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Vermont residents spend less on health care, but clouds are looming


In Vermont, a state with ambitions for universal health care by 2017, privately insured patients spent less time hospitalized and used more generic drugs than the average U.S. patient during the five years leading up to and including the year when health reform passed nationally and in Vermont, a report said.

As a result, Vermont spent less on health care per person than the national average during those five years, even as the state's medical bills grew faster than elsewhere, according to the report by the Health Care Cost Institute, a research nonprofit that analyzed Vermont health spending for roughly 300,000 residents with health benefits from an employer.

If the state's spending increases continue to outpace national averages, its spending picture could look less rosy in coming years, however.

The institute compared spending data collected by Vermont with spending from nearly 6 million national medical claims from Aetna Inc., Humana Inc., Kaiser Permanente and UnitedHealthcare. Vermont's spending data included medical bills for roughly nine out of 10 residents with insurance from an employer. Vermont health policymakers commissioned the report to get a handle on state spending for future state policy discussions.

“This is important to our work in Vermont because we need solid comparative data to track the impacts of changes and to gain a deeper understanding of how factors such as health status, age, prices and availability of services influence trends in spending,” Dian Kahn, director of analysis and data management for the Vermont Green Mountain Care Board, said in a written statement. The board regulates Vermont insurance rates and hospital budgets. Ms. Kahn declined an interview request to discuss the findings in more detail.

Despite the positive news on per capita spending, Vermont's health spending accelerated faster than the national average during the five years, even during the recession. During the first full year of the Great Recession in 2008, Vermont's health spending per person increased 6.9% compared with 5.7% nationally.

If Vermont's spending growth continues to outpace national spending growth, “they're going to start to catch up with national spending,” said Carolina Herrera, director of research at HCCI. “The gap is starting to narrow.”

Nonetheless, spending per person remains below the U.S. average and that of the state's Northeast neighbors, Ms. Herrera said. Vermont spent $112 less per person on health care in 2011 than the U.S. average, in part because of shorter hospital stays. Patients in Vermont are more likely to visit the hospital, but they were quicker to leave. Hospital spending per person in Vermont was $282 less in 2011 than the U.S. average.

Vermont residents, too, spent less of their own money on deductibles and copayments than the average American patient. Spending by Vermont residents from their own pockets, which totaled $595 a person in 2011, accounted for 13% of their total medical bill compared with 16.3% nationally, which amounted to $733 a person, on average.

Notably, patients in Vermont were more likely to get laboratory, radiology and imaging tests done at the hospital than at less-costly physician offices. Prices for hospital laboratory, radiation and imaging services were $25 higher but, more significantly, Vermont patients had 2.6 more hospital-outpatient bills per person than the national average.

Melanie Evans writes for Modern Healthcare, a sister publication of Business Insurance.