• The job at hand
     | October 16,2005

    Many Vermonters associate health care with pricey bills. But a rising number see it as a regular paycheck.

    Politicians and the public are debating how to curb the $3 billion spent annually in the Green Mountains on medical services, a growing figure that now accounts for about 15 percent of the gross state product. But each dollar going out of someone's pocket is going into someone else's - and, increasingly, it belongs to a family member, neighbor or friend.

    Vermont's health care system employs more than 41,500 people, or about one of every 10 workers in the state, the latest government figures show. Hospitals are the largest private employer in six of Vermont's 14 counties. Add almost 1,300 facilities ranging from doctor's offices to nursing homes and health care is the state's third largest industrial employer, the Vermont Department of Labor reports.

    Economists say that's only the start.

    "For every job at the hospitals and related facilities, approximately one job is created in the state economy," a report commissioned by the Vermont Association of Hospitals and Health Systems says. "The people who work directly for the hospital receive paychecks, which they then use to purchase goods and services in the region's economy. This demand for goods and services, such as groceries, apparel, automobiles, appliances, and housing in turn, creates other employment in the region's economy and further stimulates economic activity."

    State lawmakers have launched an $800,000 study of ways to improve health care for all Vermonters, especially the one in 10 residents now without medical insurance. The challenge, experts say, is how to cut costs without chain-sawing state employment and the economy.

    Gov. James Douglas will gather medical professionals, insurers and business and consumer groups Monday for a statewide health care summit in Killington. But to discover the biggest player in the debate, he need only read the association report "Vermont's Hospitals and Health Systems Sector: An Assessment of Economic Impact" by independent researchers at Economic & Policy Resources Inc. of Williston.

    "Vermont hospitals play crucial, multiple roles in their local communities," the 166-page report says. "In many communities, the local hospital is one of if not the biggest single employer in the area, and the jobs they provide are among the best paid in the local labor market."

    All but one of the state's 14 community hospitals are among Vermont's 100 largest employers, statistics show.

    Fletcher Allen Health Care in Burlington, the state's largest hospital with more than 4,700 workers, is Vermont's third-largest employer after state government, with 8,000 workers, and IBM of Essex Junction, with 6,200.

    Six other Vermont hospitals are the biggest employers in their counties:

    - Rutland Regional Medical Center is tied with the nearby General Electric Co., each with 1,300 workers, as Rutland County's largest employer and the state's sixth-largest employer.

    - Central Vermont Medical Center in Berlin, with 1,100 workers, is Washington County's largest employer and just misses the state's top 10 list.

    - Southwestern Vermont Medical Center in Bennington, with almost 900 workers, is Bennington County's largest employer and the state's 15th-largest.

    - Northwestern Medical Center in St. Albans, with 600 workers, is Franklin County's largest employer and the state's 25th-largest.

    - The Veterans Affairs Medical Center in White River Junction, with 600 workers, is Windsor County's largest employer and ties with Northwestern as the state's 25th-largest.

    - Gifford Medical Center in Randolph, with nearly 400 workers, is Orange County's largest employer and just makes the state's top 50 list.

    Even Vermont's little hospitals are big employers. In Windsor County, the second-largest employer is Springfield Hospital with 450 workers, followed by Mt. Ascutney Hospital and Health Center in Windsor with 375. In Windham County, Grace Cottage Hospital in Townshend may be the state's smallest hospital with 150 workers, but it's the town's largest employer.

    In total, more than 10,000 Vermonters work in hospitals, the latest government figures show. But at least 16,000 more work as or for doctors, dentists and other health professionals and another 7,000 work in nursing homes and residential care facilities.

    "Hospitals are just the tip of the iceberg when looking at our health care system," says Lawrence Copp, a founder of Economic and Policy Resources. "There's emergency care, the visiting nurse association, the elderly housing facility. Every chronic condition has a nonprofit organization like the cancer society and heart or diabetes association. And we haven't even talked about drug delivery, the guy who supplies oxygen to people with respiratory problems. When you put it all together, it's a very big network that employs a lot of people."

    Ten of Vermont's top 50 employers deal with health care. Among the state's 100 largest employers are mental health agencies in Chittenden, Rutland and Washington counties, the Brattleboro Retreat psychiatric hospital, insurer Blue Cross and Blue Shield of Vermont and at least one visiting nurse association.

    Copp and his fellow state economists can cite more collaborating statistics than the most diligent of town-meeting debaters:

    - Vermont health care jobs pay a total of about $1 billion a year, or more than 10 percent of all salaries in the state. An individual medical worker's pay averages $31,053 a year compared with $30,239 for all jobs.

    - Health care jobs in the state grew from 23,641 in 1990 to 31,776 in 2001, a 34 percent increase over the decade. Only two industrial sectors employ more Vermonters: durable goods manufacturing with 33,468 jobs or 11.2 percent of total employment, and "leisure and hospitality" with 33,161 jobs or 11.1 percent of total employment.

    - Health care grew from $526 million or 4.5 percent of the gross state product in 1990 to more than $1 billion or 7.3 percent in 2001. (In comparison, in that latter year the combination of finance, insurance and real estate accounted for 18 percent, durable goods manufacturing for 11.7 percent and retail sales for 10 percent.)

    - Health care's percentage of the GSP grew an average of 9.3 percent per year over the decade, outpacing the total annual GSP growth rate of 4.5 percent by 2-to-1.

    Vermont health care spending is expected to grow an average of 7.8 percent annually for the next three years, according to the Vermont Department of Banking, Insurance, Securities and Health Care Administration.

