A single-payer health care system would likely save money in the first few years of implementation, but over time costs would likely outstrip revenues, according to Steve Klein, director of the Vermont Joint Fiscal Office. ADD IN: Klein prefaced his remarks by saying that costs for the existing private health care system would grow at an even faster rate.
The House Health Care Committee asked Klein to evaluate the financial implications of the Hsaio single-payer report on Thursday.
“The good news is, if we take on this whole system … in the first two years we’ll see cost savings,” Klein said.
The bad news? Klein said in countries that use single-payer systems, the long-term, economic trends show an underlying financial dynamic in which health care costs “rise faster than revenues.”
Klein also warned that building a system will entail making difficult choices regarding benefit levels and revenue sources for the system. On the federal level, he anticipates there will be fewer resources available.
“It’s not going to be a pretty picture,” Klein said.
He advised the committee to adopt legislation that would create an independent governing and oversight board, along the lines of what Hsiao and Gov. Peter Shumlin recommend. Lawmakers, in his view, should not be making decisions, for example, about how much providers should be paid or what the health care benefits should look like.
“The success (of the system) is going to depend on how much autonomy you give this body,” Klein said.
The three main issues the board will need to grapple with include estimating the price tag for the system, creating benefits packages and figuring out a system for payments to providers.
“Every time I take one of those issues off the table, the others move around,” Klein said. “An independent board would play with all three and develop a comprehensive plan.”
The Legislature’s role, in this scenario, would be to provide oversight and to appropriate the money for the system. Klein suggested that lawmakers set the goals, outcomes and performance measures that would enable them to hold the board accountable.
“You want to give the board autonomy, and get yourself out of the direct negotiations,” Klein said.
Last week, when Hsiao presented the final draft of his report to the Legislature, he also advised that lawmakers try to depoliticize the board as much as possible.
Klein told the committee that he has concerns about the information technology that will serve as the underpinnings of the single-payer system. He outlined the four streams of IT data — clinical records, the financial payment system, eligibility and monitoring reports — that will require integration. The timing of the creation of all four streams is crucial, he said. It’s an area, Klein said, where “we need a lot more work.”
McCormack joins with Progs on tax-the-rich plan
While most middle-class people are losing ground economically, the wealthiest Vermonters have seen their incomes grow, according to information from the Vermont Blue Ribbon Tax Structure Commission. On average, the well-heeled have seen a 7 percent average increase in personal income per year. Since 2002, people who make more than $200,000 per year have seen a 50 percent increase in their incomes, according to the report.
Rep. Chris Pearson, D-Burlington, cited statistics from the commission’s report as part of a pitch to the Legislature to consider raising taxes slightly on Vermont residents who fall in the top two tax brackets.
The top 5 percent of income earners in the state will save $190 million this year in federal income taxes as a result of the extension of the Bush tax cuts.
“Vermonters agree with the congressional delegation that the wealthy can pay more,” Pearson contended.
Pearson’s proposal is a 1.5 percent increase in the marginal rate for those in the highest tier, and a 1 percent increase for the next-to-highest tier.
Sen. Dick McCormack, D-Windsor, said asking the rich to pay more is part of the social contract. “It’s how we maintain a civil society,” McCormack said. “This is not eat the rich. You go where the money is.”
Under the proposal, the effective rate for people in the top tier would be 0.9 percent. On average Vermonters who fall in that bracket would pay about $10,000 more in taxes. The Bush tax cuts save $150,000 a year on average for the wealthy.
The bill, which will be introduced very soon, has 16 sponsors, according to Pearson. It would raise $17 million.
The governor and legislative leadership haven’t signaled support for the bill. “There is a growing realization that something has to give,” Pearson said.
Sen. Anthony Pollina, D-Washington, said the governor has been using “scare tactics” about the number of people who might move out of state if the income tax increases.
When asked if he felt like a turncoat to his party, McCormack said he supported Shumlin in the campaign, but lawmakers have an obligation to speak their own minds.
