by Andrew Stein July 25, 2013 vtdigger.org An independent consulting firm projects that over the next five years the Vermont and federal governments 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.’
Robin Lunge, director of health care reform for the Shumlin administration. VTD/Alan Panebaker
But Robin Lunge, director of Health Care Reform, says you can’t place a monetary value on the benefits Vermonters will get from these new systems.
‘How do you do a return on investment for consumer experience?’she said. ‘You can’t quantify the consumer experience into dollars and cents â ¦ What we’re striving to do, you can’t put a dollar amount on that.’
Under state statute, the administration is required to ‘obtain independent expert review’ for IT-related activities that total more than $500,000. BerryDunn was brought in to analyze two IT systems: the state’s new health insurance exchange and the Agency of Human Services’’integrated eligibility’ system.
The exchange, called Vermont Health Connect, will become the sole health insurance marketplace in 2014 for Vermonters buying plans individually or via businesses with 50 or fewer employees. Vermont is one of only 17 states implementing its own exchange, and it is set to open Oct. 1. The other IT system will tie together eligibility systems for all human services programs, like three squares food benefits, health insurance subsidies, heating assistance and other programs.
The state’s current eligibility and enrollment system for many of its human services programs is called ACCESS. BerryDunn indicates it is appropriate to replace it, writing, ‘The State’s ACCESS system is built on obsolete software and is not sustainable.’
BerryDunn estimates that by the end of 2018, the state and feds will spend more than $224 million on getting Vermont Health Connect up and running. During that period, the firm also projects the state and feds will spend just shy of $95 million on the new eligibility system and $123 million on staffing and operating expenses for the new systems.
BerryDunn made these calculations based on April data, before the state was awarded $42.7 million in additional federal funding for IT systems. At this point, the feds have given Vermont $168.1 million in grant funding to help launch Vermont’s exchange, and they have vowed provide a 90 percent match for many of the other associated expenses.
‘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.’
At the beginning of 2015, the state is set to spend $18.4 million a year to run the exchange. That will come from state tax dollars. But lower income Vermonters are poised to receive major federal benefits. With the expansion of the state’s Medicaid program ‘from 100 percent to 133 percent of the federal poverty line ‘and with new federal subsidies for income earners below 400 percent of the federal poverty line, the administration expects Vermonters to bring in more than $400 million in federal dollars for health care assistance.
BerryDunn’s independent review also says the state will see ‘significant intangible benefits,’such as providing insurance to an additional 6 percent of Vermonters who are currently uninsured. Lunge says the state expects Vermont’s population to move from being 92-93 percent insured to 96-98 percent insured.
Despite major IT pieces still coming together, and new guidelines for implementing state-run exchanges still spilling out from the federal government, Larson said that he was confident the state would be ready to open the exchange on Oct. 1.
‘We really do believe we’re on track for October,’he said.