Health Care

The single-payer framework: An analysis of the opponents’ arguments

StockXchng image of stethoscope and calculator.
StockXchng image.

Editor’s note: This is the third in a three-part analysis of the Shumlin administration’s plans for a single-payer health care system.

When we looked at Democratic Gov. Peter Shumlin’s health reform initiative on its second birthday, it seemed to be pretty much on track. The Legislature has established the health insurance exchange and has set up the government machinery to manage the delivery and payment system statewide.

We’ve also seen, however, that two of the toughest jobs — integrating the doctors and hospitals who provide the care and devising a different way to pay them — are under way, but by no means solved. The toughest nut of all, building a tax system to pay for it, is scarcely on the horizon.

Given this reality, it is worth looking at the public reaction to health care reform proposals. In a poll conducted by Castleton Polling Institute for WCAX, WDEV and Vermont Business Magazine, 48 percent supported the idea of a publicly financed health care system. Thirty-six percent of the 600 Vermonters polled said they opposed a single-payer plan. A survey taken earlier this year by the Shumlin administration showed that 75 percent of Vermonters would be interested in learning about the health insurance exchange that is scheduled to begin in 2014.

In addition, reform proposals in 2011 and 2012 were supported by large margins in both the Vermont House and Senate, which have Democratic majorities.

The initial positive public response, however, could be somewhat deceptive. The first major health reform effort in Vermont, in 1995, had at least as much support in the Legislature, but foundered in the end because both legislators and the public fled from the complexities of raising the money.

This time around, opponents have been working to undercut the effort from the beginning. Who are they, and what kind of a case do they make? And how valid is it?

The two focal points for the opposition so far are the web and the media, along with the halls of the Legislature.

Sen. Randy Brock submitted his petition to get on the ballot as a gubernatorial candidate. VTD Photo/Taylor Dobbs
Sen. Randy Brock submitted his petition to get on the ballot as a gubernatorial candidate. VTD Photo/Taylor Dobbs

The most common complaint is that Shumlin pushed the completion date for the financing structure for single payer out past November of this year, when he will be up for re-election. That is a violation of the principle of transparency, many have said. State Sen. Randy Brock, the Franklin County Republican who will challenge Shumlin this fall, pushed a bill in the last legislative session to force the governor to move the disclosure date to September. The provision failed.

The Shumlin administration argued that it made sense to start with the exchange since implementing single payer would lie some years down the road, but there was obvious political value in putting off the most difficult financing questions until after November.

Brock’s apparent intent is to make the gubernatorial election a referendum on single payer health care reform as he has used the issue as a cornerstone of his campaign.

At its core, the argument to cast health care reform as a bad idea seems to be that if the government does it, it must be bad. It is an attack on “freedom.” Support for single payer is a “social experiment” and an unhealthy desire for “free care.” This note was sounded regularly on the website Vermont Tiger.

It would seem that the two sides are at impasse, but on one point, opponents of single payer and proponents agree: The current system is not sustainable.

The United States spent 6.6 percent of its gross national product in 1966, the year Congress enacted Medicare and Medicaid for the elderly and the poor. The national figure is now around 18 percent. Health care expenditures in Vermont are 20 percent of total state spending.

Getting the inflation rate in health care costs down near the underlying rate of inflation would be an accomplishment of historic proportions, and hideously difficult.

The lowdown on costs

William Hsiao

It is difficult to follow the debate on the costs and financial benefits without understanding a key fact that underlies the discussion. The report by professor William Hsiao, which was the starting point for the reform process in Vermont, is a dead letter.

Hsiao designed a complete single-payer system whose centerpiece was a payroll tax that would provide a major part of the funding for the program. His early estimates in February 2011 showed that the tax would be 12.5 percent in 2015 and 11.6 percent in 2019, including a 3 percent employee contribution.

As soon as the payroll tax proposal surfaced, employers all over the state used it to project their health insurance costs in the future. Some found that their costs would go up, a disturbing development, given that Shumlin repeatedly assured the business community that, at a minimum, they would not get hurt by his reform effort.

