Single-payer foes: State hid funding plan
By PETER HIRSCHFELD
Vermont Press Bureau | February 22,2013
MONTPELIER — Though they lack hard evidence to prove it, opponents of single-payer health care say the Shumlin administration has shielded from public view a secret financing plan developed by a team of academics at the University of Massachusetts Medical School.
At a Statehouse press conference Thursday morning, Vermonters for Health Care Freedom unveiled an “investigative report” based on 1,600 pages of documents yielded by a public records request.
Jeffrey Wennberg, executive director of the group, said the paper trail shows that the administration halted work on a partially completed financing plan after getting a preliminary look at the results.
The severity of the tax increases needed to fund single-payer, Wennberg said, likely compelled the administration to shelve the report for political reasons.
“The Legislature has required this information, taxpayers have now paid for this information, but for some reason the administration does not want you to see it,” Wennberg said.
Administration Secretary Jeb Spaulding dismissed the report as a piece of propaganda designed to erode widespread support for health care reform.
“I think we can expect to have more of these kinds of events between now and the time the new health care system is finally up and running,” Spaulding said. “There is no truth to the claim that we were provided a financing plan or pieces of a financing plan that scared us and we asked them to stop.”
Wennberg’s exhaustively researched project offers no proof that a financing plan exists. His report does highlight invoices showing the state paid more than $15,000 for the development of “financing options.”
But Robin Lunge, director of health care reform for the Shumlin administration, said the work produced as a result of that expenditure was included, in its entirety, in the single-payer report released by the administration last month.
“The financing plan, which quite frankly I don’t think anybody has read, provides information about the way that we finance health care today, which is the first part of the analysis,” Lunge said. “And that’s the work we paid UMass for.”
Founded in 2011, Vermonters for Health Care Freedom has spearheaded the charge against Gov. Peter Shumlin’s plan for a publicly financed, universal health care system.
Wennberg submitted the records request last month, after a long-awaited report on the single-payer system failed to include the financing plan mandated in state law. Spaulding defended the omission, saying that a shifting federal landscape had postponed any hope of implementing the new system until 2017, thereby voiding the need for the financing plan in 2013.
Wennberg, however, said the administration not only commissioned a financing plan, but directed UMass to cease work on it when they began seeing what kind of payroll and income tax increases would be needed to raise the $1.6 billion in revenue to support the single-payer program.
“It does appear that the consultants … were delivering at least preliminary analytical results to the administration in mid-November, and by late November a decision was made to stop,” Wennberg said.
He pointed to a series of correspondences over a six-week period in October and November, beginning with an Oct. 12 document titled “Vermont Health Care Financing Plan 2017 — Cost Components for Modeling.” The document stipulates the specific mechanisms that should be included in the “financing packages,” including the payroll and income taxes.
Wennberg’s report is online at the group’s website, vthealthcarefreedom.org.
An agenda for a Nov. 16 meeting between administration officials and UMass staff, Wennberg said, allocated time to discuss both “financing options” and “economic effects of financing models.”
But he said that by the time a Nov. 26 conference call rolled around, an agenda, obtained in the records request, indicated that the conversation had shifted to “what we are not doing on financing.”
Wennberg alleges that between Oct. 12 and Nov. 26, UMass produced at least part of a financing plan. He pointed to an invoice indicating that the state of Vermont had, through the month of November, paid UMass more than $15,000 for the production of “financing options,” and another $23,800 for an evaluation of the “economic effects of financing models.”
“Certainly they must have done analysis on at least the items that were agreed to in the (October document), which was the payroll and the income tax,” Wennberg said.
He said Vermonters for Health Care Freedom has compiled its own financing calculations and concluded that the single-payer plan would require a 10-percent to 12-percent payroll tax and a doubling of the income tax.
“If I were running for office, I would be hesitant to want to run out and promote that as something I wanted to bring about,” Wennberg said.
Spaulding said the decision to cease work on the financing plan was made by a team of administration officials who determined that it made no sense to pursue a tax plan that lawmakers wouldn’t be asked to approve until 2015.
“They had even reserved some software they stopped using when we told them ‘stop and don’t develop a plan,’” Spaulding said.
Wennberg said it was odd that they would have waited until late November to make that call, given that high-ranking administration officials had conceded as early as last June that developments in Washington, D.C., would delay Vermont’s transition to single-payer until 2017.
While the $300,000 contract with UMass called not only for a financing plan but an analysis of how that plan would impact the Vermont economy, Spaulding said the institution “provided more value than the contract was worth.”
As for the $15,000 invoice for development of work on the “financing options,” Lunge said that work is evident in the report. She said UMass had to devote significant resources to establishing baseline information about how Vermont currently pays for its annual $5 billion health care system.
“(UMass) knows nothing about the Vermont tax system, and that’s going to cost them some time and money to figure out,” Lunge said. “I think people underestimate the kind of background work that has to go into this kind of report.”
Spaulding said UMass also produced a detailed analysis of what Vermont could expect to see in federal revenues in 2017, information critical to any financing plan.
Two invoices produced in the records request indicate that the administration told UMass to stop work on the financing plans long before they were anywhere near completion.
An October invoice directs UMass to make sure that the cost of developing a financing option not exceed $65,742. The November invoice says costs shall not exceed $15,922. That suggests the administration recalled the request before UMass had completed even one-quarter of the financing analysis.
Wennberg said he’s submitted another public records request aimed at unearthing the financing plan he believes is hidden somewhere either at UMass or the governor’s office.