MANCHESTER — The two leading candidates for governor decried the unsustainable cost of health care Friday and agreed that reforms to the payment system for hospitals and doctors must continue.

They were split, however, on whether to fix the state's health care exchange.

In a forum before hospital officials, Democrat Sue Minter and Republican Phil Scott also diverged on whether the high percentage of Vermonters on Medicaid — about one in three — was good or bad news.

Scott, the lieutenant governor, said having so many people on the federal/state program was a clear sign the economy was suffering and poverty prevalent because the program's eligibility is based on income.

"That's nothing to celebrate," Scott said. "That's worse than the canary in the mineshaft. That's a whole flock."

He also criticized the high administrative costs, about 15 percent, compared to insurers like Blue Cross/Blue Shield whose administrative costs he pegged at less than half that. In the past six years, Scott said those administrative costs have increased $100 million.

Minter, a former lawmaker and state Transportation Secretary, saw the high numbers — Vermont has the second highest percentage of Medicaid participants per capita — as less dire.

"I would not say celebrate. (But) I would say I'm grateful we have a program" that through expansion under federal health care reform has allowed more Vermonters to qualify for subsidized insurance. The uninsured rate is now under 4 percent.


Both candidates acknowledged the lower reimbursement rates for Medicaid patients was a budgeting challenge for hospitals and doctors. Neither committed to increasing those rates.

They exchanged views during a one-hour discussion before participants at the annual meeting of the Vermont Association of Hospitals and Health Systems at the Equinox Hotel in Manchester.

Gov. Peter Shumlin's administration has been negotiating with the federal government to get permission to set up a giant organization of health care providers and try to get every doctor and hospital to sign up, with the goal that they could offer patients more coordinated and less expensive care.

Scott, and to a lesser degree Minter too, were skeptical about the all-payer proposal. Scott said he didn't understand how it would work and when he asked the crowd if any of them did, no one put up their hand.

"This could be the best thing since sliced bread. This could be the answer we're looking for, but I heard the same thing before with single payer," Scott said, adding Vermonters were right to be gun shy after that proposal did not go forward. Shumlin dropped plans for a public health system that would have been funded by taxes and not premiums after he deemed the payroll costs would be shock the state's economy.

Minter said the idea behind the "all-payer model" which would coordinate payments made by Medicaid, Medicare and commercial insurance made "theoretical" sense, but also said she wanted to see more details.

The two mildly tangled over the future of Vermont Health Connect, the state's health care exchange, that was set up in response to federal reforms and has been beset by problems. More than $200 million was spent on setting up the exchange. Scott said it was past time to go to the federal exchange or partner with another state.

Minter said she wanted to fix the current website. She pushed back on Scott's desire to move away from Vermont Health Connect and worried that 19,000 Vermonters would lose subsidies. Scott said 30 states don't have their own exchanges and said the state could provide subsidies directly. Minter challenged that notion.

Minter and Scott agreed the cost will go too high if hospitals and doctors continue to be paid for each procedure and don't work together to keep down costs and provide more coordinated care.

"The system of payment does not reward prevention. The system of payment rewards more visits, more prescriptions, more procedures," she said of the system commonly called "fee for service." When doctors work less "in silos" and together, savings can be achieved.

Scott agreed the system needed to be more "symmetrical" with health care providers cooperating and not competing for limited resources.

The two candidates agreed that high expectations for care drive up costs. Minter worried in particular about end-of-life care.

Scott also said people's poor habits also are contributing to the high costs of health care.

"We have to be honest with ourselves and look at ourselves in the mirror," he said. Later, Scott gave credit for some cost savings to Vermonters who have made lifestyle changes.

Mark Johnson is a senior editor and reporter for VTDigger. He can be contacted at Follow Mark on Twitter @markjohnsonvtd.