The Kaiser Papers A Public Service Web SiteIn Copyright Since September 11, 2000
This web site is in no manner affiliated with any Kaiser entity and the for profit Permanente
Permission is granted to mirror this web site -
Please acknowledge where the material was obtained.


vermont news articles about kaiser
Why is health care so costly?
Burlington Free Press (VT)
June 25, 1999
Author: Staff

Kaiser's departure ought to lead lawmakers to focus less on new mandates and more on lower rates.

Shed no tears for Kaiser Permanente. This company's attempt to dominate managed care in Vermont did not succeed, and its departure should be a surprise to no one.

Two questions remain: Will Kaiser's customers be cared for properly after the company leaves Jan. 1? And are Vermont policymakers doing all they can to keep health care affordable?

The answers are probably, and no.

Kaiser is leaving not just Vermont, but all of New England 100,000 customers here are a small piece of the puzzle. That said, Kaiser lost millions of dollars in Vermont and was gaining a reputation for less-than-perfect customer service. In a competitive world, those are the companies that do not and should not survive.

Kaiser's members have several places to turn for managed care coverage, and the company is handling its departure honorably. Meanwhile, the HMO's doctors, nurses and other providers will remain, in the Permanente Medical Group that will serve a good variety of insurers.

Questions remain about whether state-funded customers of Kaiser have as stable a future. But recipients of Medicaid, Dr. Dynasaur and the Vermont Health Access Plan might find comfort in the Human Services Agency's work to create a state-run HMO to replace Kaiser.

More broadly, Kaiser's departure raises the issue of why health care in Vermont is so expensive. Here are some factors:

A People's health. Vermonters have been using lots of medical care recently, which drives up rates. Popular new medicines and treatments also increase costs, but most people would agree that better health is worth the expense.

A The delivery system. Vermont relies heavily on community hospitals. Closing them would lower costs, but few people would support that drastic action.

A The largest customer. Government buys the most health care, through Medicaid and Medicare. But government only pays part of the bill the unpaid portion is added to the bills of insured people. Vermont ought to study which is a better way to reduce the number of uninsured people state programs or lower rates.

A Mandates. Lawmakers have increasingly required specific kinds of coverage, with mixed justification. Vermont was right to lead the nation in mandating fair treatment of mental illness, for example. However, this state has also mandated chiropractic and other care without weighing the resulting cost. New mandates loom on the horizon, too.

A The insurance system. Vermont's 1993 attempt to create fairer insurance remains half-finished. Some companies are still cherry-picking low-risk customers, which raises the risk for other insurers.

Moreover, more businesses are choosing to insure themselves. They, too, increase the risk remaining customers bear, thereby raising their costs.

What does it all add up to? Some of the reasons Vermont's health care is expensive are desirable. But others are the direct result of unwise government decisions. Kaiser's departure decreases the health system's stability, and that ought to lead lawmakers to focus less on new mandates and more on lower costs.
Section:  Opinion; Editorial
Page:  14A
Copyright (c) The Burlington Free Press. All rights reserved.