Financing Single Payer: Let’s Stick to the Facts Doug Hoffer, Independent Policy Analyst Some have suggested that Dr. Hsiao’s plan to finance the new system will not work. But this is the wrong place to start. Dr. Hsiao submitted a proposal; it is not the state’s plan. Rather, it is a point of departure for […]
When Governor Peter Shumlin signs the new health care bill into law on May 26th, many people may wonder how we came to this point. Why is it that Vermont is the first state to pass legislation that acknowledges that health care is a public good, and that the best route toward universal access and cost control is to create a health care system that is publicly funded? There are still many more steps to go before we reach this goal. Nonetheless, it is worth pausing at this important juncture to ask what makes Vermont different.
Despite the politics and war of words, the health care proposal now before the Senate makes relatively modest steps towards a single payer health care system, while also taking steps to start controlling costs.
It is true that many questions about costs and financing are still unanswered. That is because the “plan” is not yet determined. I support a single payer system. It works in many places and can work here. But, I do not see this proposal locking us into a single payer at all. (Some will like this, others will not). Instead, the bill is designed to start controlling costs, to answer the questions we all have and to bring a plan to the Legislature, which we will accept or not. Here is what it does.
It establishes a Board to answer questions about what Green Mountain Care (the single payer) may look like. So, over the next few years a benefits package will be designed, costs and provider payments determined and a financing plan recommended. The Legislature will then vote to approve or disapprove it. This is expected in 2013 but may not happen until 2017, leaving much time for questions, answers and debate on the issues.
While this is a path to a possible single payer, it can only happen if certain requirements are met: there must be a comprehensive coverage plan, we must know the cost and how we will pay for it; the federal government must provide waivers and our Legislature must vote to approve it.
Certain values will guide the plan. It must cost less; with significant savings in the initial stages, followed over time by slower and lower cost increases than in our current system. It must include comprehensive benefits, including mental health and wellness; fair reimbursement for providers and protections for consumers. And, those on Medicare and other federal health care and retiree benefit programs (i.e. military programs) will keep their benefits. They will not see lower benefits.
It establishes a health insurance exchange as required by the federal government. The exchange is a way to help us comparison shop for health insurance and for some to receive subsidies to help pay. A variety of plans will be in it, including two new multistate plans required by federal law. Other plans will be available outside the exchange. It does allow us to move towards common administrative forms and other efficiencies. It should be operational in 2014 for individuals and small employers and for others in 2017.
And, it establishes pilot projects to start controlling costs by changing how health care is paid for and delivered. Costs will be lowered and outcomes improved by having physicians work with a team of others (i.e. prevention, mental health). They will be paid on a per-person - per month basis not the current fee for service method. And, be rewarded financially for keeping us healthier. This is already underway in our Blueprint for Health program. Finally it makes better use of technology and electronic data to further cut costs.
The bottom line: there are a lot of questions to be answered. This bill only gets the process started.
Because of the recommendations in the Hsiao Report, funding proposals of the single payer health care system have focused exclusively on an employment tax to be paid by both the employer and employee. While it may be advantageous for some of the revenues to be levied in this way, to depend on a payroll tax as the only tax funding the system is not equitable.
John Walsh, writing in Dissident Voice, a radical blog based in Santa Rosa, California, has delivered a scathing criticism of Governor Shumlin’s health care bill, claiming that its passage would not result in a single payer system in Vermont, and that therefore supporters are being hoodwinked.
The usual practice in committees and hearings - the standard back and forth of legislation - is to pick away at the details ("the devil is in the details"). Not this time. This time the devil will reside in our failure to create and establish a true health care system.
The health care system reform design of the Hsiao, Kappel, Gruber team is masterful. Both Option 1 and Option 3 are single payer plans that will create an historic first for the United States. They will establish a sustainable system of health care that includes everyone and that will prevent both individuals and the system as a whole from plunging into financial ruin due to uncontrolled health care expenses.
Dear Mr. Hester: Thank you for the opportunity to comment. The process to select experts to design three versions of a health care system for all of Vermont has been exceptionally open and accessible and is most appreciated. I support Dr William Hsiao and his team to do the system design work. First of all, […]
As the legislature approaches adjournment, and as S.88 nears its final disposition in the Senate, the Vermont for Single Payer campaign would like to clarify its stance. First and foremost, we support the health system studies that are embedded in S.88. For this reason, we would be very happy if the bill passes, with or […]