The Hsiao plan immediately headed for a back shelf and the Shumlin design team began to build its own system from scratch. That system could include a payroll tax, officials say, but there is no way now to tell what it would be. The only certain thing is that it can’t be the Hsiao number. There was no formal funeral for Hsiao and his report, however. So the payroll tax figures continue to to be cited, as do his calculations on how much the proposed system would save.

One of the most detailed efforts to assess the cost issue so far has been made by Tom Pelham, who held important finance posts in the administrations of Govs. Howard Dean and Jim Douglas. Pelham weighed in on health reform in a Burlington Free Press op-ed piece earlier this spring.

Pelham was one of a minority of critics who acknowledged that the exchange concept in the federal reform program could be highly beneficial. “A robust government regulated health care ‘exchange’ in the mold envisioned by President Barack Obama is a good idea,” he wrote. “Ending health care cost shifts that drive insurance rates is a good idea … global budgets for regional health care oligarchies is also a good idea.”

“…  It is of deep concern that proponents of massive changes to our health care system now acknowledge that the half billion dollar savings in Vermont’s health care cost is not on the horizon and that many businesses will be harmed in the meantime. … If those cornerstone savings are not achievable, should the whole (reform program) be questioned and revisited?”

Tom Pelham

Pelham bases his opposition case on the Hsiao report’s assertion that Vermont could save $500 million in its first year of operation. Shumlin often cites this figure when discussing his reform initiative. Pelham links that to a statement by Steve Kimbell, commissioner of the Department of Financial Regulation, that the costs in the system won’t actually drop, but that the rate of increase will slow. Pelham implies that this disjunction amounts to a bait-and-switch by the governor and that, he argues, threatens the state’s financial integrity and ultimately its favorable bond rating.

“Whatever the cause,” he wrote, “it is of deep concern that proponents of massive changes to our health care system now acknowledge that the half billion dollar savings in Vermont’s health care cost is not on the horizon and that many businesses will be harmed in the meantime.

“If those cornerstone savings are not achievable,” he concludes, “should the whole (reform program) be questioned and revisited?”

There are several issues wrapped up in this argument. One is how you calculate “savings” and what you mean by savings in the first year of operation. The second is whether the core of the Shumlin effort — building a new payment mechanism for providers and restructuring the delivery system — have the potential to contain costs in the future.

On the first question, there seems little question about the benefit of what’s been done so far in the reform effort. The Green Mountain Care Board has ordered hospital budgets to be capped at 3.75 percent increases for the fiscal year beginning in October. The comparable inflation rate for the first decade of the millennium was roughly 10 percent. The percentage difference between the two inflation rates is roughly $125 million.

If 2014 is the first year of operation, you could add to that the federal subsidies that will come through the insurance exchange, estimated by Hsiao at $200 million to $400 million per year.

Health policy experts in the United States have been trying to figure out how to get costs under control since the mid-1970s. They tried everything from rate setting to an alphabet soup of both state and federal mechanisms to get that done. Everyone failed, as evidenced by the steady growth of costs at multiples of underlying inflation. Hospitals in Vermont more than doubled their budgets between 2000 and 2009. Going back to that inflation track would stack hundreds of millions of dollars in new costs on to a state which already pays 20 percent of its gross state product on health care.

Payment reform and system restructuring are the keys to cost containment. John Brumsted of Fletcher Allen Health Care, Paul Harrington of the Vermont State Medical Society, Betsy Bishop of the Vermont Chamber of Commerce, the spokespeople for Vermont Blue Cross and Blue Shield and MVP — all have strongly endorsed these twin goals.

Abandoning that effort now would leave Vermont with no credible options once the economy reignites and the subsidies from the exchange (a federal, not state reform element) feeds tens of thousands of new patients into the system.

