Vermont hires contractor to evaluate Shumlin's single-payer financing options


MONTPELIER -- Bids on a state contract to evaluate financing plans for a public, universal health care program in Vermont were due Tuesday.

The selected vendor will design microeconomic models that will allow the Shumlin administration to test the economic impact of the different financing plans. The universal health care system is expected to cost the state between $1.8 billion and $2.6 billion in the first year of operations, according to Robin Lunge, director of Health Care Reform.

"If you think about how you would build a health care system, you start at the macro policy level and then get more and more granular," Lunge said.

The Department of Buildings and General Services, which handles contracting for the state, did not respond to questions regarding the number of bidders or what organizations submitted a bid. The value of the contract won't be known until a vendor is selected.

The Rand Corp. and the Massachusetts Institute of Technology participated in a conference call for potential vendors, according to a Vermont Public Radio news report.

The administration still intends to present a financing proposal to lawmakers in January, Lunge said, but added that it won't present a plan that isn't fully vetted. The original deadline for the financing plan was January 2013.

The selected vendor is expected to begin work in July, and Lunge said she thinks six months is enough time for them to help the state iron out the details of a workable financing plan.

"With this kind of planning process everything is difficult to predict when you'll hit a certain stage, but given the previous six months, this is really fitting in to where we hope to be," she said.

The simulations the vendor will run are expected to show how health care dollars, which account for one fifth of the state's economy, flow from individuals and businesses through the current system, how different plans to pay for a universal health care program might change behavior, and how the flow of money might change as a result.

The contractor will do that for Vermont's entire population using demographic, family size, income, health status, health care utilization, current health coverage, and cost data, according to the request for proposals.

For employers, the vendor will use data on the number of employees, the business' industry revenue and income, whether the employer offers coverage, whether the employer self-insures, the value of the coverage offered, employer contributions to premiums, and the percentage of employees who take up each type of coverage offered, according to the RFP.

Then the contractor will use "specific health care financing and tax reform scenarios" provided by the state to simulate the transition to Green Mountain Care.

Rep. Cynthia Browning, D-Arlington, said those scenarios are versions of the financing plan lawmakers were promised earlier this year. She is suing the Shumlin administration for work products related to the development of the plan.

Lunge would not say how many different models must be tested.

Using economic modeling, the vendor will also assist the administration in determining whether the scenarios under review meet the so-called "Act 48 triggers," or a set of requirements that must be met to move forward with the program. The government-funded system must not have a net negative impact on the state's economy under the legislative parameters.

The vendor will also help the administration write the first three-year budget for Green Mountain Care.

Lunge said she's confident the administration will be able to fine-tune a model that will work for Vermont in the six months before the administration hopes to present a financing plan.

"Given that this is how the rest of the developed world finances health care, there are a lot of viable models," she said.


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