Time has come for real health care cost control
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By Topper McFaun - Published: February 13, 2008
As I am invited to speak at forums around the state on House Bill 304, people ask me why a Republican would sponsor a bill that establishes a universal hospital health care benefit that would be publicly financed.
The answer is simple: When I went door to door, campaigning in my community, I asked people what they were concerned about. I heard over and over again, "We cannot afford health care" and "We are worried about our property taxes."
I looked into these overwhelming concerns of my constituents. They were well-founded.
I found the cost of health care, seriously effects our school and municipal budgets, which, in turn, drives property taxes.
In last seven years, the cost of health care in Vermont has doubled from about $2 billion in the year 1999 to about $4 billion in 2007. If costs keep going up at the same rate as they have been for the last 15 years, they will double by 2015 to $8 billion.
Health care costs are, indeed, out of control. They affect every sector of our lives and the economy of our state.
The uncontrolled, rising cost of health care has a dramatic effect on the education of our children and services provided to Vermont citizens, because of its impact on budgets of schools and state and local government. The cost of doing business in Vermont is affected as well, for the same reason.
Hospital costs account for about one third of the cost of the entire health care system. Hospital costs are one of the most rapidly rising parts of the health care system. It seemed to me that it made sense to start with the biggest and most rapidly increasing cost factor in the system and attempt to apply some strong fiscal controls that would influence health care costs and consequently property taxes.
So how do I propose to deal with this problem? Here are some first steps.
First, we create fixed budgets for the hospitals. We already have the governmental machinery in place in the Agency of Banking, Insurance, Securities and Health Care Administration to accomplish this without adding more bureaucracy.
Secondly, we create a hospital security trust fund in the State Treasurer's office and publicly finance this effort. Under existing law, this would automatically bring down insurance premiums that businesses and individuals pay by approximately 40 percent.
There is no free lunch. This is a tax swap.
There are a number of ways we can fund the trust fund that will cost us less than what we pay for our hospital health care now. The underlying principle is to spread the cost over all residents.
When we discuss the plan in the Legislature, and give the people of the State of Vermont the opportunity to weigh in, through testimony and the public hearing process, we can make decisions on which is the fairest way to provide the revenues for the hospital security trust fund.
This is a very complicated task, and we must carry it out responsibly.
We must ensure the quality of hospital care does not suffer. We must ensure everybody is covered. We must ensure everybody contributes according to their ability to pay. And, finally, we must ensure that going forward we keep the costs under control.
What do we get for these changes?
We get hospitals that can concentrate on the quality of care rather than having to focus on chasing the money that's owed to them to keep their doors open. We end the cost shift that business and individuals bare because the cost of covering everyone for hospital health care already is paid for. Most importantly, all Vermonters would have hospital coverage.
People could go to the hospital, receive the services necessary, go home and recover, spend their energy on getting better rather than worrying about a huge hospital bill that they won't be able to afford.
I believe this approach would be good for business and our Vermont economy. The substantial reductions in premiums would mean business, as well as people, would have a little more money to use for other things.
Our hospitals deliver good care to us. We just can't afford it.
As a Republican, I want to find a way to retain this excellent care while developing new and innovative approaches to meet the challenges of changing times in the health care field.
I believe H304 is the beginning of a conversation that will result in a fiscally responsible way to control the cost of health care.
I could go on, but the bottom line is that it is time that we take strong and innovative action to ensure average Vermonters don't continue to be burdened by uncontrolled, ever-increasing health care costs they can't afford.
Topper McFaun is a Republican representative from Barre.
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