Governor Says Vt. Reforms Could Be Health Care Model

LIANE HANSEN, host:

This is WEEKEND EDITION from NPR News. I'm Liane Hansen.

This week, the Senate is expected to release its version of health care overhaul legislation. Questions remain about what a Senate bill will look like. At issue: provisions for government-sponsored health insurance also known as the public option.

The House narrowly passed its own bill earlier this month, which requires every state to participate in such a program. A proposal in the Senate would allow states to opt out of this plan.

Republican Jim Douglas is the governor of Vermont. He's also chairman of the National Governors Association and he joins us from the studios of Vermont Public Radio. Welcome to the program, governor.

Governor JIM DOUGLAS (Republican, Vermont; Chairman, National Governors Association): Well, thanks for having me.

HANSEN: Briefly explain what the opt-out provision is and how it would work.

Gov. DOUGLAS: Well, you probably should ask the proponents to explain it. But as I understand it, the Congress would establish a so-called public option, a publically-run insurance program, and then allow states not to participate. To be perfectly honest, I don't think it's much of an option at all.

It seems to me that if a program is offered by the federal government, much as the recovery dollars were earlier this year, then it's unlikely any state is going to opt out.

HANSEN: What are you hearing from your fellow governors about this?

Gov. DOUGLAS: Well, I think the reaction is mixed frankly. Some governors think it's a good idea; some don't. It may be largely along partisan lines, to be perfectly honest. But really, in the end, the governors are not as focused on the public option question as some in the media are. We're more focused on the unfunded mandate and the impact on the fiscal stability and budgets of the states. That's really what's going to matter to governors most.

HANSEN: There have been many governors whod voiced concerns about whether states will be left footing the bill for the expansion of Medicaid as part of the proposed overhaul. Can you explain that issue for us?

Gov. DOUGLAS: That's a real problem because Medicaid is, in some states, the most expensive public program they have or at least nearly so and many others. And with health inflation as rampant as it is, the cost of that program continues to increase at a time when states can least afford it.

So, an unfunded mandate from Washington, a requirement that states extend Medicaid benefits to more residents without the full federal support to pay for it, is going to put real pressure on state budgets.

HANSEN: If you're just joining us, I'm speaking with Jim Douglas, the governor of Vermont and chairman of the National Governors Association. You are in part responsible for overhauling Vermont's health care system beginning in 2006. How does the system work in Vermont?

Gov. DOUGLAS: I think it works quite well and, frankly, could be a model for the nation. We launched, you know, three initially something called the Blueprint for Health. That's a focus on wellness, on early detection and screening, on preventive care, on chronic disease management. I realize that the time that our Medicaid budget was headed for unsustainability, we got permission from the federal government to redeploy our Medicaid dollars for preventive care.

And we've seen a significant decline in hospital utilization by Medicaid participants and trips to the emergency room and in the dollars we're expending. Secondly, we have a community health team that coordinates the care for each individual person. And we provide payment incentives for following that model.

We have all the public participants, except Medicare, participating and all of our private insurers. This has improved the quality of care. It's beginning to contain costs, especially in our Medicaid program. And I think that's really where the national debate ought to be. There's so much distraction about public option and things of that sort, but really what's going to make a difference in the long run is the kinds of reforms we put in place here. That's what's going to bend the cost curve and I think, more importantly, improve the health of the American people.

HANSEN: Would your health care system be affected by federally mandated reforms?

Gov. DOUGLAS: Well, less so than in most other places because we have such an expanded Medicaid program now, the financial impact will be fairly small. So, when I argue against the unfunded mandates, it's on behalf of my colleagues in the National Governors Association, some of whom would see huge increases in their state budgets, perhaps as much as a billion dollars.

HANSEN: What lessons did you learn from drafting health care legislation on a state level that could apply to the current debate?

Gov. DOUGLAS: I think the most important thing is to focus on bending the cost curve and recognizing that three-quarters or 80 percent of the cost of health care in America is for chronic disease. As an aging society, we're going to see more of that because, statistically, older Americans are more likely to have one or more chronic illnesses.

So, we have to, as the gangster in the '30s said, go where the money is. And that means bending that cost curve by managing chronic disease more successfully. First of all, we should try to prevent chronic disease, and that means making sure that we focus on nutrition, on fitness, on wellness, on ensuring that everybody is screened for chronic disease and gets a regular physical exam.

These things are not sexy. They don't result in a quick political victory. But in the long run, as we've seen since we launched our Blueprint for Health reforms in '03, it really does bend that cost curve and, I think, improve things.

And twice now, by the National Health Foundation, Vermont's been designated the healthiest state. So, our reforms, I think, are working here and could be a model for the rest of the country.

HANSEN: Jim Douglas is the governor of Vermont and chairman of the National Governors Association. He joined us from the studios of Vermont Public Radio. Thank you.

Gov. DOUGLAS: Thanks for having me. Transcript provided by NPR, Copyright National Public Radio.