A New Study Shows Why Obamacare Should Have Been Single-Payer

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Last summer, with Obamacare's initial troubles fading from view, The New Republic's Brian Beutler noted that certain problems with the healthcare overhaul won't ever go away because they're inherent to its architecture...

... The main problem, Beutler wrote, was that you have to re-enroll every year—and there's no guarantee that you can keep your plan, that rates won't go up, or that the government subsidy won't go down.

But a new study by a group of physicians and health-policy researchers in BMC Health Services Research highlights another problem with our complex healthcare system.

In 2012, billing and insurance-related administrative costs—bureaucratic paperwork and red tape, essentially—cost the U.S. economy around $471 billion, and 80 percent of that was due to inefficiencies in our multi-payer system.

That's how much administrative waste is embedded in our fragmented, dysfunctional system of paying for care,”...

... The study found that the $375 billion saved annually with a single-payer system could be used to cover all of the nation's uninsured and upgrade coverage for millions of under-insured citizens...

Study: Single-Payer Healthcare Would Save U.S. $375 Billion | The New Republic

@elkpark You can quip over semantics all day, the fact remains that Vermont attempted to enact hybrid single payer legislation and failed because the research proved that it would be too expensive for the tax payers. Bottom line.
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@elkpark You can quip over semantics all day, the fact remains that Vermont attempted to enact hybrid single payer legislation and failed because the research proved that it would be too expensive for the tax payers. Bottom line.

I'm not "quipping," I'm just pointing out inaccuracies in your posts. Please point out where "the research proved that it would be too expensive for the tax payers." The Politico article you link above notes that the governor was concerned that legislators wouldn't be able to agree on a way to pay for the plan, he doubted he could sell the tax increases involved to the electorate (what with his having significantly less political capital than he did before the midterm elections; he hasn't even officially been re-elected governor yet), and the involvement of the now infamous Jonathon Gruber had tarnished the prospects of the program -- but says nothing about any actual "research." Do you have other sources that report on any actual "research" that "proves" the plan would be too expensive?

Whenever people want to complain that a single-payer system would be too "expensive" and would require significant tax increases, they never seem to mention that the increased taxes which would (I freely admit) be necessary to pay for the program would be more than offset by people no longer needing to pay the thousands of dollars in premiums that most of us are now paying every year to private-for-profit insurance companies.

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Specializes in Critical care, tele, Medical-Surgical.
From your article it is also clear that one man, who campaigned on implementing single payer decided he would not. What he claimed was too expensive was NOT single payer.

... These are simply not tax rates that I can responsibly support or urge the Legislature to pass,” the governor said. In my judgment, the potential economic disruption and risks would be too great to small businesses, working families and the state's economy.”

And that was for a plan that would not be truly single payer.

Large companies with self-insured plans regulated by ERISA would have been exempt. And Medicare also would have operated separately, unless the state got a waiver, which was a long shot...

... Advocates of a single-payer plan said Shumlin should not be able to cast aside Act 48, the 2011 law that called for the creation of Green Mountain Care, without repealing it. A group planned to hold a rally in front of the statehouse on Thursday to protest his decision.

The governor's misguided decision was a completely unnecessary result of a failed policy calculation that he pursued without Democratic input,” the group Healthcare Is a Human Right Campaign said in a statement.

Definition of Single Payer Healthcare:

of, relating to, or being a system in which health-care providers are paid for their services by the government rather than by private insurers

Single-payer - Definition and More from the Free Merriam-Webster Dictionary

Single-payer health care: A system of health care characterized by universal and comprehensive coverage. Single-payer health care is similar to the health services provided by Medicare in the US.

The government pays for care that is delivered in the private (mostly not-for-profit) sector.

Doctors are in private practice and are paid on a fee-for-service basis from government funds.

The government does not own or manage their medical practices or hospitals.

Single-payer health care is distinct and different from socialized medicine in which health care facilities and workers receive payment as government employees.

http://www.medicinenet.com/script/main/art.asp?articlekey=25520

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how do you delete double comments?

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@ elkpark. What do you have against people profiting from services provided? Healthcare is a business. What is your profession? Don't you profit from your service?

This article breaks down why single payer is too expensive.