“We have three branches of government,” McCormack said. “This is not (an act of) disloyalty to the governor.”
Public Assets Institute, a nonprofit research organization in Montpelier, issued the following statement: “Vermont cannot continue to cut its way out of its budget problems. The Legislature needs to include new revenue as part of a balanced approach to balancing the budget.”
“We also hope,” the statement said, “the Legislature will follow through on the recommendations of the Blue Ribbon Tax Structure Commission. The commission proposed some sensible changes to the income tax, which should make it easier to understand. However, the rates recommended by the commission need to be adjusted to make sure the income tax, which is our fairest tax, continues to generate at least as much money as it does now.”
Mothers call for ban on toxic chemicals
A group of mothers, grandmothers and small children converged on the Cedar Creek Room in the Statehouse on Thursday to call on lawmakers to ban toxic cleaning products in schools. They cited scientific studies that show a correlation between the cleaning chemicals and a host of health problems, including asthma, cancer, developmental disorders and hormone disruption.
According to the Toxics Action Center, there are 80,000 chemicals in everyday products that have not been tested for safety to human health.
TAC was one of the six environmental and children’s groups sponsoring the press conference.
Maine and Washington have banned the sale of chemicals from common products, according to the center.
Bill H.349, recently introduced in the House, would ban the use of non eco-friendly cleaning products in schools.
Permalink |
We’re now into the seed corn, boys and girls. This is what happens when you run out of other people’s money.
A society cannot consume and not produce.
Montpelier plans and God, among others, laughs.
Permalink |
“A society cannot consume and not produce.”
Many of us said exactly that when NAFTA was debated.
I wonder how you feel about “free” trade and the loss of millions of manufacturing jobs? Or is that Montpelier’s fault as well?
Permalink |
The chicken little screed continues.
Please provide examples of the loss of millions of manufacturing jobs due to NAFTA.
Permalink |
The U.S. Dept. of Labor has been administering the Trade Adjustment Assistance Act for decades. It doesn’t accomplish much but it does track jobs lost from foreign competition (and is quite conservative about it frankly).
The latest data I have shows that from 1998 to 2007, the U.S. lost 1,465,044 jobs attributable to foreign competition (not all NAFTA; much to China of course).
Jobs have been lost in every single state, including those with no income taxes (imagine that!). Indeed, while VT is reported to have lost 3,171 during that period, New Hampshire (our no-tax business friendly neighbor) lost 8,309.
Hey, I just found the FY10 data. An additional 282,000 workers were certified last year nationwide (including another 375 in VT). You gotta love “free” trade.
Oh yeah, here are some fun figures. In 1992, the U.S. had a $5.4 billion positive trade balance with Mexico. In 2010, we had a $66.3 billion trade deficit with Mexico (Census Bureau, foreign trade stats).
Permalink
Mr. Hoffer,
The drawbacks you note about free trade don’t detract from the fact that it is overall a huge benefit to the US, whether NAFTA, preferred trading status, or any other mechanism that reduces trade barriers.
It is inevitable that with any innovation or new arrangement in our economy, jobs will be lost. The question is not whether this alone is bad, but whether on balance the benefits outweigh the costs. Global trade with nations that produce goods at less cost than we can produce them means that products wanted and needed by Americans are more affordable, which is especially significant to people with limited resources. To suggest that this benefit is outweighed by the jobs lost to globalized trade is to suggest that everyone in the country must subsidize redundant jobs by paying higher prices for their goods and services, thereby raising prices beyond the reach of even more people with lower incomes.