The exchange and the exclusivity question

Perhaps the most vocal critic of the exclusivity feature of the exchange is Jeffrey Wennberg, the executive director of Vermonters for Health Care Freedom, an advocacy group opposed to single payer. In a piece in the Burlington Free Press, he argued that the ban on small group insurance outside the exchange ran counter to what the rest of the country is doing and is contrary to federal law.

Federal law, he wrote, “requires the creation of exchanges and every other state in the nation is making theirs voluntary. Indeed, the (federal law) appears to require the continued existence of off-Exchange plans …”

The National Conference of State Legislatures says that as of May, 12 states have established exchanges. Of those, all but Vermont have permitted sales outside the exchange. The other 38 have taken no action yet.

As for the claim that closed exchanges are banned by federal law, Clifford Peterson, general counsel for the Department of Financial Regulation, said that the Vermont version does not contravene federal law. “Mr. Wennberg is misreading (the law),” he said.

Robin Lunge, director of health care reform for the Shumlin administration, said that at a conference among state and federal officials, state Sen. Vincent Illuzzi asked about closed exchanges and was told that issue was up to the states.

The Wilton model

A different tack is the claim by Wendy Wilton, Rutland city treasurer and the Republican candidate for state treasurer, that the Shumlin single-payer plan would increase costs so much that it would bankrupt the state. She based this conclusion on a model she built, using a payroll tax of 14 percent and applying it to the budget in 2014. She also adopted an average annual inflation rate of 7.5 percent from 2014 to 2018.

Rutland City Treasurer Wendy Wilton addressed supporters at the launch of her campaign for state treasurer. VTD Photo/Taylor Dobbs
Rutland City Treasurer Wendy Wilton addressed supporters at the launch of her campaign for state treasurer. VTD Photo/Taylor Dobbs

Her model shows a hospital budget of $2.852 billion in 2014 rising to $3.54 billion, on average. If the output of her model were accurate, the Shumlin reform initiative would fall of its own financial weight.

The problem is her underlying assumptions are faulty.

The Shumlin team could design a payroll tax, but there is no chance it could be higher than the Hsiao rates, which were high enough that Shumlin killed them on arrival.

Likewise, Wilton’s inflation rate is much higher than consumer price index projections. The U.S. inflation rate now is about 2.7 percent; Wilton says inflation will be 7.5 percent in the coming years.

Wilton says she is not opposed to reform, that she is in fact in favor of it. “I just want it to be out in the open,” she said. “I have asked people to look at my model and tell me if they disagree with it. Nobody has done it.”

The Shumlin administration has not responded to Wilton’s assertions.

The Wilton model may get much closer attention in the state treasurer campaign, which may also likely become a referendum on single payer.

The role of the associations

An important issue in the exchange is the role of what are known as “associations” — entities like chambers of commerce, labor unions and the like. Associations now can act as middlemen of sorts, assembling groups of small employers and arranging health insurance for the pools formed by their employees. A major contention in the health reform debate has been that forcing all the small group carriers into the exchange would disrupt that pattern and in the process impose unaffordable cost increases onto some employers.

The associations have argued that there are more than cost implications here, that the Shumlin strategy threatens to interfere with the way that many small companies now operate.

One of the proponents of this point of view is Betsy Bishop, president of the Vermont Chamber of Commerce, who has testified on health care reform over the last year or so. The Chamber, she said, supports the major components of Shumlin’s initiative.

“Cost containment should be a major part of the solution …,” she told lawmakers. “These efforts should include the continuation of the Blueprint for Health, payment reform, delivery system reform and the creation of an affordable essential benefit package. I commend you for that focus.”

Bishop did not endorse a single-payer system as the end step for the process, but her major focus was on the operations of the exchange. And she and other advocates had considerable success in gaining modifications to the original Shumlin design for that element.

“There are lots of ramifications. If you increase salaries to make up for the employees share in the exchange, you may have tax and fairness problems. Some employees will qualify for subsidies, but others may not. Do you raise salaries for everybody, or just some? … these issues affect company loyalty and competitiveness.”