Six Reasons Why Vermont's Single-Payer Health Plan Was Doomed From The Start - Forbes

Last week, Vermont Governor Peter Shumlin (D.) announced that he was pulling the plug on his four-year quest to impose single-payer, government-run health care on the residents of his state. In my judgment,” said Shumlin at a press conference, the potential economic disruption and risks would be too great to small businesses, working families, and the state's economy.” The key reasons for Shumlin's reversal are important to understand. They explain why the dream of single-payer health care in the U.S. is dead for the foreseeable future—but also why Obamacare will be difficult to repeal.

Leading left-wing economists worked on Vermont plan

Shumlin's predecessor in Montpelier was a Republican, Jim Douglas. In 2009, Douglas announced that he would not be seeking a fifth two-year term; five Democrats joined the contest to replace him. Progressive activists demanded that each candidate promise to enact single-payer health care if nominated; all five complied. Shumlin got the nod, and assumed office in January 2011.

Shumlin got right to work. In Feburary 2011, a trio of health economists, including Harvard's William Hsiao and MIT's Jonathan Gruber, sent Vermont a 203-page report describing the feasibility, and the alleged virtues, of single-payer in the state. Gruber signed a $400,000 contract to work with Vermont on the project.

Hsiao has spent a good chunk of his career helping governments install single-payer systems; for example, he helped the Taiwanese government install Medicare for all” in 1995. He's also responsible for Medicare's Byzantine price-control scheme known as the Resource-Based Relative Value System, or RBRVS.

Gruber you know; at a hearing to discuss the Vermont report, the Obamacare architect was confronted by a letter from a former state senator, who argued that any Hsiao-Gruber type health care mega-system will inevitably lead to coercive mandates, ballooning costs, increased taxes, bureaucratic outrages, shabby facilities, disgruntled providers, long waiting lines, lower quality care, special interest nest-feathering, and destructive wage and price controls.” In response, Gruber wisecracked: Was this written by my adolescent children by any chance?”

Hsiao and Gruber promised that single-payer health care in Vermont could save $1.6 billion over ten years. With that endorsement in hand, Shumlin and the legislature passed Act 48, a law instructing the state to figure out how to finance a single-payer system. They dubbed it Green Mountain Care. If Vermont gets single-payer health care right, which I believe we will, other states will follow,” pronounced Shumlin. If we screw it up, it will set back this effort for a long time. So I know we have a tremendous amount of responsibility, not only to Vermonters.”

Spoiler alert: they screwed it up. But think of it like one of those murder mysteries where the victim gets shot in the first scene; the real story lies in what led to the poor slob's demise.

1. Vermont insisted on platinum-plated insurance coverage

The market-oriented way to bring prices down is to give consumers more control of their own health care dollars, like they have in every other aspect of the economy. If you as an individual control the money, you're going to shop around for the best combination of quality and price. If somebody else is paying for the care, you're less likely to care about how much anything costs.

Unfortunately, that basic insight is anathema to the progressive left. Single-payer advocates believe, on principle, that health care is best when it is free to the patient at the point of care.” On the back end, of course, you pay for it in taxes, and in between the government decides whether or not you should be allowed to have that knee replacement or that mammogram. This is what we call rationing.

Sure enough, the Vermont plan insisted on not merely gold-plated health insurance for all Vermonters, but platinum-plated health insurance. As a point of comparison, the Bronze-level plans on the Obamacare exchanges have an actuarial value of 60 percent: meaning, for every dollar in health costs that a policyholder incurs, the insurance company will plan to pay 60 percent, and the patient will pay 40 percent in the form of co-pays, deductibles, and the like. Silver plans, used as the benchmark for Obamacare's subsidies, have an actuarial value of 70 percent; Gold plans, 80 percent; Platinum plans, 90 percent.

According to Hsiao and Gruber, the actuarial value of the average Vermont private plan was 87 percent in 2011. The Hsiao-Gruber calculation of single-payer savings assumed that Green Mountain's actuarial values would also line up at 87 percent. But instead, the Vermont plan mandated an actuarial value of 94 percent—more generous than even the costliest Obamacare plans.

In a post-mortem presentation on December 17 by Michael Costa, Shumlin's deputy director for health care reform, Costa said that Vermont, out of desperation, considered the idea of reducing the required actuarial value to 80 percent—the Obamacare Gold” tier—but couldn't stomach the idea of offering Vermonters such poor” benefits. It would be a step down in benefits for many Vermonters,” said Costa.

2. ‘We can move full speed ahead…without knowing where the money's coming from'

In other words, not only would Green Mountain Care cost more by covering more people than Obamacare, it would cost more by forcing everyone to obtain more financially generous coverage than people currently have. Is it any wonder that the costs of such a plan were prohibitive?

