Vermont's top health care regulator didn't hold back his words, or his emotions, when discussing the current state of Vermont's health care system.
"We're at a breaking point," he said on Vermont Edition Tuesday, his voice cracking, "and we have some pretty tough choices to make."
The complexity of the problem is well documented, if not well understood by the general public. Vermont has the highest health insurance costs in the country, and they continue to rise rapidly. The biggest players in the system are in financial disarray, including many of the state's hospitals and it's largest insurer, BlueCross BlueShield of Vermont.
Then, there are the proposed cuts to federal health care spending, including funding for Medicaid, community health centers and addiction services. Foster estimates these reductions could cost Vermont's health care system hundreds of millions of dollars — money it doesn't have to lose.
Insurance rates
Insurers will submit their rate requests to the Care Board around the first week of May, and it's close to certain that rates will jump yet again. "Brace yourselves," as Vermont's chief health care advocate Mike Fisher put it on Vermont Edition last month. "We haven't changed the way we're practicing, so why would we get a different result?" he said.
Foster expects the BlueCross rate request to be around 15-20%, if not higher. "It's simply devastating," he said. "It's not acceptable. It's not sustainable."
BlueCross insures more than 230,000 Vermonters — about a third of the state. It faces a significant deficit, far below the recommended range set by the Department of Financial Regulation.
Its CEO and President Don George points his finger in part at the Green Mountain Care Board. In a letter sent to key health care stakeholders earlier this year, George said the Care Board didn't allow BlueCross to raise its premiums as much as it should have for more than a decade.
While the Care Board did reduce some of Blue Cross's rate requests in an attempt to tamp down insurance premiums for Vermonters, Foster said that's far from the only reason for the insurer's budget woes. "Frankly, I think it's a little bit of an excuse," he said. "We actually need to look a little bit deeper and not blame others and look at our problems and tackle them."
Service cuts and hospital closures
To avoid yet another significant rate increase this year, Foster said we would need to quickly reduce health care spending in the state by several hundreds of millions of dollars. How to do that, when hospitals and health centers are already financially strained, is a question with an uncomfortable answer.
In a word: closures. Last fall, a state-mandated report by the consulting firm Oliver Wyman made headlines when it called out the dire financial state of some of Vermont's 14 hospitals. Without massive subsidies from commercial insurance increases or taxpayers, some hospitals are headed for bankruptcy.
"Last year we had six hospitals with less than 100 days cash on hand, and six hospitals with negative operating margins," Foster said. "It won't work."
Foster acknowledged that cutting services is almost an impossible pill to swallow. In February the UVM Health Network announced it would continue to run three dialysis clinics it had planned to cease operating. The initial cuts were made in response to budget orders from the Care Board, but when UVM said it couldn't find another organization to run the clinics, the Care Board raised the system's revenue cap.
Reversals like that won't be possible moving forward, Foster warned. "You can't have it both ways, where you have the status quo with 14 hospitals, with a full set of services they currently provide, and every other service around the hospitals, and not have large rate increases," he said. "We are in a crisis situation."
Federal cuts
Vermont's health care leaders and legislators are also rushing to prepare for massive proposed cuts to federal health care spending.
"With some of the federal changes that are on the horizon, our timelines may have been pushed up pretty significantly, and that means you're making these decisions in a much more compressed time period," he said.
Health care subsidies could be drastically diminished, as could federal funding for Medicaid.
Despite the myriad challenges, Foster continued to push for creative thinking, collaboration and action in order to solve the health care crisis.
"In Vermont, sometimes we kick the can down the road a little too long," Foster said. "We've done that in health care and we've done it in education, and then the problem gets harder and more intractable when we have to deal with it. But when we have to deal with it, we often come together and find solutions, and that's where we are now. We need to make the best choices we can with the realities we have in front of us."
But just before that, during a break in the program, he allowed himself to be visibly despondent for a few moments.
"It's so bad," he said, a tear sliding down his cheek. "It's so bad."
