MONTPELIER — The consultants who urged
Vermont to move to a single-payer health-care
system received 170 comments —
complimenting, questioning and criticizing their
draft report — but nothing persuaded the
researchers to revise their basic
recommendation, they told lawmakers Friday.
“It kept us busy and sleepless for a couple of
weeks, but we really benefited from these
comments,” William Hsiao, a Harvard University
professor of economics and lead author of the
report analyzing three health reform designs,
told the House Health Care Committee. His team
had double-checked its calculations and models,
Hsiao said. “Our conclusion and recommendation
didn’t change.”
Hsiao and three other principal authors came to
the Statehouse to deliver their final report and
field questions from two panels of lawmakers
charged with writing a bill that would move the
state toward ensuring all Vermonters had
medical coverage, simplify the current claims
chaos and curb mushrooming medical costs.
Gov. Peter Shumlin presented the Legislature
with his plan to achieve a single-payer health
system last week. It was based on the
preliminary recommendations from Hsiao and his
team.
The consultants haven’t been the only ones
peppered with questions and comments in the
month since Hsiao outlined the single-payer
plan. Lawmakers have received plenty of
feedback, and they had dozens of questions for
the panel.
One of the top issues: How reliable is the
estimate of $580 million savings from making
the switch to a single-payer claims system?
About $400 million of the savings would cover
the cost of extending standard medical coverage
to all Vermonters plus pay for investments in
primary care and update some community
hospitals.
Hsiao joked his team felt they were being
“punched on both cheeks” on the question of the
accuracy of the savings. Some people complained
the researchers underestimated the savings,
while others said they overestimated.
He cited, for example, Fletcher Allen Health
Care, which submitted its own analysis of the
savings it might experience as a result of
processing fewer medical claims. Fletcher Allen
argued Hsiao overestimated the medical center’s
savings.
Hsiao countered, “They used a much narrower
analysis of how a single-payer system would
affect them.” He said the state’s largest medical
center underestimated its savings by assuming
Medicare and Medicaid claims wouldn’t be
processed through a new, single claims pipeline
— but they would. And Fletcher Allen calculated
only clerical savings, he said, not savings for
doctors and nurses who would spend less time
on insurance paperwork.
Jonathan Gruber, economic professor at
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Massachusetts Institute of Technology and a co-
author of the report, suggested Hsiao was
almost too conservative in his assumptions about
savings.
Hsiao explained, “Our approach was to try to
underestimate the savings and overestimate the
cost. We didn’t want to mislead the Legislature
and governor into doing something risky.”
Deb Richter, a Vermont primary-care physician
and long-time advocate for a single-payer
system, is one of those who believe the state
would save more. Still, she said after the
presentation that she agreed with Hsiao: “It is
better to underestimate than overestimate.”
Sen. Kevin Mullin, R-Rutland, asked the
researchers whether creating a single-payer
system that guaranteed coverage to all residents
would make Vermont a magnet. “We keep
hearing it isn’t an issue, but not to my
satisfaction,” he said.
Gruber noted that under the federal Affordable
Care Act, other states would have universal
coverage, too. He added that studies of the
impact of generous welfare benefits on
migration have shown “it doesn’t seem to
matter.”
Nicolas Rockler, an economist with Vermont-
based Kavet, Rockler and Associates and another
researcher, added, “The unemployed aren’t very
mobile.”
Mullin also asked about the impact of the reform
on medical professionals. He said some doctors
told him if the state moved to a single-payer
system, they would leave. He noted the state
already has shortages among some medical
professionals, especially in rural areas.
Hsiao said he received a telephone call from
someone identifying herself as a doctor who said
she knew a dozen physicians who would move to
Vermont if it made the switch. He added that the
plan called for using about $50 million of the
$580 million in savings to recruit and retain
primary-care physicians.
Rep. George Till, D-Jericho, asked Hsiao to
address the concerns of employers who self-
insure.
The House Health Care Committee had received
a letter recently from John O’Kane, government
programs manager at IBM Corp., arguing it
should be allowed to continue to offer its own
insurance plan.
Hsiao told lawmakers that self-insured plans
could continue to operate but noted, “It would be
up to employers and workers whether they
wanted double insurance.” Vermont’s IBM
employees and their families all would be
eligible for the state’s standard coverage and
would be paying for it, Hsiao said.
O’Kane, in a telephone interview, said IBM would
object to paying for coverage the company didn’t
want.
Speaking after his presentation, Hsiao said he
was surprised at IBM’s opposition, given that the
company faces similar circumstances for its
employees in many countries. “They can still
offer a uniform package,” he said, by providing
supplementary coverage to Vermont’s standard
plan.
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“I understand rising health-care costs have been
straining IBM,” Hsiao said, noting he met with
their representatives in Vermont. “I’m surprised I
BM wouldn’t consider this, because this would
lower their costs for workers and their families.”
Armed with more information in the 200-page
final report from the Hsiao team and with the
Shumlin administration’s 80-page bill, House
Health Care Committee Chairman Mark Larson,
D-Burlington, said his committee would proceed
with its review of the state’s next steps.
“The first question,” Larson said, “is whether
there is enough evidence to believe a reformed
system would be better.” He posed that question
to the panel.
Gruber responded, “We aren’t in such a great
place now. With no change, we know where we
are headed — which is not sustainable.”
Contact Nancy Remsen at 578-5685 or
nremsen@bfp.burlingtonfreepress.com.