But Vermont's single-payer religionists were not to be deterred. We can move full speed ahead with what we need without knowing where the money's coming from,” assured Anya Rader-Wallack, Shumlin's special counsel for health care reform.

But not forever. Shumlin postponed issuing a report on the plan's proposed costs until January 2013, a few months after the 2012 elections. When the statutory January 2013 report date arrived, the governor refused to produce the mandate report,” chronicles John McClaughry in an excellent write-up of the episode. 2013 came and went. It got so bad that a Democratic state representative, Cynthia Browning, sued the governor to force the release of the report. (She lost.)

In 2014, Republican Scott Milne ran against Shumlin and his single-payer plan. I said during our debates: the difference between Peter Shumlin and Scott Milne is that I will tell you before the election that single payer is dead.”

The long-awaited report has still not been published. Shumlin defeated Milne in deep-blue Vermont by 2,095 votes, a mere 1.1 percent of the electorate. Would Milne have won if Shumlin had been more transparent about Green Mountain's costs?

3. The Vermont plan would have required a 160 percent tax increase

The Shumlin administration, in its white-flag briefing last week, dropped a bombshell. In 2017, under pre-existing law, the state of Vermont expects to collect $1.7 billion in tax revenue. Green Mountain Care would have required an additional $2.6 billion in tax revenue: a 151 percent increase in state taxes. Fiscally, that's a train wreck. Even a skeptical report from Avalere health had previously assumed that the plan would only” cost $1.9 to $2.2 billion extra in 2017.

In 2019, Costa estimated that Green Mountain Care would have required $2.9 billion in tax revenue vs. $1.8 billion under pre-existing law: a 160 percent increase in revenue.

Costa-Vermont-2.png And the Shumlin administration was already backtracking from raising that kind of levy. After small businesses pushed back against a proposed 11.5 percent payroll tax, Gov. Shumlin promised to offer a grace period to businesses with fewer than 100 workers. That would have reduced Green Mountain funding by another $500 million or more, according to Costa, funding that would have to be made up in taxes elsewhere.

A big part of the reason why the Vermont plan was so expensive is because it tried to replace federally-subsidized insurance with state-subsidized insurance.

Today, over 150 million Americans receive employer-sponsored health insurance that is heavily subsidized by the federal government, because workers don't pay income or payroll taxes on the value of their health coverage. The Vermont plan would have forced local businesses to offer the single-payer plan, financed by the new payroll tax, and substantial premiums for workers.

Under Obamacare, if you qualify for insurance subsidies, your income has to be under 400 percent of the Federal Poverty Level, or $46,680 for a childless adult. For example, if you make $45,000 a year, Obamacare will subsidize your premiums once you've paid 9.5 percent of your income—$4,435—yourself.

The Vermont plan applies the same subsidy standard to all state residents. In other words, if you make $70,000 a year, you'd have to pay $6,650 in premiums before state subsidies would kick in. That is to say, you'd lose a large insurance subsidy and pay far more in taxes for the privilege. In what counts for mercy, no Vermonter would have to pay more than $27,500 a year in premiums before gaining coverage.

4. Hospitals and insurance companies had every reason to fight the plan

So if you're going to offer every Vermonter more generous insurance coverage than they currently have, and somehow make the math work, you have to do two things: (1) raise taxes, and (2) pay doctors and hospitals less. We covered #1 above, now let's talk about #2.

The Green Mountain plan sought to require hospitals and doctors to accept Medicare-like reimbursement rates for their privately-insured populations. Because private insurers pay providers more than Medicare does, this would have amounted to a 16 percent cut in payments to doctors and hospitals, according to the analysis by Avalere Health. Needless to say, the doctor and hospital lobbies weren't big fans of the Vermont plan, and fought furiously to sink it.

Avalere-Vermont.png This isn't to say that Shumlin and colleagues were wrong to seek lower prices for health care services. Health care in America is far too expensive. But brute-force price controls are going to face understandable resistance from these powerful interests.

This is where single-payer crashes on the rocks, both at the state and national level. The nearly $1 trillion U.S. hospital industry is not going to sit around quietly and let single-payer advocates impose price controls. This is good if you oppose single payer. But a word of warning for conservatives: hospitals have lobbied as furiously in favor of Obamacare, because it spends more money on them, as they have against single payer.

And we haven't even started talking about the local health insurance industry, which would have been practically abolished by the Vermont plan. Understandably, health insurers weren't too fond of that idea.

