Green Mountain Care Board Budget - April 12, 2023

Robin Lunge and Jessica Holmes, members of the Green Mountain Care Board (GMCB) presented the history and overview of the GMCB to the House Appropriations Committee on Wednesday. Holmes introduced herself stating that she is an economist and has been a member of the Board for eight years. She explained how the uniqueness of health care justifies the extensive government oversight through laws and regulations. In most markets, transactions involve only a buyer and seller, but in health care there is the presence of third parties, including insurers as well as the role of government.

In other markets buyers have full information about the equity of a product or service and the price they will pay. In health care patients often don’t know what they need and cannot evaluate the quality of their treatment. Also, in other markets, buyers pay directly for the goods or services being exchanged, but in health care providers are usually paid by third parties (private or government health insurance) and only after the transaction has occurred. Lastly, free market prices coordinate the decisions of market participants and lead to efficient outcomes. In health care the access and payment rules established by insurance companies and government payers largely determine the allocation of resources, and the resulting allocation may not be the most efficient.

She continued to explain that economists who assess the overall performance of a health care system focus on three components (“Triple Aim") namely access, cost, and quality. Access to the health care system is often tied to access to health insurance. Lack of health insurance may lead to serious consequences. Holmes continued on to discuss the impact of the Affordable Care Act (ACA), which had a primary focus of increasing access to health insurance.

She also discuss how access to health insurance varies by state, however the ACA made huge strides in reducing the numbers of uninsured, but there are still more than 27M Americans without health insurance. She stressed that costs are the main take aways in that we spend more per capita for health care than any other country. Our health care expenditures are also growing faster than the economy, resulting in consuming more and more of our household, state and federal budgets. Costs that are driving up health care spending include growth of third-party payers, technological growth, consolidation and an aging population. She concluded that the quality of health care has not necessarily improved and stressed that the US performs poorly on basic health measures such as child and mortality and life expectancy at birth. She pointed out various factors, including social and environmental factors (housing, education, transportation and environment).

Lunge continued the presentation with a discussion about regulation and the history of the GMCB. The purpose of government policy and regulation includes programs for the low-income, elderly and children support, cost containment and consumer experience. There are Federal and State roles in health policy and regulation. She stated that Federalism in health policy includes dual sovereignty, with power shared by federal and state governments. Vermont health regulation and oversight includes the Legislative Branch: the Senate Health & Welfare, Finance, and Appropriations committees. It also includes the House Health Care, Human Services, and Appropriations committees. The Executive Branch reports to  the Governor, and includes the Agency of Human Services; the Department Of Vermont Health Access (Medicaid); the Department of Health; the Department of Disabilities, Aging and Independent Living; and the Department of Financial Regulation. The Executive Branch also includes an independent, public body, which is the GMCB. Lunge continued to discuss the basics of the GMCB, including that it was established in 2011, has five board members with 6-year staggered terms. The GMCB regulatory process includes hospital budget review, Accountable Care Organization oversight, provider rate setting, as well as various other regulations. She described the GMCB scope of regulation as "primarily financial."

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