Betsy Bishop

The governor and the Legislature agreed to add a less rich level, a “bronze plan” to the original three proposed by the administration. The associations also advocated for multiple carriers in the exchange, which it will now have. In addition, they succeeded in getting lawmakers and the administration to keep the employee limit at 50 instead of 100 in the opening stages of the program.

Bishop and other advocates did not prevail, however, on the exclusivity of the exchange, and Bishop contends that is a mistake that will make life harder in the fall of 2013 for many small employers who now offer insurance to their employees.

She acknowledged that an employer might escape a big cost increase by letting his or her employees go to the exchange as individuals, but that would seriously disrupt the internal dynamics of many companies.

“There are lots of ramifications,” she said. “If you increase salaries to make up for the employees share in the exchange, you may have tax and fairness problems. Some employees will qualify for subsidies, but others may not. Do you raise salaries for everybody, or just some? … these issues affect company loyalty and competitiveness.”

If the exchange apparatus collapses at the national level, Bishop said, then long-term relationships with insurance carriers will have been lost.

There is some merit to this view, but the same carriers that operate in the state now — Vermont Blue Cross and Blue Shield and MVP — will be in the exchange, and if the exchange were to collapse, those insurers wouldn’t leave the state, sources say.

The most important consideration on this issue is the off-setting benefits. One of those is the size of the exchange pool. The more people that are in the pool, the wider the health care costs can be spread, and the larger the number of people in the exchange, the more federal reimbursement that will come to the state.

The high end of the $200 million to $400 million Hsiao estimate adds up to as much as 20 percent of the hospital budgets of some $2 billion this year.

The most far-reaching effect, however, will be the first move to decouple health care costs from employment. People may be skittish about that, but virtually every analysis of the health care cost travails of the United States since World War II traces their origin to the accident of job-connected health care payment. Still, advocates like Bishop and others could be right that some small employers will pay a price for reform. The question is whether it is worth it.

This survey does not cover every argument against the Shumlin initiative. There is no way, for example, to refute the ideological position that government should have no role in health care reform. But the most significant shortcoming in the opponents’ case is that they have offered no credible alternative at a time when costs are spiraling out of control.

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Hamilton E. Davis

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  • 1) Shumlin has ALWAYS put his “savings” comments in the context of (as he puts it) “bending the cost curve”. There has never been anything dishonest or otherwise misleading in this arena – Pelham is simply misstating what has been said many times in many public venues.

    2) The opposition to single payer has never come close to addressing the issue of personal greed (think billions and billions in upper level insurance industry salaries); and because of this the only possible solutions they have that can actually reduce costs have to do with reduction of service … barring, of course, some government funded research that brings down the cost of a procedure or government intervention in medicine patent or the other government intervention that doesn’t affect personal greed.

    3) A favorite idea of the opposition to single payer is this concept of opening up Vermont’s medical insurance market to all comers. Of course they simultaneously want to restrict my access to lawsuits under the guise of tort reform; and they refuse to help pay when a Vermonter needs to sue some out of state business in a far off federal court for failure to live up to a contract.

    4) What we are doing today is going to bankrupt us – or force us to forgo medical treatments. Wilton has part of her argument correct, but she’s pointing at the wrong culprit.

    5) Change is going to be hard, but we have a real choice here: change that we can direct and control to some degree or wait for a disaster and then run around like chickens with their heads freshly removed.

    I’m not a big Shumlin booster, and I sure would like to not vote for him – but if the Republicans want to make this election about his healthcare plan, and I feel a need to take sides – it will be with single payer.

    • Lance Hagen

      One has to ‘chuckle’ at the advocates for a Single Payer Health Plan, when they drag out the salaries of insurance industry executives. What they avoid mentioning about the Health Care Plan industry is that these companies are not ‘racking up’ large profits. Even in the best companies, the net profit margins are only 5 to 6%. So they avoid this data and focus on those ‘greedy’ executives the work for the ‘evil empire’.

