Vermont Steps Closer To Single-Payer Health Care

Originally published on May 22, 2011 6:49 pm

Vermont is about to accomplish something the federal government couldn't.

Once Gov. Peter Shumlin signs a bill on May 26, the state will be on track to having a single-payer health care system.

"We're actually trying to design the first single-payer health care system for America," Shumlin told Guy Raz, host of weekends on All Things Considered.

"Basically what our system will do is treat health care as a right and not a privilege," he says. "We want to design a system where health care will follow the individual, and not be a requirement of the employer, which we think will be a huge jobs creator."

Most importantly, Shumlin says, it'll be a publicly financed system. Everyone pays, and the state uses those "health care dollars to make us healthier, not to enrich insurance companies, inefficiency, waste, and the current fee-for-service system, which bills providers based on how much service they do."

But don't break out the Canada comparisons just yet.

Vermonters aren't going to wake up to a single-payer system overnight. What's being passed is more of a framework. They are using the Affordable Care Act, the hotly contested bill passed last year by Congress, as a bridge for the state to get there. When that bill becomes law in 2014, so will Vermont's plan.

The basic outline looks like this: The federal government, Vermont's state government and employers will all still pay in for health insurance. That money will then all flow through Green Mountain Care, Vermont's official health insurance. To equalize the rates consumers pay, the state will ask the federal government for Medicaid waivers. The state government must also court national employers that do business in Vermont to put their employees on Green Mountain Care.

The bill doesn't lay out hard specifics on how to pay for it all, which has critics nervous. A financial exploratory committee has the task of putting together a proposal due January 2013, but for now Shumlin isn't worried. He says there are only a few different options to choose from in order to pay for a publicly financed system, like using Medicaid vouchers.

The logistics will come in time, he says. Right now, the cost of health care is swelling and Shumlin believes setting Vermont up on a single-payer system will create a more sustainable way to take care of everybody.

"We have a crisis," he says. "What I find alarming is that so many of us are willing to pretend that everything is going to be OK if we stick with the current system. So we're taking the bull by the horns up here in Vermont."

If Vermont does get it right, it could see more businesses and jobs coming in. Shumlin sees this type of health insurance as a big financial ease for employers, especially small-business owners.

That's a big economic incentive, but it wasn't enough to save the single-payer provision of the Affordable Care Act from being axed by Congress last year. Yet Vermont might be the right size and the right political environment to be a sandbox for a single-payer system in America, and Shumlin believes it could serve as a model for other states.

"We want to figure this one out and get it right," Shumlin says, "Then we hope that perhaps others might follow."

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GUY RAZ, host:

We're back with ALL THINGS CONSIDERED from NPR News. I'm Guy Raz.

Vermont is about to go where no state has gone before, to a single-payer health care system.

Single-payer was the dream of many liberals when Congress began debating a health care overhaul a few years back, but the idea was quickly abandoned here in Washington.

Not so, though, in Montpelier, where this week Governor Peter Shumlin says he'll sign a law that will ultimately give every Vermonter a state-issued Green Mountain Care insurance card.

Governor PETER SHUMLIN (Democrat, Vermont): Basically what our system will do is treat health care as a right and not a privilege. We want to design a system where health care will follow the individual and not be a requirement of the employer, which we think will be a huge jobs creator.

And most importantly, a publicly financed system. We all pay - where we use our health care dollars to make us healthier, not to enrich insurance companies' inefficiency, waste and the current fee-for-service system, which bills providers based on how much service they do as opposed to an incentive to keep us healthy.

RAZ: So essentially you will have a single-payer system but not on May 27th. I mean, people don't wake up the next day and all of a sudden have universal health care in Vermont.

Gov. SHUMLIN: That's correct. We're using the federal bill as a bridge to the system. When the federal bill goes into effect in 2014, our system will go into effect on that same date.

RAZ: Now, some critics of this plan say the big problem is does not address the issue of financing.

Gov. SHUMLIN: Well, that's not really true. We've been very clear it's going to be a public-financed system, and obviously, there's only so many options that one can use.

But I keep saying is the problem with health care reform across America so far has been that no one has gotten cost containment right. What I find alarming is that so many of us are willing to pretend that everything's going to be okay if we stick with the current system.

So we're taking the bull by the horns up here in Vermont. We think we can get it right. And if we do, we think it's a huge jobs creator.

RAZ: Okay, explain how this will work for the average Vermonter who does not work for the state, somebody who works for a company. What happens?

Gov. SHUMLIN: We're going to design a system that spends less. Now how are we going to do that? When you come out of your provider's office, our single-payer entity will say, when you hit the desk, check, cash or credit card?

You'll adjudicate the bill right there for your portion. That saves eight to nine cents on the dollar. So that's low-hanging fruit. In a Vermont system, our people estimate that's about $500 million a year, big money.

Second, that card will be a pipeline to your medical records so that you can see everything that happened medically to you, the provider, throughout your lifetime and manage your care based upon that information.

Now, right now, about 30 percent of Vermont tests are duplicative because the next provider doesn't know what the last provider did to you. The list goes on and on. So that's a tool for better management of health.

And a third big savings will come from a system that reimburses providers based on health outcomes, instead of the current system, where they reimbursed for the number of services that they put you through.

RAZ: The single-payer system, as you know, was abandoned last year in the debate over the national health care plan. Now, the plan that was passed by, primarily by Democrats in Congress. Why do you think you can make this work in Vermont?

Gov. SHUMLIN: Every time someone asks a question about the system, I ask this question: Is it different than the current system? In other words, are you asking about a problem that doesn't exist now?

The point is, the current health care system is sinking small businesses, that as I mentioned are spending more and more money on insurance for less and less coverage. So this system is not sustainable.

I'm convinced that if we're the first system in the country where health insurance is paid for by all, follows the individual, we get the jobs because we take a tremendous burden off their backs that they can't right now keep up with.

RAZ: Presumably a sizable portion of your state's population receives Medicare. So they are insured under the Medicare system. How will that work with Green Mountain Care? I mean, will those people remain on Medicare and some people in the state on Green Mountain Care, or will it be different?

Gov. SHUMLIN: We're working together with the Obama administration to get a number of waivers, but one is for Medicare and Medicaid. We're not asking for one additional federal dollar, but we're asking for the state flexibility to spend those dollars as we see fit.

RAZ: That's Vermont Governor Peter Shumlin, speaking to me from Vermont Public Radio. Governor, thank you so much.

Gov. SHUMLIN: Hey, thanks so much for having me. Transcript provided by NPR, Copyright NPR.