Single Payer Proposal in Vermont

On May 27, 2010 Vermont Act 128 - "An act relating to health care financing and universal access to health care in Vermont" - was signed into law.

Vermont is a no-BS state. The bill doesn't pussyfoot around the problem: "The escalating costs of health care in the United States and in Vermont are not sustainable...Only continued structural reform will provide all Vermonters with access to affordable, high quality health care."

The Assembly specified nine principles that health reform must satisfy:

1. "All Vermonters must have access to comprehensive, quality health care."
   
2. "The state must ensure public participation in the design, implementation, evaluation, and accountability mechanisms in the health care system."
   
3. "Primary care must be preserved and enhanced."
   
4. "Every Vermonter should be able to choose his or her primary care provider, as well as choosing providers of institutional and specialty care."
5. "The health care system will recognize the primacy of the patient-provider relationship, respecting the professional judgment of providers and the informed decisions of patients."
   
6. "Vermont’s health delivery system must model continuous improvement of health care quality and safety and, therefore, the system must be evaluated for improvement in access, quality, and reliability and for a reduction in cost."
   
7. "A system for containing all system costs and eliminating unnecessary expenditures, including by reducing administrative costs; reducing costs that do not contribute to efficient, quality health services; and reducing care that does not improve health outcomes, must be implemented for the health of the Vermont economy."
   
8. "The financing of health care in Vermont must be sufficient, fair, sustainable, and shared equitably."
   
9. "State government must ensure that the health care system satisfies [these] principles."

Act 128 created a Commission charged with proposing three models, one of which had to be a single payer, to the Assembly by the end of the year. The Commission hired Professor William Hsiao, a brilliant economist based at the Harvard School of Public Health to lead the design process. Bill Hsiao has worldwide experience working with governments to reform health systems, most recently in Taiwan, where he developed a well-functioning single payer system.

Professor Hsaio presented his report to the Vermont legislature yesterday. His team guided itself by six design parameters:

1) We must maximize federal funds for Vermont.

2) There must be no increase in overall health spending and therefore all funding for the options must derive from savings.

3) No option could result in an overall increase of the health care cost burden faced by employees or employers.

4) No option could yield a reduction in the overall net income received by physicians, hospitals or other health care providers.

5) The implementation of any option must move Vermont toward an integrated health care delivery system that allows for a transition to global budgets and risk-adjusted capitated payments.

6) No option could entail changes for Medicare beneficiaries in Vermont.

Among the three models he presented, Hsaio recommended a system of single payer insurance administered through a combination of public and private mechanisms, with oversight by a board composed of citizen, provider, employer and government representatives. He envisions the delivery system being configured into accountable care organizations paid largely through risk adjusted capitations.

As a small state with a small population (617,000 in 2009), Vermont has sustained a relatively thoughtful and civilized political climate. It will be able to consider a thoughtfully proposed single payer model without fear that the two magical words Republicans brandish on the national scene ("socialized medicine") will induce terror and bring rational inquiry to a dead stop. Its newly elected governor - Peter Shumlin - favors the single payer concept. And Bernie Sanders, formerly Representative and now Senator from Vermont, identifies himself as a socialist!

U.S. political dialogue about health system reform has been stymied by our refusal to even consider alternatives to the hodge podge of public and private entities we've allowed to grow like Topsy over the decades. The national result is economy-busting costs and mediocre results. Vermont is doing the U.S. a crucial service by putting a true alternative onto the table of political possibility!

(For readers who want more detail on the Vermont process, Bill Hsaio's ten page statement is clear and easy to read.)