The point here is that you might want to believe that Vermont's single-payer plan failed because it was unpopular with the voters. But an equally big factor was how unpopular it was with the health care industry.

5. Other cost savings weren't going to materialize

Michael Costa's briefing outlined several other rosy scenarios from earlier estimates that didn't pan out. Vermont originally assumed that the state would receive $267 million from Washington in the form of an Obamacare waiver. The revised estimate was only $106 million.

They originally estimated $637 million in state Medicaid funding; that number had to be reduced by $150 million due to budget constraints. The ongoing recession reduced Vermont tax revenues by $75 million over the 2016-2017 time frame.

6. The Vermont plan wouldn't have achieved true single-payer

The basic problem with any kind of state-based health reform—right or left—is that the federal government is by far the primary player in U.S. health care. The federal government subsidizes employer-sponsored health insurance to the tune of $500 billion a year, through the tax code. It spends even more on Medicare for the elderly, and finances the majority of Medicaid for the poor.

The Vermont plan aimed to replace employer-sponsored and individually-purchased private insurance with a single, state-run insurer. But the state couldn't preempt Medicare, or military health care, or large companies that directly pay for their workers' health care using a process called self-insurance. Indeed, the Hsiao-Gruber report makes clear that for the Vermont plan to work, the state would need to gain waivers from Medicare, Medicaid, and Obamacare.

In addition, the state couldn't prevent people from getting private health insurance in neighboring states like New Hampshire.

Hence, one of the key purported advantages of single-payer health care—that doctors and hospitals would only have to work with one insurer, simplifying their paperwork—turned out to be impossible.

As it is, Vermont only has three major private insurers: Blue Cross Blue Shield of Vermont, Cigna, and MVP. Because Vermont doesn't have many insurers, and because those insurers have worked hard to reduce administrative costs, Avalere estimated that the Green Mountain plan wouldn't have reduced paperwork by much.

Vermont single payer: An unmitigated failure

What's remarkable, then, about Shumlin's attempt at single-payer health care is not that it failed. What's remarkable is that he wasted the state's time and resources on something that attempted to refute the laws of arithmetic. That's four years Shumlin wasn't spending on making the Vermont economy better for the people who live there. Small wonder that his reelection margin was razor-thin.

If there's one quote that sums up the whole episode, it's the one from Anya Rader-Wallack, declaring that we can move full speed ahead…without knowing where the money's coming from.” Green Mountain Care attempted to offer Vermonters more generous coverage than they currently had, but couldn't figure out how to convince doctors and hospitals to accept pay cuts, nor workers to accept tax hikes.

A few years back, I was in Ohio debating a prominent progressive think-tanker, someone closely tied to President Obama and Hillary Clinton, and a veteran of the health-reform wars. At one point she declared, we will never see single payer health care in the United States.” Other experienced Democrats have said the same thing to me over the years. What those Democrats have learned is that slashing payments to hospitals, doctors, and drug companies—the only way to finance single-payer coverage—is politically impossible.

The temptation among conservatives is to do a victory dance of the I told you so” variety. But that would be a serious mistake.

Hospitals and other industry stakeholders love Obamacare because the law expands coverage without cutting costs. The law basically accepts what hospitals and doctors are paid now, and simply writes a check to cover those costs for people who are uninsured. For-profit hospital chains like Tenet, Community Health, and HCA are enjoying record profits under the new health law.

As my colleague Bruce Japsen notes, Tenet just announced that it will be the presenting sponsor of the fourth annual Clinton Health Matters Activation Summit,” during which you can be assured that Tenet will not be complaining about Obamacare, but rather enthusiastically supporting it.

In other words, the same health-industry forces arrayed against single-payer in Vermont will be arrayed against a repeal of Obamacare by Republicans.

So, no. Obamacare won't hasten the arrival of single-payer health care in the U.S. But it will retard the arrival of truly affordable health care for most Americans.

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@ herring_RN I said hybrid single payer --and yes, if his hybridization of single payer was too expensive, it's obvious that true single payer would be even more disastrous to tax payers.

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Specializes in Critical care, tele, Medical-Surgical.
@ herring_RN I said hybrid single payer --and yes, if his hybridization of single payer was too expensive, it's obvious that true single payer would be even more disastrous to tax payers.
Sorry, I missed the word hybrid. Single payer wouldn't include Blue Cross/Shield, or other payers. Single does not mean more than one.
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@ elkpark. What do you have against people profiting from services provided? Healthcare is a business. What is your profession? Don't you profit from your service?

