BRATTLEBORO >> In theory, Vermont's "all-payer" healthcare proposal should be music to Louis Josephson's ears.

The Brattleboro Retreat's top administrator listened Wednesday as state officials described an ambitious plan to contain health care costs and improve quality. One of the plan's major goals is reducing overdose and suicide deaths – two key issues for a mental-health provider like the Retreat.

But Josephson, like others who attended a public meeting in Brattleboro, was not ready to offer a full endorsement. While he's "cautiously optimistic," the Retreat's president and CEO wants to see how the state structures the all-payer plan – and whether it offers more services for those who struggle with addiction and mental illness.

"I don't think anyone's arguing with the concept or anything like that," Josephson said. "It's just that the devil is in the details."

State officials announced last month that they have a draft agreement with the federal Centers for Medicare and Medicaid Services that would allow Vermont to restructure the way health care providers are compensated.

Currently, the system operates on a "fee for service" model: Health care providers are paid based on the volume of services provided to patients. Under an all-payer model, officials say physicians would be compensated based on the quality – not necessarily the quantity – of care they provide.


The money would flow from insurance providers – Medicare, Medicaid and commercial insurers like Blue Cross and Blue Shield – to health care providers via a large group in Vermont called an Accountable Care Organization, or ACO.

State officials say participation would be voluntary: Doctors would have the choice to either opt into the all-payer system by joining an ACO, or they could continue to charge fees for services as they do now.

The state's all-payer agreement is not yet finalized. More information on the proposal is available on the all-payer section of the Green Mountain Care Board's website:

Also, officials have sought public comment at meetings like Wednesday morning's session at the Brattleboro Retreat.

With Gov. Peter Shumlin looking on, state officials spent part of the session making a sales pitch. Michael Costa, Vermont's deputy director of health care reform, stressed that the state is not proposing to take over the health care payment system.

Vermont Gov. Peter Shumlin listens to people during an All-Payer Forum held at the Brattleboro Retreat on Wednesday, Oct. 12.
Vermont Gov. Peter Shumlin listens to people during an All-Payer Forum held at the Brattleboro Retreat on Wednesday, Oct. 12. (Kristopher Radder Brattleboro Reformer)

"Whatever covered services and physicians you can see with your current insurance, there is nothing about the all-payer model that can change that," Costa said. "This is really about changing how providers get paid. We move from fee for service to a system that pays for keeping people healthy. That's potentially a game-changer in the health care system."

It's a game-changer, Costa argued, because officials believe all-payer can boost the quality of patient care while also cutting health care costs.

Rapidly rising costs are "taking a huge bite out of people's wallets, out of business budgets, out of state budgets," Costa said. "That's a real problem, and it's getting worse over time because health care costs grow a lot faster than the economy, and they grow a lot faster than people's wages."

Under the proposed all-payer deal with the federal government, officials would target a 3.5 percent annual growth rate in health care costs in Vermont. Given that the current growth rate projection is 6 percent, that lower rate could result in a savings of almost $10 billion over a decade's time, officials say.

All-payer would align all insurers under the same payment plan, and advocates say it also would unite health care providers with public health officials in an effort to improve the health of Vermonters. Under the all-payer proposal, the state has set three main goals in that regard – improving access to primary care; reducing deaths from suicide and drug overdose; and reducing the prevalence of chronic disease.

Officials say they'll use a variety of measurements to chart Vermont's progress at the statewide level toward those goals. That includes patient surveys, medical records, insurance claims, hospital discharge data and state Health Department information.

The process will take years, warned Pat Jones, health care project director at the Green Mountain Care Board.

"Quality improvement doesn't just occur on a dime," Jones said. "It really takes time to design quality improvement interventions, to implement them and to actually see them bear fruit."

But skeptics wonder whether all-payer can deliver.

At the Brattleboro meeting, resident Spoon Agave stood to argue for the merits of a unified, government-coordinated health care system. He didn't hear any such promise in the all-payer proposal.

"What I've heard here today, to me, as a citizen who's not terribly well-versed in all the health care issues, is a lot of gobbledygook," Agave said. "I don't even know what questions to ask."

Shumlin defended his previous work toward a single-payer, publicly funded health care system but said the tax projections associated with that plan turned out to not be feasible. Health care cost containment has to come first, the governor argued.

"I think this (all-payer) system, if we can get costs under control and improve quality, will help us lead to the universal access system that I wished we could have gotten," Shumlin said.

Richard Davis, a Guilford resident and frequent health-care commentator, wondered whether the state's health care improvement benchmarks were "pretty high to reach and possibly unrealistic." He also asked about the costs and bureaucracy necessary to implement the all-payer plan.

Jones said state officials did extensive research and "really felt like the benchmarks we came up with were realistic." She noted that the state faces no financial penalties if it doesn't reach those goals.

As to the cost question, officials noted on Wednesday that the Centers for Medicare and Medicaid Services and the federal government are expected to provide a combined $250 million to support efforts related to the all-payer system.

Al Gobeille, Green Mountain Care Board chairman, also pointed to projected savings associated with improved patient health. For instance, he said more investment in primary care could alleviate the need for some expensive inpatient treatments, thus saving money in the long run.

He acknowledged, though, that there are unknowns as the state ventures into unchartered territory. "It is a risk," Gobeille said. "But I would also say there's a tremendous risk to keep doing what we're doing."

That's one reason that, in spite of the lingering questions about all-payer, some in the Brattleboro audience were enthusiastic about the state's proposal.

Dr. Karen Hein of Jacksonville has a long resume in health care, including time spent in the nonprofit and academia sectors as well as a previous stint on the Green Mountain Care Board. She wanted state officials to know "how absolutely thrilled and proud I am to be a Vermonter at this historic moment."

"I'm particularly thrilled that the shift has been from 'health care' to 'health' – that the perspective of this all-payer model is longer-term," Hein said. "That allows for the savings and for the improvements to happen over time and also encourages early intervention and prevention."

Hein asked what supporters should do next. Shumlin said the answer is "very short and simple – help us get it right."