And when it comes to the trade balances, that’s hardly a measure that should send us into a panic. Here’s a quote from a CATO Institute paper that illustrates the point well:
“The example of the iPhone production and supply chain … reveals the absurdity of hand wringing over trade deficits. The alleged U.S. high-tech trade deficit with China is simply a function of antiquated trade flow accounting that has failed to keep up with the reality of globalization. Even though each iPhone imported from China registers as a $179 import (the full cost of its production), only $6.50 of that amount represents the cost of Chinese inputs. The bottom line is that each iPhone imported from China supports U.S. employment up and down the supply chain, from Apple’s designers and engineers to independent component manufacturers to logistics providers, truckers, port workers, and retail employees. And misguided policies designed to ‘fix’ the trade deficit would imperil this wealth-creating process.”
Permalink |
H.64- Reversing spiraling health care costs- Not just slowing down increase
Steve Klein is correct. Our current thinking does not address rising disease, the underlying cause of rising costs.
Passing Vermont House Bill H.64 is one thing that we can do today that will start us on the path of actually reversing the upward spiral of health care costs, not just slowing down how fast health care costs rise. A side benefit will be healthier Vermonters.
H.64 addresses rising ill health and chronic disease, the underlying causes of rising cost. This one sentence bill requires health insurance to fully cover evidence-based prevention-oriented services and programs that also reduce medical costs. This includes Complementary and Alternative Medicine services that reverse disease or prevent disease from arising in the first place. There is a substantial and growing body of research on the effectiveness of Chiropractic care, Acupuncture and the Transcendental Meditation program.
Current law requires a diagnosis. If a disease is prevented there can be no diagnosis. Anything that prevents disease is therefore excluded from coverage by insurance to the detriment of Vermonters health.
To read the bill: “How to pay for single-payer? —With savings from prevention—Vermont House bill H.64” (http://tnyurl.com/PreventionSavings)
This piece is posted on my blog http://tinyurl.com/H64ReverseCostRise
Thomas Hall
Professor Thomas Hall, ret
Founder
Vermont Vedic Health
161 Austin Dr. 38
Burlington, VT 05401
BSEE Electrical Engineering
MS Nutrition and Biochemistry
802-999-1651
ThomasHall@alum.mit.edu
http://www.VermontVedicHealth.org
You might find these web sites interesting, as I do
http://www.TM.org
http://www.MUM.edu
http://www.DoctorsOnTM.org
http://www.DavidLynchFoundation.org
Permalink |
Requiring health insurance plans to cover Transcendental Meditation is a very questionable idea. Following this logic, plans should pay for yoga, pilates, gym memberships and decaffeinated green tea.
Permalink |
Legislators have to be very careful about this category of ‘well-heeled’ taxpayers. Many of these high-end returns are in fact corporate profits taxed to individual owners of Subchapter ‘S’ and LLC corporations. The owners typically withdraw enought to pay the tax, and the balance remains in the corporation to fuel growth and expansion (i.e.job creation). Messing around with these tax rates will be another stab ot the goose that lays the Golden Egg!
Permalink |
Pat
What do you say in response to those who ask why the wealthiest Vermonters shouldn’t contribute to the solution of this problem? And how can we portray a modest increase as unreasonable in light of the huge savings from the reauthorization of the Bush tax cuts?
Finally, I agree that some in this income class are small business owners who are creating jobs. But what of the others whose investments are outside Vermont (and the U.S.)? Why should they be held harmless?
Permalink |
Steve Klein says, “A single-payer health care system would likely save money in the first few years of implementation, but over time costs would likely outstrip revenues.” He leaves the impression that the exponential increases in health care costs are unique to single payer systems. Not so.
As most people can tell you, costs under our private insurance, multipayer, if-you-can’t-afford-them-too-bad-for-you system are rising much faster than general inflation. The reason that there is not a spread between revenues and costs is that insurance premiums and out-of-pocket expenses are jacked up to pay the costs. If you can’t afford it you can do without.
However, under a single payer system, there is an opportunity to remove the existing waste from the system and to fund things that work. There is a reason that our health care costs are more than double the next most expensive country’s while signally failing to provide health care to all our people.
Permalink |
Steve Klein says, “A single-payer health care system would likely save money in the first few years of implementation, but over time costs would likely outstrip revenues.” He leaves the impression that the exponential increases in health care costs are unique to single payer systems. Not so.