This article breaks down why single payer is too expensive.

Six Reasons Why Vermont's Single-Payer Health Plan Was Doomed From The Start - Forbes

Last week, Vermont Governor Peter Shumlin (D.) announced that he was pulling the plug on his four-year quest to impose single-payer, government-run health care on the residents of his state. In my judgment,” said Shumlin at a press conference, the potential economic disruption and risks would be too great to small businesses, working families, and the state's economy.” The key reasons for Shumlin's reversal are important to understand. They explain why the dream of single-payer health care in the U.S. is dead for the foreseeable future—but also why Obamacare will be difficult to repeal.

Leading left-wing economists worked on Vermont plan

Shumlin's predecessor in Montpelier was a Republican, Jim Douglas. In 2009, Douglas announced that he would not be seeking a fifth two-year term; five Democrats joined the contest to replace him. Progressive activists demanded that each candidate promise to enact single-payer health care if nominated; all five complied. Shumlin got the nod, and assumed office in January 2011.

Shumlin got right to work. In Feburary 2011, a trio of health economists, including Harvard's William Hsiao and MIT's Jonathan Gruber, sent Vermont a 203-page report describing the feasibility, and the alleged virtues, of single-payer in the state. Gruber signed a $400,000 contract to work with Vermont on the project.

Hsiao has spent a good chunk of his career helping governments install single-payer systems; for example, he helped the Taiwanese government install Medicare for all” in 1995. He's also responsible for Medicare's Byzantine price-control scheme known as the Resource-Based Relative Value System, or RBRVS.

Gruber you know; at a hearing to discuss the Vermont report, the Obamacare architect was confronted by a letter from a former state senator, who argued that any Hsiao-Gruber type health care mega-system will inevitably lead to coercive mandates, ballooning costs, increased taxes, bureaucratic outrages, shabby facilities, disgruntled providers, long waiting lines, lower quality care, special interest nest-feathering, and destructive wage and price controls.” In response, Gruber wisecracked: Was this written by my adolescent children by any chance?”

Hsiao and Gruber promised that single-payer health care in Vermont could save $1.6 billion over ten years. With that endorsement in hand, Shumlin and the legislature passed Act 48, a law instructing the state to figure out how to finance a single-payer system. They dubbed it Green Mountain Care. If Vermont gets single-payer health care right, which I believe we will, other states will follow,” pronounced Shumlin. If we screw it up, it will set back this effort for a long time. So I know we have a tremendous amount of responsibility, not only to Vermonters.”

Spoiler alert: they screwed it up. But think of it like one of those murder mysteries where the victim gets shot in the first scene; the real story lies in what led to the poor slob's demise.

1. Vermont insisted on platinum-plated insurance coverage

The market-oriented way to bring prices down is to give consumers more control of their own health care dollars, like they have in every other aspect of the economy. If you as an individual control the money, you're going to shop around for the best combination of quality and price. If somebody else is paying for the care, you're less likely to care about how much anything costs.

Unfortunately, that basic insight is anathema to the progressive left. Single-payer advocates believe, on principle, that health care is best when it is free to the patient at the point of care.” On the back end, of course, you pay for it in taxes, and in between the government decides whether or not you should be allowed to have that knee replacement or that mammogram. This is what we call rationing.

Sure enough, the Vermont plan insisted on not merely gold-plated health insurance for all Vermonters, but platinum-plated health insurance. As a point of comparison, the Bronze-level plans on the Obamacare exchanges have an actuarial value of 60 percent: meaning, for every dollar in health costs that a policyholder incurs, the insurance company will plan to pay 60 percent, and the patient will pay 40 percent in the form of co-pays, deductibles, and the like. Silver plans, used as the benchmark for Obamacare's subsidies, have an actuarial value of 70 percent; Gold plans, 80 percent; Platinum plans, 90 percent.

According to Hsiao and Gruber, the actuarial value of the average Vermont private plan was 87 percent in 2011. The Hsiao-Gruber calculation of single-payer savings assumed that Green Mountain's actuarial values would also line up at 87 percent. But instead, the Vermont plan mandated an actuarial value of 94 percent—more generous than even the costliest Obamacare plans.

In a post-mortem presentation on December 17 by Michael Costa, Shumlin's deputy director for health care reform, Costa said that Vermont, out of desperation, considered the idea of reducing the required actuarial value to 80 percent—the Obamacare Gold” tier—but couldn't stomach the idea of offering Vermonters such poor” benefits. It would be a step down in benefits for many Vermonters,” said Costa.

