There’s a good article at The Atlantic on Vermont’s statewide experiment in healthcare reform that you might want to take a look at. Vermont is in the process of implementing a single payer system. Here are its broad outlines:
The program was designed by Harvard economist William Hsiao, who detailed the plain in a 2011 Health Affairs article. Hsiao projected the state would save 25.3 percent annually in total healthcare spending, lower household and employer healthcare spending, job growth, and higher economic output for the state. The savings would come from lower administrative expenses, reduced fraud and abuse, eliminating middlemen, malpractice reform, and governance improvements. These savings, about $4.6 billion over the first five years, would be plowed back into paying to cover the uninsured and expanding benefits and services leaving $2.3 billion in residual savings. The law also created the Green Mountain Care Board, an independent group charged with overseeing the law and ensuring quality. What the plan didn’t do is lay out how the state government would pay for its increased spending.
Under the new system nearly all of Vermont’s residents would be enrolled in Green Mountain Care. It would, in effect, become the sole healthcare insurer in the state and employers and other purchasers of insurance would substitute taxes paid to the state for premiums paid to insurance companies.
Vermont is a very nearly perfect Petrie dish for such an experiment. It is small (both geographically and in terms of population), extremely homogeneous, and economically diverse. It has a higher household income than the country does nationally, a lower unemployment rate, and a higher average level of academic attainment than the country does nationally.
The state’s largest private employer is IBM which has a manufacturing facility in the state. Vermont doesn’t have a large presence of big companies, an advantage in implementing a plan of this sort since most such companies self-insure and companies that self-insure are likely to resist any plan like Vermont’s.
Importantly, Vermonters are more favorably disposed towards government services (and taxes) than is the case in many states.
The entire approach is still in its infancy, more an idea than an actual plan. If a single payer plan can work anywhere in the United States, it’s Vermont and success in Vermont would impel other states to imitate the Green Mountain State. Conversely, if Vermont’s experiment with single payer were to fail and, especially, if it were unable to restrain the growth of healthcare costs, it would probably discourage other states from following that path.
First, I am suspicious of a plan developed by a Harvard economist, despite the great work they did in Russia in the 1990s.
Second, if this works is like to send all of Florida’s islanders to Vermont, just to make certain they get the best care available, of course.
1) Hsiao oversaw Taiwan’s development of universal health care. It appears to be working pretty well.
http://prescriptions.blogs.nytimes.com/2009/11/03/health-care-abroad-taiwan/?_r=0
2) We need more of this. Health care is hard. No one knows what will really work. We especially need some red states to try out market based reforms. Texas did malpractice reform, and nothing much changed, but there other ideas that could be tried. Personally, I wouldn’t hold my breath waiting for them.
Steve
When the partisan goggles are removed it’s pretty obvious that Republican governors are no less likely to try approaches that work than Democratic ones are. However, like all powerful people they don’t like to be talked down to, browbeaten, or ordered around. And they may not want to gamble on an unproven strategy that may well increase the costs to their states. Especially in the face of opposition from their states’ voters.
When the partisan goggles are removed it’s pretty obvious that Republican governors are no less likely to try approaches that work than Democratic ones are.
I disagree with the inclusiveness of that statement. There are a handful of R governors who seem to take their job seriously — in doing what is good for their state, not necessarily heeling to the party they are affiliated with — and have been successful in their approaches to governance. John Kasich of Ohio, Chris Christie (of course), former governor of Indiana, Mitch Daniels, Bobby Jindal of Louisana, even Jeb Bush when he was gov. of Florida — all had good records and focused on state issues, whether they involved education, health, and/or pension reforms.
Suppose the system in Vermont works. Does anyone trust the idiots in DC to successfully implement such a program nationally? Afterall, under the most forgiving interpretation the current administration couldn’t even run a website. And Congress failed spectacularly too, as they showed zero competence in their oversight function.
” it’s pretty obvious that Republican governors are no less likely to try approaches that work than Democratic ones are.”
We have Massachusetts and we have Vermont. To the best of my knowledge we have no Republican governors who have a plan in the works, but maybe I missed someone. Which GOP governor is working on market based health care reform?
Steve
Vermont passed guaranteed issue and community rating in 1992, and by the late 90s, insurers began leaving Vermont. Special legislation for Blue Cross Blue Shield of Vermont (62% of current market) kept them from bailing. The individual market shrank below the national average, as it became an unaffordable, high-risk pool (there was no individual mandate). The program did not reduce the percentage of uninsureds, but increased the use of associations through which small businesses could join to obtain insurance exempt from community rating.
Basically, Vermont experienced a partial death spiral that simplified the market, and possibly made future government intervention easier, particularly once the national individual mandate provides a fresh pool of healthy individuals to the plan.
States that experimented with guarantee issue are Kentucky, New Hampshire, Washington, Maine, Massachusetts, New Jersey, New York and Vermont.