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Vermont Will Try Single-Payer Health Care

May 30, 2011
Written by: , Filed in: Practice Management
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Vermont Governor Peter Shumlin signed a law on Thursday that starts the state on the road to a single-payer universal health care system.

It’s a very long road. Washington could put up stop signs; the plan will require a couple of federal waivers. And the final destination might not even end up being a single-payer system after all.

Still, if everything goes as planned, Vermont will in effect be undertaking a giant, real-world clinical trial over the next few years.

Shumlin, a Democrat, and U.S. Senator Bernie Sanders of Vermont, an independent who describes himself as a democratic socialist, have been pushing for years to modify the state’s health care system. The State House and Senate, both controlled by Democrats, thrashed out the new plan this spring. On signing day, according to HealthImaging.com, Shumlin said:

This law recognizes an economic and fiscal imperative—that we must control the growth in health care costs that are putting families at economic risk and making it harder for small employers to do business.

Lieutenant Governor Phil Scott, a Republican, disagrees. In an op-ed piece that he distributed to newspapers on March 22, he said he opposed the plan because he questioned the projected cost savings ($590 million in the first year alone) and worried about the uncertainties over what final form the system might take:

I feel as though we’re ordering a new car without knowing whether it’s a Yugo or a Rolls-Royce, whether we can actually afford it, or whether we’ll even get what we need.

The law establishes a state health-benefits exchange, as mandated by the federal Affordable Care Act, that will offer coverage from private insurers, state-sponsored plans, and multistate plans. Tax credits will help offset premium costs. A five-member board will manage the exchange, called Green Mountain Care, and set reimbursement rates.

The eventual goal is a state-funded and -operated single-payer system. Among the things that need to happen first, as reported by Reuters, are:

  • The state needs to secure a federal waiver regarding certain aspects of Green Mountain Care.
  • A financing plan is to be delivered to the Legislature by 2013 and adopted by 2014.
  • It must be determined that the new system costs less than the current fee-for-service system.
  • Another federal waiver needs to be obtained in order to proceed with the single-payer option in 2017.

Obviously, the timeline allows plenty of opportunities for legislative changes. However, even if Republicans regain control of the Legislature, there’s no guarantee that they would scrap the plan. Vermont likes to do things its own way, and that trend cuts across party lines.

This could be an extremely informative controlled experiment, confined to one small state with just 620,000 residents, to see just how such a system would work—or not—in the United States. It will be fascinating to watch over the next few years.

Related seminar: The Business of Radiology


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