2. ‘We can move full speed ahead…without knowing where the money's coming from'

In other words, not only would Green Mountain Care cost more by covering more people than Obamacare, it would cost more by forcing everyone to obtain more financially generous coverage than people currently have. Is it any wonder that the costs of such a plan were prohibitive?

But Vermont's single-payer religionists were not to be deterred. We can move full speed ahead with what we need without knowing where the money's coming from,” assured Anya Rader-Wallack, Shumlin's special counsel for health care reform.

But not forever. Shumlin postponed issuing a report on the plan's proposed costs until January 2013, a few months after the 2012 elections. When the statutory January 2013 report date arrived, the governor refused to produce the mandate report,” chronicles John McClaughry in an excellent write-up of the episode. 2013 came and went. It got so bad that a Democratic state representative, Cynthia Browning, sued the governor to force the release of the report. (She lost.)

In 2014, Republican Scott Milne ran against Shumlin and his single-payer plan. I said during our debates: the difference between Peter Shumlin and Scott Milne is that I will tell you before the election that single payer is dead.”

The long-awaited report has still not been published. Shumlin defeated Milne in deep-blue Vermont by 2,095 votes, a mere 1.1 percent of the electorate. Would Milne have won if Shumlin had been more transparent about Green Mountain's costs?

3. The Vermont plan would have required a 160 percent tax increase

The Shumlin administration, in its white-flag briefing last week, dropped a bombshell. In 2017, under pre-existing law, the state of Vermont expects to collect $1.7 billion in tax revenue. Green Mountain Care would have required an additional $2.6 billion in tax revenue: a 151 percent increase in state taxes. Fiscally, that's a train wreck. Even a skeptical report from Avalere health had previously assumed that the plan would only” cost $1.9 to $2.2 billion extra in 2017.

In 2019, Costa estimated that Green Mountain Care would have required $2.9 billion in tax revenue vs. $1.8 billion under pre-existing law: a 160 percent increase in revenue.

Costa-Vermont-2.png And the Shumlin administration was already backtracking from raising that kind of levy. After small businesses pushed back against a proposed 11.5 percent payroll tax, Gov. Shumlin promised to offer a grace period to businesses with fewer than 100 workers. That would have reduced Green Mountain funding by another $500 million or more, according to Costa, funding that would have to be made up in taxes elsewhere.

A big part of the reason why the Vermont plan was so expensive is because it tried to replace federally-subsidized insurance with state-subsidized insurance.

Today, over 150 million Americans receive employer-sponsored health insurance that is heavily subsidized by the federal government, because workers don't pay income or payroll taxes on the value of their health coverage. The Vermont plan would have forced local businesses to offer the single-payer plan, financed by the new payroll tax, and substantial premiums for workers.

Under Obamacare, if you qualify for insurance subsidies, your income has to be under 400 percent of the Federal Poverty Level, or $46,680 for a childless adult. For example, if you make $45,000 a year, Obamacare will subsidize your premiums once you've paid 9.5 percent of your income—$4,435—yourself.

The Vermont plan applies the same subsidy standard to all state residents. In other words, if you make $70,000 a year, you'd have to pay $6,650 in premiums before state subsidies would kick in. That is to say, you'd lose a large insurance subsidy and pay far more in taxes for the privilege. In what counts for mercy, no Vermonter would have to pay more than $27,500 a year in premiums before gaining coverage.

4. Hospitals and insurance companies had every reason to fight the plan

So if you're going to offer every Vermonter more generous insurance coverage than they currently have, and somehow make the math work, you have to do two things: (1) raise taxes, and (2) pay doctors and hospitals less. We covered #1 above, now let's talk about #2.

The Green Mountain plan sought to require hospitals and doctors to accept Medicare-like reimbursement rates for their privately-insured populations. Because private insurers pay providers more than Medicare does, this would have amounted to a 16 percent cut in payments to doctors and hospitals, according to the analysis by Avalere Health. Needless to say, the doctor and hospital lobbies weren't big fans of the Vermont plan, and fought furiously to sink it.

Avalere-Vermont.png This isn't to say that Shumlin and colleagues were wrong to seek lower prices for health care services. Health care in America is far too expensive. But brute-force price controls are going to face understandable resistance from these powerful interests.

