[T]here are still a couple of live embers in the banked ashes of Gov. Peter Shumlin’s plan to shift much of the financing for the Vermont health care system from private insurance to the state’s tax system.
The governor abandoned his financing plan in December of last year, but two of the most determined of the supporters of single payer health care reform are still hanging on.
The first effort came from Deb Richter, a Montpelier physician, who proposed earlier this year to use a small payroll tax to provide free primary health care across the system. The second is the proposal put forward yesterday by Peter Sterling, a long-time advocate for progressive health care policies. That proposal is described in Erin Mansfield’s story on VTDigger today.
Both the Richter and Sterling proposals are basically incremental — they fall far short of the all-in-one-shot transfer of some $2.5 billion in health care financing that Shumlin finally walked away from. Moreover, both basically involve studies rather than government action, a bow to the overriding political reality that there is no realistic prospect for even incremental action in the upcoming legislative session.
But the fact that they exist at all illuminates some interesting factors in the continuing health care reform project that have vanished from public view in the cascade of negative publicity surrounding Shumlin’s capitulation late last year and his subsequent decision to walk away from his political career altogether.
The first interesting point is that there is nothing inherent in the current situation that forecloses a return to the financing aspect of the Shumlin plan at some time in the future.
The original Shumlin plan had two main thrusts. The first was to control costs in the doctor-hospital system through regulation and a change in the reimbursement system from fee-for-service to block payment for large groups of people.
The second was a dramatic shift in how the money was to be raised, from insurance premiums to the state tax system. Making that shift could have required raising some $2.5 billion, and even though that would have backed out an equivalent amount in private spending, getting the legislature to approve such a move would have been a huge challenge. Too big for Gov. Shumlin.
What got lost in the machinations over the past two years was the fact that the financial piece did not have to be done all at once. It is clear now, in hindsight, that there was considerable pressure from the very beginning for an incremental approach. Go slow, test each step to see that it works before going to the next one. Have a “Plan B.”
A major source of the go-slow pressure came from John Franco, a Burlington attorney with long ties to the Progressive Party and Chris Pearson, a Burlington representative and a leader of the Progressives in the House. Through the fall of 2014, when the Shumlin planners were struggling to figure out the financing piece, they invited Franco to come in several times to make his case.
But the governor himself would have no part of it. All or nothing was his mantra. It turned out to be nothing, which made Shumlin the poster boy in the country for the failure of health care reform, and played a major role in the loss of his political career.
The Richter and Sterling proposals demonstrate that it’s perfectly possible to consider an incremental approach to the financing side.
Moreover, the situation on the other side of the ledger — cost containment — makes it clear that passage of a huge financing bill in the 2015-2016 window would have been very, very risky.
That conclusion flows out of the original concept of the Shumlin plan. The underpinning for the plan was that it was critical to make sure costs in the system were sustainable out years into the future, before committing tax dollars to pay for the whole system. It was that emphasis that rendered the Vermont system different from the Canadian single payer system. The Canadians basically ignored cost containment when they adopted a universal, government-financed plan, and it drove them to rely on queuing to manage costs. Access to health care in the Canadian system is by far the worst in the developed world.
So, aren’t costs now sustainable in Vermont? No, they’re not. The Green Mountain Care Board has done excellent work in cutting back the inflation in the Vermont delivery system but system inflation is still running something north of 4 percent, rather than the 3.5 percent board target.
And the essence of that effort — establishment of an integrated system so that we can move from fee-for-service to capitation — is moving at a grinding pace at best.
What is clear now is that we aren’t likely to have sustainable costs for at least three to five years, at best.
By that time we will have a new governor, or possibly even two, and a new Legislature. And if the constellations align favorably then we might take a new look at the whole financing portion of health care reform.
Something like the Richter or Sterling proposals would be a good place to start.