As most people can tell you, costs under our private insurance, multipayer, if-you-can’t-afford-them-too-bad-for-you system are rising much faster than general inflation. The reason that there is not a spread between revenues and costs is that insurance premiums and out-of-pocket expenses are jacked up to pay the costs. If you can’t afford it you can do without.
However, under a single payer system, there is an opportunity to remove waste from the system and to fund things that work. There is a reason that our health care costs are more than double the next most expensive country’s while signally failing to provide health care to all our people. The decisions about how to finance the system and what services to cover are made democratically, not by an unaccountable insurance corporation.
Permalink |
Ms. Power,
Your statement, “The decisions about how to finance the system and what services to cover are made democratically, not by an unaccountable insurance corporation,” is not correct. The decisions are actually going to be made by an unelected board, *specifically* so that the decisions are not subject to political pressure; in other words, so that they are removed from the passions of the electorate.
Second, the fact that insurance corporations are unaccountable is only possible because the Vermont legislature has made them so. Vermont law requires 30+ medical procedures that MUST be included in every single health insurance policy in the state, whether or not we feel it’s something we’d need; requires that premium increases are approved by the state; and requires that insurance companies issue policies to people who wait until they’re sick to purchase them, regardless of the cost they will impose on the rest of us.
If, on the other hand, we were able to purchase health insurance from any insurance provider in the nation (without all the mandated coverage), we could get just what we want, at the price we want, and if we weren’t satisfied, we could shop around and change providers. THAT would be accountability, but Vermont law forbids it.
Permalink |
Why not target for healthy taxation the entire $190 windfall the wealthiest 5% have had fall into their laps. The term ‘windfall’ tells the whole story – money unearned. And, why is money earned by the stock market crap – shoot, capital gains, taxed less than money earned as a supermarket check out clerk or truck driver etc. etc. Nationally, a 2% sales tax on all financial transactions such as buying bonds or stocks, would go a long way to solving our economic problems. And let’s, once and for all, kill the myth that if we ‘soak-the-rich’ (make them shoulder a fair burden of taxes to keep our social safety net going) they’ll take the ball home and not play anymore. As for the creation of jobs when the wealthy invest – that’s more cowflop. It may have been true fifty years ago when ninety cents of every investment dollar went toward financing new factories and innovative businesses, but today that statistic has been turned on its head – with the ‘financialization’ of our economy only ten cents of every dollar is productively invested. (see David Cay Johnson) We don’t make things anymore – China at forty cents an hour makes them! It’s time for Vermont legislators to stop running scared and make the top income bracket ante up and do the patriotic thing by keeping the social safety net well secured. And, by the way, fifty years ago the top rate was 85% and we had the greatest economic expansion in our history. Nick Caraway in “The Great Gatsby” put it best: “The rich break things and then retreat into their money, into their vast carelessness and let others clean up the mess!”
Permalink |
Ann Galloway,
I am somewhat surprised you do not take up the issue of having ALL Vermonters in the single payer system. It would create the greatest savings.
A single payer system must include all people on a government payroll; state, county and town.
That way all Vermonters have the same plans and the same services.
That would be democracy and fairness. All treated equally before the law.
It would be the lowest cost way to go, least complex and the easiest to administer, AND create the greatest savings. That is the way it is done in Europe. I lived there for 28 years.
No big host of people would be required to administer it.
Medicaid and Medicare have the lowest percent of administrative costs per dollar of benefit; much lower than HMOs where top managements have multimillion dollar salaries.
I look forward to your comments.
Best Regards,
Willem
PS. Typing in those awful to make out words is a pain in …..
Permalink |
McCormack does not want to cut programs, but he does want to reduce the capital pool that creates jobs in Vermont so he can pay for programs and the state workers that run them.
Does he not know that the top 5% of households spend 37% of all personal income which fuels the economy of Vermont?
