Vermont’s pursuit of all-payer waiver sparks health care rationing debate

By Emma Lamberton | Vermont Watchdog

With the Green Mountain Care Board seeking to transition Vermont into an all-payer health care system by 2017, one word continues to resurface in the discussion of Vermont’s health care future: rationing.

“If people mean taking choice away when they say rationing, then they’re right,” state Rep. Anne Donahue, R-Northfield, told Vermont Watchdog.

Donahue, a supporter of the all-payer waiver, believes limited government rationing makes sense in some cases, such as requiring health care providers to use less expensive generic drugs.

“If you did not have a choice and had to have the generic even though you wanted to pay more, is that rationing? No. (But) it would be controlling the decision making, which does mean taking choice away,” she said.

The idea of all-payer waiver is the remnant of Gov. Peter Shumlin’s single-payer hope shot down by the Legislature this past session. Vermont’s Green Mountain Care Board has begun negotiations with the federal government to obtain waivers that would hold Medicare and Medicaid to set payout rates and enable the Board to approve budgets of health care providers.

While backers of the all-payer plan say waivers will help Vermont control health care costs and address the problem of underpayment by Medicare and Medicaid, critics argue the new system will lead to rationing.

Donahue says rationing is already taking place.

“(Currently), you, the individual, don’t necessarily get to choose anything and everything you think you need for the best health care,” she said. “Insurance companies and the state require the use of generic (drugs) when they’re available rather than the big brand name. People still try to demand the brand name and try to pressure their doctors to prescribe the brand name even though the generic is available.”

Such decisions about care aren’t bad, Donahue said, even if the decisions aren’t what patients or doctors would choose.

An all-payer system can be implemented in multiple ways. One way is through the use of a global budget, as exemplified by Canada’s health care system.

In a 2012 report from the Montreal Economic Institute, economist Yanick Labrie described global budgeting for Quebec hospitals as “based essentially on amounts spent in the past.” According to Labrie, government decision makers increase spending amounts on an annual basis to account for rising costs of labor, drugs and medical equipment.

While Labrie says government decision makers view global budgets as “easy to administer and useful for reining in rising costs,” he offers a warning:

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