    "This sustained rate of increase will continue to pressure businesses providing health insurance coverage for employees and dependents, public programs such as Medicaid and Medicare assisting low-income, elderly and disabled Vermonters with medical expenses, and Vermont residents paying their share of rising health insurance premiums and uncovered medical expenses," the department warns in its new Health Resource Allocation Plan.

    Beatrice Grause, a nurse turned president of the Vermont Association of Hospitals and Health Systems, understands the dual nature of the state's medical economy.

    "We're an economic engine, but it's one that comes with the price tag," Grause says. "We're seeing double-digit inflation in health care costs. What do you do about that? If you don't do something, you hurt the economy. If you downsize the industry, you hurt the economy. That's why health care is so hard to fix politically. If it was easy, we would have done it already."

    Even so, Grause and her association have some suggestions. Health care workers currently are paid for every medical procedure and hospital stay they provide. They have no financial incentive for keeping people healthy and away from expensive treatment.

    That must change, says Grause, who notes some experts want doctors and other professionals to receive a set sum to care for an individual for a period of time.

    Vermont health care providers also must develop a statewide electronic information system so they can avoid duplicating calls for tests or treatments and see medical trends before they become too costly, Grause says.

    "The bottom line is unless we figure out how to provide people the right care in the right setting at the right time - before they wind up in a hospital - we're rearranging deck chairs on the Titanic."

    But experts acknowledge many jobs can't be streamlined, no matter how healthy Vermonters become.

    State statutes, for example, say "all persons who suffer sudden and unexpected illness or injury should have access to the emergency medical services system." In Vermont's rural patchwork of scattered towns, that translates into 92 first-response units and 90 supplemental ambulance squads.

    It costs about $350,000 a year to operate and staff one ambulance. And that's increasingly difficult for the one-third of Vermont squads that average less than one call a day.

    "Geography and demographics in Vermont necessitate a distribution of more ambulances statewide than would be required to provide service in a more densely populated urban environment," the health department says in its Vermont State Health Plan. "We need EMS everywhere, but we don't need it anywhere very often. This leads to an inherently inefficient system."

    But even with the state's roller-coaster geography, Copp says better health can save money.

    More than half of all Vermont adults have some sort of chronic health condition, be it, in order of prevalence, heart disease, cancer, stroke, lung disease, diabetes, Alzheimer's disease or liver disease. The cost of treating those ailments represents 76 percent of physician visits, 81 percent of hospital admissions, 91 percent of prescriptions and 83 percent of the $3 billion spent on health care in the state each year.

    "Preventing these chronic conditions are some of the best opportunities to reduce costs," Copp says.

    The economist has heard concerns about the effect on jobs. But he notes many workers providing treatment could stay employed by helping with prevention. He adds the only problem bigger than paying so many employees is replacing those who are retiring or moving away in search of greater opportunities and pay.

    "At the same time that demand is increasing, Vermont is experiencing workforce shortages and mal-distribution in a number of health care professions," the state's Health Resource Allocation Plan reports.

    Vermont has more than 1,500 licensed doctors. But four out of the state's 13 hospital service areas - Morrisville, Newport, St. Albans and White River Junction - have a serious shortage of primary care physicians, according to national standards that call for at least 67 full-timers for every 100,000 people. (Two more areas - St. Johnsbury and Springfield - are below the national average.)

    The state has about 6,900 registered nurses. But that number also isn't enough. One recent state survey found 12 percent of positions vacant in hospitals and home health agencies and 19 percent vacant in nursing homes. The median age of Vermont nurses is approaching 50, with experts forecasting the supply will not meet the state's needs after 2011.

    Of 54 specific health professions, the state points to 20 fields where recruitment and retention of workers is a problem. Of the 350 dentists in Vermont, more than one-third say they plan to retire within 10 years, although many have been unsuccessful in recruiting someone to take over their offices. The state also reports low numbers of psychiatrists (153 for 621,394 people) and podiatrists (a mere footnote at 24).

    But Copp sees some good in the seemingly bad numbers.

    "Are we talking about saving money in health care and putting a lot of people out of work? Right now there's a major shortage of workers in some areas, so you might not be displacing people, you might help make a huge shortage go away."

    So if Vermonters got healthy, they'd solve all their economic problems?

    If only it was so simple.

    "If there was a silver bullet, we would have found it a long time ago," says Jeffrey Carr, a member of Copp's firm and a longtime economic consultant to the state.

    Government leaders will spend the next several months debating possible fixes.

    Douglas has invited more than 150 people to his health care summit Monday at the Killington Grand Hotel. The meeting will feature morning presentations by groups ranging from Vermont Businesses for Social Responsibility to the Vermont League of Cities and Towns, a lunch speech by Dartmouth Medical School professor Dr. Elliot Fisher, and afternoon roundtable discussions.

    The Vermont House and Senate Health committees, for their part, are holding public meetings throughout the state this fall in anticipation of proposing reforms this winter.

    Democratic legislative leaders are pushing a "publicly financed, integrated, regional health care delivery system" they hope will save money through administrative efficiency. The governor, a Republican, instead favors more private-sector involvement, hoping competition will lower costs. Neither side, however, has yet to outline specifics, let alone how they would affect employment.

    Former Vermont House Speaker Walter Freed hopes that will change. The Dorset Republican is one of two gubernatorial representatives on a newly formed Legislative Health Care Commission. He's also one of the few people so far to focus on the question of jobs.

    "It's easy to talk about cutting costs, but how do you streamline the system, and what does the end product really look like?" Freed asks. "I'm trying to force that debate. We need to get off the theoretical and get on to the end result. You can not talk of savings through efficiency until you put a face on it."

    Contact Kevin O'Connor at kevin.oconnor@rutlandherald.com.

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