      What they try to portray, is once we ‘slay’ these greedy ‘evil doers’, we all will live in the ‘land of milk and honey’ when it comes to health care. And the entire problem is a lot more complex than that. But it is their usual approach, to inflame ‘class warfare’ to achieve their ends.

      • Bob Johnson

        What is it with you Cons and the inane “class warfare” mantra?

        The rich have never been richer, the poor are increasingly poor, companies are “racking up” record breaking profits and sitting on record breaking piles of cash, and you think the solution is to shower the rich in money at the expense of the poor?

        How much misery do we have to inflict on the millions who cannot afford decent access to healthcare? How much richer do the rich have to be?

      • Let’s deal the first fallacy: I talk about massive salaries (which naturally reduce net profits) and Lance would have us believe that equates to company net profits (which naturally are reduced by massive salaries).

        ‘Nuff said.

        • Lance Hagen

          Now let’s see …. According to the link provided by Mr. Carpenter the “10 largest for-profit health insurance companies collected total pay of $228.1 million” in 2009. But for 2011 let’s assume that those ‘greedy’ execs have raised their compensation to $300 million.

          Now, if you looked at the revenues of the top 10 for-profit health insurance companies in 2011 they are at approximately $350 billion ($350,000 million). So exec compensation only represents 0.086% of total revenues. So I have no idea whether this level of compensation is justified, but it surly isn’t as significant in the total health care cost structure as being represented by advocates for a single payer. All advocates are trying to do is create a ‘bogyman’.

          • Which of course doesn’t address what I said – of course that is unless you believe a couple hundred million is mere chickenfeed – and if you’re only going to count the 10 largest and if you’re going to omit all the salaries that feed into our privatized insurance system (“CEO pay jumps 36.5%”, CNN, … to wit “$145 million for John Hammergen of McKesson Corp.” and “$98 million for Joel Gemunder, who retired in July 2010 as CEO of Omnicare”.

            Nope – no greed going here, and besides, even if it is it isn’t in any meaningful number … nothing to see here, move along and kick a poor person instead.

      • walter carpenter

        “So they avoid this data and focus on those ‘greedy’ executives the work for the ‘evil empire’.”

        Please explain how, if a health insurance company is only earning 5-6% profit, that the CEO’s of that same company can bring down millions in salaries and bonuses a year while millions of Americans face higher premiums and even higher deductibles. Please explain how companies that earn 5-6% profit record these kinds of profits:

        And then please explain what right it is that they have to profit like this off of our need for health.

        “they refuse to help pay when a Vermonter needs to sue some out of state business in a far off federal court for failure to live up to a contract.”

        Rama, thanks. I have had to deal with this kind of situation before.

  • Wendy Wilton

    The health care inflation numbers I used came from BISHCA and state reports. Ham Davis is criticizing me for using the assumptions provided by the state.

    According to my recent conversation with Ham, the VT studies and reports on health care that served as the basis for Act 48 are no longer relevant. He said that the state will limit the rate of cost increase in VT’s health care system to about 3.5%, instead of 7.5%, which was their previous assumption.

    Therefore, it appears that sometime between the Hsaio report last year and last week, the Administration figured out that my financial analysis is correct. They concluded that only by imposing reduced hospital budgets can Green Mountain Care be sustained.

    Ham asked me to change the assumptions in my spread sheet to reduce health care inflation to 3.5%, eliminate the Hsaio savings and include the federal tax credit revenues expected though Obamacare, which I did for him. The result? At the end of 5 years the system has a cumulative $1.6 billion deficit versus the $2 billion in my original projection.

    • Kathy Callaghan

      Wendy, what did he say THEN???

      • Wendy Wilton

        He didn’t contact me.

  • David Usher

    Based on Wendy Wilton’s comment about revisiting her financial model with assumptions suggested by Mr. Davis, it seems Vermont is still digging an unaffordable health care hole.

    Can anyone suggest how that hole will be filled without rationing in some form? We know we have rationing within the present health care arrangement in various ways, yet how can we possibly think that rationing will not be integral to any plan that will ‘bend the cost curve?’

