The Curves of Cost That Are Extra-Special Bendy

Recently, the consulting firm hired to analyze Vermont’s upcoming health care implosion, er, implementation, found a rather large cost element that the people in

Don't worry - someone else is paying for this.

Don’t worry – someone else is paying for this.

charge find easy to bat away (courtesy of VT Digger).

An independent consulting firm says that over the next five years Vermont and the federal government will shell out more than $427 million to launch and run the state’s new health care-related information technology systems.

The Maine-based contractor BerryDunn also reports that the state will not see “quantifiable savings” within the first “five (or 10) years.”

And now, weighing in on that half-billion, is the guy in charge of implementing the system:

“It is a worthwhile investment to make sure that consumers accessing not just health coverage but other services provided by the state can be done in a way that is more user friendly, streamlined and more efficient,” said Mark Larson, commissioner of the Department of Vermont Health Access. “The federal government is making a substantial investment in all of these projects to make the investment by Vermonters very, very modest to achieve those important goals.”

The face-slapping irony in all of this is that a Shumlin plan, designed and touted to bend the “cost curve”, simply inflates the curve massively by spending half a billion on digital infrastructure which will be enormously difficult to quantify in terms of providing, what was it again…oh yeah. Health care.

This spending is just a way to set up ways to access health care.  It is not spending on a new hospital, doctors, rubber gloves, or liability insurance. We have

Hey, it's free!  Sharp, though.  It cuts.

Hey, it’s free! Sharp, though. It cuts.

increased costs with no (I would argue less) corresponding increase in health care that’s actually provided.

You can’t bend costs with legislation.  Cement has a cost.  Salaries have a cost.  Electricity.  Needles.  Medicine.  Food.  Legislators don’t determine what these things cost.  We can’t demand the best possible health care every time we pop into a hospital, covered by insurance or not, and then say “Hey, your costs are too high”.  No one complains about costs when they get an MRI to determine if they’re in real medical trouble or not.

There’s a reason why Canadians cross the border to receive these kinds of treatments, because in “bending” their costs, they have reduced the availability of care.  By mandating certain levels of care for everyone, they have actually created worse care for everyone.

It’s an older argument, but it’s still valid: You will always have a pool of uninsured.  The uninsured still receive care when they go to the hospital.  If you want to make sure those costs are covered, block grant Medicare to the states, and let them drive their own bus with the funds.  VHAP (which is going away) has served roughly 6% of the VT population (pg 41 in their budget).  Annually, it’s 35,000 or so Vermonters, at a cost of $150MM per year.

So: To implement the new health care “system” we could fund 3 years of VHAP. That would be about 100,000 cases served, just for the price of the system we and the USG are shelling out half a billion dollars for.  3 years of health care services thrown away so Vermont could build a new system simply for creating a system to let people know what health care offering they can sign up for.  For “free”.

And these are the people who tell us they understand how to fix the problem they keep telling us we have? I don’t think the problem is costs. I think the problem is politicians.

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4 thoughts on “The Curves of Cost That Are Extra-Special Bendy

  1. PIck any party, pick any bill. If it’s passed without people reading it, and it’s pressed through with presidential pressure and is a pet project (ie, ideological endeavor), it’s probably going to be at least not perfect, and at most (from a pessimistic perspective)- a complete failure, a waste of federal dollars and detrimental to society as a whole (whether or not it helps illegals get free health care).

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