From 2010 to 2019, annual medical claims for Vermont state employees, retirees, and their families rose 51% from $ 94 million to $ 142 million, according to state examiner Doug Hoffer.
Hoffer released a report on Friday, which explored how the state could save money on health care by incentivizing people to choose cheaper care. Hoffer said the state pays different amounts to different providers for the same health care benefits.
“The price difference paid for exactly the same health procedures under the state health plan for workers is appalling, especially since higher prices do not necessarily mean higher quality,” Hoffer said in a press release. “Our research found that the provider with the highest price for a given service was paid, on average, 3.5 times more than the provider with the lowest price for the exact same service.”
In the case of an electrocardiogram, according to Hoffer, the gap between the highest and lowest costs is “astonishing” 9.3 times.
“When government employees and their families are cared for by the most expensive health care providers, often unaware, it increases the cost of health care for patients, the state and taxpayers,” he said.
Strategies To Save Money In Healthcare
Hoffers said other states facing the same dilemma have developed two strategies to reduce costs:
- Reference-based prices: The health care buyer, in this case the state of Vermont, sets a maximum price for what they are willing to pay for a service rather than using the price negotiated by insurance companies and hospitals. According to Hoffer, Montana introduced reference-based pricing for its government employees and saved $ 47.8 million in three years. Hoffer estimates that this approach could save Vermont up to $ 16.3 million annually.
- Incentives for inexpensive care: With this model, employees receive comparative price information and receive a monetary incentive for choosing a cheaper provider. Hoffer estimates that Vermont could save $ 202,000 annually on seven services highlighted in his report. With every additional service, the state would realize additional savings, said Hoffer.
“Other states that are under the same pressure as Vermont have decided to do something about it,” Hoffer said in a press release. “I strongly encourage the Scott administration, legislature and government officials to expand our research and implement a strategy that benefits government officials, the state budget and taxpayers.”
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Contact Dan D’Ambrosio at 660-1841 or firstname.lastname@example.org. Follow him on Twitter @DanDambrosioVT. This reporting is only possible with the support of our readers.