Vermont’s Single Payer Experiment

Governor Peter Shumlin earlier signed into law a bill that has the ultimate ambition of implementing Single Payer Health Care for all 620,000 residents of Vermont. Naturally many people are eager to help these efforts fail but the movement is an honest one. Organizations like Vermont Health Care for All – which is made up of citizens, physicians, and politicians – have worked tirelessly for the past decade to get the word out about single payer in Vermont. The only people who have fought these efforts are the representatives of the insurance industry and free market advocates who mistakenly believe that market forces can dominate in the realm of insurance. Despite their efforts, Vermont is on its way to showing the American people what they are missing.

As with so many other political actions in this country, the Vermont bill was a compromise of sorts. Its plan was developed by economist William Hsiao, the architect of Taiwan’s successful single payer system amongst others. This bill is not perfect, which many groups have pointed out but it does begin to transition the system away from a for profit one dominated by private insurance providers. As you may remember, I posted an earlier blog that explores where the largest medical industry profits are earned and the insurance industry had the lowest profit margin. The Vermont bill recognizes this fact and seeks to establish rate controls over such things as procedures, supplies, etc. This regulatory apparatus in the bill is not fully developed and will need to be configured in the coming years. Regulating fees is not a new idea; the Maryland Health Services Cost Review Commission has been in place for decades, resulting in Maryland having the lowest health care costs in the nation. In contrast to the Maryland system, the Vermont bill seeks to reign in spending by primarily streamlining administrative processes, though care inflation is driven by all aspects of the medical industry.  Hopefully the Vermont bill will create a board similar to Maryland’s to further control costs, a prospect which seems to be central to the Vermont effort.

Vermont hopes to implement its nascent system by 2014, even though federal regulations associated with ACA state that such state actions cannot happen until 2017. Furthermore, Vermont must work out how its medicare and medicaid funding will be integrated into the state system. These things will be worked out in the coming months. Nonetheless, the tiny state of Vermont may finally offer the American people a domestic example of how health care should be.

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