    It is folly to believe that magical dollars from Washington where forty cents of every dollar spent is borrowed and added to the unsustainable deficits that feed the massive national debt can be a panacea.

    Health care reform is absolutely needed, but cost control must be the essential element, not the payment mechanism. Efficiencies can be wrung out by various restructuring, but that will not be enough with essentially unlimited demand.

  • paulina conn

    A true and well designed single-payer system has only one health insurer(preferably public so it’s answerable to the people and you don’t have new oversight bureaucracy), one health plan ( the same comprehensive one for everyone), and one negotiator of fees for services and equipment ( the public health plan provider). The savings come from the single, non-profit, completely pre-paid plan with 100% of the population enrolled and the negotiated fees. The freedom comes for the patient by being able to choose any private doctor and getting care when needed. The advantage and savings for the doctor, hospital and other health care professionals come from having only one health plan to deal with and the knowledge that all your services are paid for for all patients with payments that you have negotiated and agreed to. Independent, academic studies by the GAO, CBO, California, Vermont, New York , Maryland, Minnesota, etc. have all shown billions of dollars in savings and high quality care.

    • Bob Johnson

      Well said, and the main reason the for profit healthcare lobby has painted a gigantic bulls eye on the state of Vermont.

  • David Dempsey

    Where will the Federal dollars that Shumlin says will make his plan affordable come from? It will come from the same place that Obama care funds will come from, China. We would be hypocrits if we complain about the countries growing debt while using borrowed money to help fund health care reform in Vermont.

  • Bruce Shields

    The issue is not single-payer vs multiple payers in isolation. The Vermont proposal creates an authoritarian model controlling the insurance side, but with few financial incentives to modify behavior either by providers or by consumers of health care. Costs will continue to rise under H.559.

  • I agree we have to look at the personal responsibility issues of health care – such concepts need to be at the table. However we also need to be able to deal with those influences that encourage or reinforce unhealthy habits.

    Marketing is a primary culprit – think of our history with high tech nicotine delivery systems (aka cigarettes and other tobacco products).

    Marketing, for instance, has massive numbers of people consuming equally massive amounts of high fructose corn syrup laden drinks that help to create our obesity and diabetes problems. The dominance of corporate logos for such as Coca-cola and Pepsi along with their direct association with unhealthy food products is so bad I can’t even begin to remove these logos from our school (I bring the subject up, but nobody so far has been willing to buck the corporate train).

    And we know for a fact that marketing works – this is the reason we have so much time and effort and money directed at it.

    So personal responsibility is definitely a requirement – but we also need social responsibility.

    • Lance Hagen

      Here we go ……… once single payer is in place the ‘food police’ will be out in full force to protect me from myself and keep health cost down. Lucky us.

      • Bob Johnson

        Here we go again, more hysterical fear mongering about how single payer will allow the government to deny us the right to even breath without permission from the state.

        At least try to come up with something more original next time.

      • Paula Schramm

        If single-payer would mean better access to good public health information for more people, to counter the tsunami of advertising washing over our population, that could be a good thing for people’s health. And you could still chug all the high-fructose corn syrup your heart desires !

  • It is misleading to constantly refer to the proposed system, no matter who is proposing what, as “single payer” when in fact it would certainly involve both the federal and state governments, which is not “single”, and in addition probably more than one private insurer. Instead the term “universal coverage” would be a better way of explaining the goal, rather than by refering to the payor or payors as an implicit goal. National companies with their multiple state plans would also comprise more payors.

    Medicare, for instance, is not a single payer system as it involves the federal governemt (CMS), state governments and multiple private companies. The Medicare system offers a less complicated approach. Medicare, which pays 80%, could theoretcically adjust payments to individual income and asset levels by simply decreasing the payment levels to comply with annual tax reporting. Surely the private insurance companies could raise premiums for supplemental coverage to meet their higher costs.

