Editor’s note: This op-ed is by John McClaughry, vice president of the Ethan Allen Institute, www.ethanallen.org.
Arnold Schwarzenegger’s nemesis in Terminator II: Judgment Day is a humanoid robot called T-1000, sent back from the future to destroy the human destined to overthrow robot rule. Every time Arnold knocks the stuffing out of T-1000, it reassembles from a pool of shiny liquid metal into the original menace.
The T-1000 of Vermont politics is single payer health care. From 1990 to the present, liberal legislators have voted millions of dollars for study and design projects to bring the wonders of single payer health care to the people of Vermont.
Under a single payer system, health insurers and premiums become history. The government rationally organizes all of the fragmented, uncoordinated health care providers and invites all Vermonters to partake of their services at little or no cost.
Of course, not everyone can partake of everything he or she desires, since after all money is not unlimited.
Of course, not everyone can partake of everything he or she desires, since after all money is not unlimited. Thus the government’s global budget provides only such medical care as the government decides people need, in quantities the government can afford to pay for. This is, however, not arbitrary. A board of appointed and unaccountable experts decides what sorts of patients will get what care and for how long. That’s reassuring.
Employers and individuals are relieved of the expense of premiums or deductibles. That’s a big plus. But $5 billion has to come from somewhere, and the single payer folks have a ready answer: taxes. The most common choice is, curiously, the payroll tax, which liberals regularly denounce because it’s not progressive. Four years ago a legislative study chose a payroll tax of 13.5% – 3.4% paid by employees, 10.1% by employers, and 13.5% by the self-employed.
Single payer advocates – notably Sen. Peter Shumlin – argue that the paperwork and profit savings from abolishing insurance companies would save 5% of health care costs, or $260 million.
The government’s global budget also determines what compensation all of the doctors, dentists, nurses, hospitals and nursing homes will receive. Rather than raise taxes, the megasystem continually cuts compensation to the medical providers, who are forced to reduce quality and increase waiting times in the hope that costly patients will go away.
Since doctors are dropping out of Medicare because it increasingly underpays them, the single payer system will necessarily require them to participate for what the government is willing to pay them. Of course, unlike hospitals facing the same problem, they can always move out of state.
The government bureaucrats allocate the available tax dollars over less expensive services for as many people as possible, to keep political support for the system, but shortchange, sometimes fatally, a small number of high-cost patients.
There is vast experience with such megasystems, including Medicare in this country. What happens is that the government bureaucrats allocate the available tax dollars over less expensive services for as many people as possible, to keep political support for the system, but shortchange, sometimes fatally, a small number of high-cost patients.
Sen. Shumlin says that by installing a tax-financed single payer plan “we would unleash the largest economic development program in our state’s history.” He says that businesses would find this “an enormous incentive to set up shop in a state that is truly and uniquely business-friendly.” If that’s true, you have to wonder why the more business-friendly states – that is, almost all of them – haven’t acted upon this brilliant – perhaps fantastic – insight.
Vermont’s Hogan Commission of 2001 put its collective finger on the central problem of health care financing today: “There is a disconnect between the consumer receiving health care and the entity paying the bill…Third party payment tends to shield consumers and provider from understanding the cost consequences of their behavior and of the health and medical choices they make.”
Add to that insight these three: people need to take personal responsibility for their own health instead of looking to a government megasystem to dispense benefits; health care would be much less of a problem if government hadn’t spent a hundred years tampering with it; and as Barack Obama notably said, “consumers do better when there is choice and competition”.
That would define a very useful starting point for reshaping Vermont’s health care policies. Unfortunately the majority of legislators in this state are intoxicated with the supposed wonders of a politically controlled megasystem, allocating, budgeting, regulating, mandating, prohibiting and not least, taxing. Let’s hope the next crop in the state house has more sense.