This is where single-payer crashes on the rocks, both at the state and national level. The nearly $1 trillion U.S. hospital industry is not going to sit around quietly and let single-payer advocates impose price controls. This is good if you oppose single payer. But a word of warning for conservatives: hospitals have lobbied as furiously in favor of Obamacare, because it spends more money on them, as they have against single payer.

And we haven't even started talking about the local health insurance industry, which would have been practically abolished by the Vermont plan. Understandably, health insurers weren't too fond of that idea.

The point here is that you might want to believe that Vermont's single-payer plan failed because it was unpopular with the voters. But an equally big factor was how unpopular it was with the health care industry.

5. Other cost savings weren't going to materialize

Michael Costa's briefing outlined several other rosy scenarios from earlier estimates that didn't pan out. Vermont originally assumed that the state would receive $267 million from Washington in the form of an Obamacare waiver. The revised estimate was only $106 million.

They originally estimated $637 million in state Medicaid funding; that number had to be reduced by $150 million due to budget constraints. The ongoing recession reduced Vermont tax revenues by $75 million over the 2016-2017 time frame.

6. The Vermont plan wouldn't have achieved true single-payer

The basic problem with any kind of state-based health reform—right or left—is that the federal government is by far the primary player in U.S. health care. The federal government subsidizes employer-sponsored health insurance to the tune of $500 billion a year, through the tax code. It spends even more on Medicare for the elderly, and finances the majority of Medicaid for the poor.

The Vermont plan aimed to replace employer-sponsored and individually-purchased private insurance with a single, state-run insurer. But the state couldn't preempt Medicare, or military health care, or large companies that directly pay for their workers' health care using a process called self-insurance. Indeed, the Hsiao-Gruber report makes clear that for the Vermont plan to work, the state would need to gain waivers from Medicare, Medicaid, and Obamacare.

In addition, the state couldn't prevent people from getting private health insurance in neighboring states like New Hampshire.

Hence, one of the key purported advantages of single-payer health care—that doctors and hospitals would only have to work with one insurer, simplifying their paperwork—turned out to be impossible.

As it is, Vermont only has three major private insurers: Blue Cross Blue Shield of Vermont, Cigna, and MVP. Because Vermont doesn't have many insurers, and because those insurers have worked hard to reduce administrative costs, Avalere estimated that the Green Mountain plan wouldn't have reduced paperwork by much.

Vermont single payer: An unmitigated failure

What's remarkable, then, about Shumlin's attempt at single-payer health care is not that it failed. What's remarkable is that he wasted the state's time and resources on something that attempted to refute the laws of arithmetic. That's four years Shumlin wasn't spending on making the Vermont economy better for the people who live there. Small wonder that his reelection margin was razor-thin.

If there's one quote that sums up the whole episode, it's the one from Anya Rader-Wallack, declaring that we can move full speed ahead…without knowing where the money's coming from.” Green Mountain Care attempted to offer Vermonters more generous coverage than they currently had, but couldn't figure out how to convince doctors and hospitals to accept pay cuts, nor workers to accept tax hikes.

A few years back, I was in Ohio debating a prominent progressive think-tanker, someone closely tied to President Obama and Hillary Clinton, and a veteran of the health-reform wars. At one point she declared, we will never see single payer health care in the United States.” Other experienced Democrats have said the same thing to me over the years. What those Democrats have learned is that slashing payments to hospitals, doctors, and drug companies—the only way to finance single-payer coverage—is politically impossible.

The temptation among conservatives is to do a victory dance of the I told you so” variety. But that would be a serious mistake.

Hospitals and other industry stakeholders love Obamacare because the law expands coverage without cutting costs. The law basically accepts what hospitals and doctors are paid now, and simply writes a check to cover those costs for people who are uninsured. For-profit hospital chains like Tenet, Community Health, and HCA are enjoying record profits under the new health law.

As my colleague Bruce Japsen notes, Tenet just announced that it will be the presenting sponsor of the fourth annual Clinton Health Matters Activation Summit,” during which you can be assured that Tenet will not be complaining about Obamacare, but rather enthusiastically supporting it.

In other words, the same health-industry forces arrayed against single-payer in Vermont will be arrayed against a repeal of Obamacare by Republicans.

So, no. Obamacare won't hasten the arrival of single-payer health care in the U.S. But it will retard the arrival of truly affordable health care for most Americans.

To quote your own, earlier response to the article posted from New Republic, "I also believe nothing from partisan rags like ..." Forbes doesn't like the idea of single-payer healthcare -- big surprise! And big whoop. "Try to find an unbiased source next time."