  • paulina conn

    The single-payer is the single trust fund that pays all the health care bills for everyone (because we have all paid in) and into which all health care money is deposited from all sources including the 50% to 60% that currently is paid for by government such as Medicare and Medicaid. With a single risk pool the costs of care are distributed equitably amongst everyone by ability to pay not by harmful discriminatory methods such as age, illness and where you live the way the private health insurance industry calculates premiums. With a single-payer you have the security of being able to access the health care system when you need it because you have prepaid. Currently many people with private insurance fear their health care bills won’t be paid adequately or at all by their insurance company because the policy is unclear or their deductibles are too large. That fear goes away under a single-payer system because your plan is comprehensive for all medically needed care is paid for and clearly explained and equal for everyon.

  • What seems missing from this discussion is the moral dimension. We have a system which bankrupts and kills too many citizens. We have a system perfectly designed to achieve the results we are getting.

    Obamacare is not healthcare reform. It is insurance reform masquerading as healthcare reform. It is a tepid half measure. Comprehensive healthcare reform would not be farmed out to states. We already have a patchwork of state policies.

    We also have rationing. People without health insurance don’t fear rationing – they’re already experiencing it. It’s just us “haves” who fear it.

    One good thing about Vermont’s efforts: at least we’re grappling with the problem. It will be hard to solve in a country where “tax” has become a four letter word.

    Our system of job-connected health insurance deferred many costs into the future. Now those deferred costs are coming home to roost. This debate is about how equitably those costs will be spread across society – or will they become matters of “choice” and “individual responsibility” like too many of our public goods, and fall on those least able to bear the burden?

    Let’s keep in mind here that the status quo is also, by default, a policy.

  • Paula Schramm

    Thank you Steve Owens, for giving the ethical context of this discussion.
    Every other developed country has started with agreement on the ethical obligation to provide access to health care for everybody, and have then organized health care systems to meet that fundamental goal.( They’ve all done it more cheaply and with better over-all health outcomes too.)
    We alone have not made that commitment as a country, although the Affordable Care Act started out with that goal in mind, and was successfully run off track in the end.
    Could it be that making that commitment is a powerful tool to focus on creating a better system ? If so, Vermont is on exactly the right track.

    A comment from personal experience : When everyone has access to health care, they don’t run out and “consume” lots of it. They simply are better able to take good care of their health, and therefore stay healthier .

  • Paul Frascoia

    IMHO the real problem with the single payer direction that VT is taking is simply that it is not financially sustainable. It should be fairly easy to grasp the concept that if you insure more people your net costs go up because more service is doled out. But how do you pay for that? It’s not with savings. By definition it has to be with additional tax revenues. The problem with that is that higher taxes will drive companies and their incremental future investments out of this state. Not everyone is going to leave, and it will be a slow process but on the margin it’s going to hurt and cumulatively it will undermine the economy and the health care system will eventually cave in on itself like it is beginning to do in other socialized health insurance countries.

  • The 2010 legislature brought in the venerated Dr. William Hsaio (replacing the venerated Dr. Kenneth Thorpe)and paid him $300k to explain that installing Option 3 (Green Mountain Care single payer) would produce a sensational first year “savings” of $580 million (later reduced to $500 million when it became obvious that the Democratic legislature, in thrall as usual to plaintiff’s lawyers, tossed Hsaio’s “essential” medical malpractice reforms out the window).
    But now those savings are GONE! Now it’s “Dr. Hsaio is a dead letter.” The Shumlin GMC plan doesn’t generate ANY savings! It just “bends down the health care cost curve”, largely by imposing price controls on providers (especially hospitals).
    This has to be a new record for bait-and-switch in Vermont. For seven years (actually, 20) I have predicted that If single payer is actually implemented, Vermonters will experience some “annoying inconveniences, like rationing, waiting lines, maddening bureaucracies, demoralized doctors and nurses, shabby facilities, obsolete technology, declining quality of care, and of course much higher taxation.” And, I might add, ever more desperate government controls to avoid collapse (cf. MA Gov. Patrick’s demand for insurance price controls to keep Romneycare alive.)
    We are well on our way.