Health Reform: As Vermont Goes, So Goes the Nation?

If Vermont can navigate its political waters and successfully implement this plan, it will provide a model for other states and the country as a whole.

W.C. Hsiao, PhD, from the Department of Health Policy and Management, Harvard School of Public Health, “State-Based Single-Payer Health Care – A Solution for the United States?" New England Journal of Medicine, March 31, 2011

Vermont is a tiny Northeastern state. It houses 0.20% of U.S. population and contains 0.26% of the U.S land area. Its population is 1% black, 1.5% Hispanic, and 95.0% white, hardly representative of the U.S. as a whole. It is the home of Ben and Jerri’s ice cream. It has lots of cows, 215,000 in all which emit 34 tons of methane gas. It is a beautiful mountainous and heavily wooded state.

It is a heavily Democratic State. It is the home of Dr. Howard Dean, former head of the Democratic Party. Its governor, Democrat Peter Shumlin, ran on a platform of single-payer health reform. One of its Senators is a member of the Socialist Party, the other is a Democrat. Its Democratic legislature is committed to a single-payer.

The Vermont Legislature in May 2010 commissioned a study, carried out by the a group of experts at the Department of Health Policy at the Harvard School of Public Health. The purpose of the study was to determine the impact of a single-payer system in Vermont.

The study concluded single payer would be good for Vermont. It would quickly save 8% in health care costs through administrative consolidation and simplification, another 5% by reducing fraud and abuse, and 25% in costs over 10 years.

Furthermore it would achieve universal coverage, reduce the rate of health care increases, and create a primary-care focused, integrated delivery system.

I say fine – go for it. But Vermonters, do not delude yourself into thinking you are the weather vane for health reform in the United States. Your demographics are less ethnic, your politics are more Democratic, your Medicaid debts are lighter, and your present coverage of 7% uninsured is less that half that of the U.S.at 16%.

The Harvard folks assumed their single payer design would end the perverse incentives inherent in fee-for-service by risk-adjusted capitation coupled with pay for performance bonuses, care integration, and formation of accountable care organizations.

The rest of the country stoutly resists single-payer and Obamacare, a quasi-single payer which will still leave 23 million uninsured after 10 years, and which has been carried out for the last 5 years in your neighboring state of Massachusetts, with mixed results, including less than 3% uninsured, but with higher costs, longer waiting times, and growing primary care shortages.

Still, I repeat, go for it! The States ought to be experimental laboratories for social reform. Maybe the federal government will grant you waivers from the health reform law. Maybe Vermont will lead the single-payer band. Good luck. You may need it. The rest of the U.S. lives outside the Washington Beltway and the Boston Kneltway in fly-over country.