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To quote your own, earlier response to the article posted from New Republic, "I also believe nothing from partisan rags like ..." Forbes doesn't like the idea of single-payer healthcare -- big surprise! And big whoop. "Try to find an unbiased source next time."

And yet, the Forbes article was more accurate than anything else posted.

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Specializes in Critical Care.
And yet, the Forbes article was more accurate than anything else posted.

It actually was pretty accurate which makes me wonder if you actually read it. The Vermont plan initially proposed changing to quasi-single payer, which then transitioned into universal coverage by just subsidizing private for-profit insurance coverage which isn't "hybrid" or any other variation of single payer. It's when that transition occurred that the prices went up, which makes sense when you look at what we know about the cost of having for-profit insurers administer insurance vs public coverage. The article actually goes out of it's way, twice, to point out to anti-single payer conservatives that what happened in vermont doesn't bolster their opposition to single payer: "The temptation among conservatives is to do a victory dance of the I told you so” variety. But that would be a serious mistake."

The administrative costs of both for-profit and public insurance administrators are legally reportable, we know what the costs are for both and we know that it's much higher with for-profit insurers. Are you tying to argue that this isn't actually true, or that it's worth the additional cost?

You seem opposed to both for-profit and public insurance coverage, so what would you prefer? Basically, we've got a $3 trillion healthcare bill to pay every year, and because of the wide variations in how much care we each rack up to create that bill, some form of insurance or other payment pooling is unavoidable, which requires some entity to manage that. How would you suggest we go about paying that bill? Personally I'm all for not overpaying for the same service that I can get for a better price.

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Specializes in Mental Health, Gerontology, Palliative.
@Tenebrae, BSN, RN But, I thought Obamacare was going to solve all that? What happened?{/quote]

Its going to take more than one set of legislation to fix your healthcare system. Any system that would see its citizens choose to die on the other world; because coming home to the US would run up bills worth hundreds of thousands of dollars in debt is fairly ******.

Obamas legislation is a good start however it doesnt go nearly far enough

You folks do realize that the USA has a population of well over 300 million.

And, whats this got to do with anything?

Our population is significantly larger than that of any of other country offering single payer.
Basic maths for you.

If you have 100 people paying $10 tax each, you have $1000 pool. Lets say you have 100,000,000 paying $10 tax there is a tax pool of $100,000,000. So bigger numbers doesnt necessarily mean less money

We pay tax. A % goes into health, education, welfare etc

As it is in England care is substandard( research it) and people with money pay out of pocket for quality care, so as not to wait 10 months for surgery.

Not all of it by a long shot, although from the sound of it, its been going down hill recently due to the actions of the current administration.

I'm using personal examples as to not do the whole privacy violation thing

Just before Christmas I ended up with a skin infection under my left arm and with a large axillary abcess. I had a six day stay in hospital. For all of the six days I had IV antibiotics QID. I had regular analgesia. The stay also included two ultrasounds, four blood tests. I had surgery on day four, full incision and drainage under general anaesthetic. Also had district nursing when I went home, as the location of the wound was in too much of a hard place to dress myself. Total cost of the entire stay and follow up home visits, $12-14 for discharge antibiotics.

Time I had to wait? The infection started on a Friday. It got worse on the Saturday, cost of the emergency doctor, Nil. I went back to the emergency doc on Sunday and was admitted to hospital the same day. I had to wait four days for surgery however that was due to clinical indications eg despite having severe oedema in the infected area, there was no drainable abscess present until day four of my stay.

Friend diagnosed with breast cancer. Had surgery within 2 weeks, had chemotherapy and radiation promptly and is now cancer free. Cost to her $0

Another friends dad diagnosed with cancer which regretfully turned out to be terminal. His acute healthcare, palliative care and end of life care was covered under the system cost to his widow and children. Nil.

I could go on. I do alot of work in oncology/palliative and end stage care. Repeatedly our system takes care of these people so they can focus on whats most important trying to beat their cancer or in palliative cases make the most of the time left to them and not having to stress on how the hell they can possibly hope to pay their hospital bill

As I said, who's going to pay for it and how do you as a healthcare provider expect to be paid under single payer?

I'm paid and paid well under a single payer health system. I could be paid more however cant we all?

Admittedly our system is far from perfect however I have the reassurance that should I end up in a debilitating injury, recovery and rehab costs are covered. Should I end up with a terminal illness, my medical care and palliative care will also be covered so I'm not leaving a legacy of debt to my loved ones

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