Many of these programs were set up during good economic times; those times are gone forever.
McCormack also wants the state to lose millions of dollars per year by closing Vermont Yankee, a low-cost, CO2-free, steady, 24/7/365 power producer and use huge subsidies to attract billions of dollars for building renewables that, per invested dollar,
- produce just a little of variable, intermittent power,
- remove just a little CO2 and
- create only a few permanent jobs
and will make Vermont less efficient at exactly the time is must become more efficient.
http://theenergycollective.com/willem-post/46252/thermal-solar-california-desert
http://theenergycollective.com/willem-post/46824/impact-csp-and-pv-solar-feed-tariffs-spain
http://theenergycollective.com/willem-post/46142/impact-pv-solar-feed-tariffs-germany
http://theenergycollective.com/willem-post/46652/reducing-energy-use-houses
http://theenergycollective.com/willem-post/47519/base-power-alternatives-replace-base-loaded-coal-plants
http://theenergycollective.com/willem-post/46977/impacts-variable-intermittent-power-grids
http://theenergycollective.com/willem-post/50167/impact-pv-solar-peak-electric-demands
http://theenergycollective.com/willem-post/50925/electric-vehicle-hoopla
http://theenergycollective.com/willem-post/51642/dutch-renewables-about-face-towards-nuclear
http://theenergycollective.com/willem-post/52228/impact-closing-vermont-yankee-nuclear-plant
Permalink |
Mr. Post
I’m afraid you need to rethink your position.
You said “that the top 5% of households spend 37% of all personal income which fuels the economy of Vermont.”
The top 5% has great wealth and considerable income. But there is absolutely no evidence that they spend significant funds in Vermont. Based on the available data, the vast majority of their investments are NOT in Vermont and, therefore, are not contributing to the Vermont economy.
If you have data to the contrary, please provide it.
Permalink |
Doug,
Regarding personal income: US households have about $11 billion in personal income, 37% of that is spent by the top 5% of households. The top 5% of households in Vermont probably spend most of their personal income in Vermont, if they live year-round in Vermont.
Regarding wealth: The top 5% of households have wealth.
Some of it is “invested” in personal items such as houses, cars, furnishings, clothes, jewelry, etc.
Some of it is invested in financial items such as stocks and bonds
Some of it is invested in businesses they own directly, as for example Shumlin who has a personal income of about $1 million per year and a net worth of $10 million, mostly in real estate (his released figures during the campaign).
His investments in real estate help people have a roof over their heads, etc.
Similar investments by other people have other beneficial effects.
Taxing the people who make such investments and then use the funds to keep some government programs going and some state workers employed is unwise.
It would be much better to tax items that harm people, such as sugared drinks, tobacco, hard liquor, high-speed, gas-guzzling power boats, etc.
Permalink |
I asked for evidence.
You offered assumptions unsupported by facts (as if they are received wisdom).
This is exactly how this debate has proceeded for decades.
Permalink |
Mr. Hall,
The fact that you advocate passage of a law that would personally benefit you (or at least appears it would, based on your reply) is a good illustration of why an interventionist, activist government is often to the public’s detriment. The fact that the State of Vermont will soon define medical care for the purposes of payment means there is and will continue to be a rush of the self-interested toward the Statehouse to make sure *their* business won’t be left out when the taxpayer-funded trough is filled. In effect, this means that folks like you – and others who can expect more business based on government fiat – have only to influence legislators and/or rule-writers, who are conveniently all gathered in one place, rather than convincing the public of the benefits of a particular healthcare approach.
I, for one, am a big believer in alternative healthcare approaches, as they are often FAR more cost-effective (and less traumatic) than conventional medicine. However, asking the government to codify that preference for hundreds of thousands of other people – and making them pay for it – by advocating passage of a law to that effect is, in my opinion, wrong… just as wrong as the legislature’s push to centrally “manage” the millions of transactions each year – and the personal preferences that drive them – in our healthcare system.