate was never “barred” from the hearings. Digger corrected its story a few days later, but it never corrected the headline. And given that there is really not any other day-to-day journalism coverage in Vermont, the damage a bad Digger story can do is considerable.
The tweet storm cited above serves to demonstrate that point. Neither Dean, Sirotkin or Ashe bothered to check whether the Digger story was valid. The Sirotkin comments on Front Porch Forum were reasonable and harmless, despite the fact that they were inspired by error. But Dean and Ashe just launched right into the yahoo mode. Ashe’s suggestion that the Board throw the motions by the insurance carriers “in the waste basket” may sound good on the street, but would be irresponsible in a courtroom.
The really bad performance came from former Governor Howard Dean. Dean really wasn’t interested in the insurance rate issue. His claim was that the Green Mountain Care Board “has never been effective”, that it appears to be “in the pocket of insurance companies,” and he concludes:
“The GMCB should be disbanded.”
That proposition is preposterous, right out to the point of being irresponsible. Dean, who is a physician and who, as Governor, managed the health care system, more or less, for 11 years, has got every element of his tweet wrong. There is not a scrap of evidence that the members of the Green Mountain Care Board are in anybody’s pocket.
As for the Green Mountain Care Board never accomplishing anything, that is simply false. The Green Mountain Care Board has cut the annual inflation rate for the Vermont hospital system by two thirds; and its oversight of the process of shifting health care reimbursement from fee-for-service to capitation has put Vermont in the forefront of health care reform in the United States.
It is fair, therefore, to ask just how boneheaded commentary by major players in the system, from political leaders to the press, actually impedes the progress of reform. In fact, it hasn’t blocked reform in any serious way-yet. But it remains a constant threat. In the 2017 legislative session, for example, Senator Sirotkin pushed hard for something called the pay parity act that was so wrong-headed that it finally fell of its own weight. (My tiny corps of elite readers may recall my posts on that).
A contrary example occurred in this year’s session when Ashe, in his capacity as the Senate boss, steered the so-called universal primary care bill into the weeds, which is where it belonged. (My elite readers may recall those posts, also). That was a signal piece of courageous leadership, given how popular the universal primary care idea is and how damaging it would have been to Vermont reform. The narrow point here is that Ashe is a very important player and it matters whether he plays well, or not.
The broader point is that the same is true of the other opinion makers. Remaking the health care delivery system and driving its unsustainably rising costs down to the Consumer Price Index is hideously difficult, and in the long run the outcome will have to be acceptable to the public.
The opinion-maker performance in the insurance rate cases was simply shameful. Anyone who thinks that such a performance isn’t a dangerous risk to the whole reform effort needs to think again.