Consultant gives report to Vermont lawmakers spelling out path to single-payer system

 

By Dave Gram

MONTPELIER, Vt. (AP) - Vermont could provide every resident with health insurance, upgrade outdated hospitals and still save money if would just consolidate its "chaotic" health insurance industry into a single-payer health care system, a health consultant told state lawmakers Tuesday.

Harvard health care economist William Hsiao was hired by the state Legislature to come up with three possible designs for a new health care system. He said getting one entity to process claims, reforming medical malpractice and taking other steps would save $2.1 billion in health spending by 2025.
Hsiao said that Vermont faced no fewer than 15 hurdles before it would be able to implement the plan crafted by him and 23 team members, including restrictions contained in the federal health reform bill passed last year and the need to obtain federal waivers.
But he predicted that, within five years, there would be a new push to go beyond last year's reform at the federal level.
"If Vermont is successful in designing and implementing health care reform based on our recommendations, it will be seen as a leader in resolving the most important domestic policy issue of our time," he said.
Hsiao, who designed Taiwan's health system and has worked on those in eight other countries, defined single-payer as "a system that provides insurance to every Vermont resident with a common benefit package and channels all payments to providers through a single pipe with uniform payments rates and common claim processes and adjudication procedures."
Medicare benefits for the elderly and permanently disabled would be unchanged for those beneficiaries, he said, though their doctors and other providers would be paid out of the single-payer system.
The system covering all Vermonters would provide what Hsiao called an "essential benefit package," paying at least 87 percent of each Vermonter's medical and mental health expenses and 77 percent of his or her drug expenses. He said those targets were derived from the averages now covered by private plans.
He said the system would expand coverage for dental and vision over levels offered now, emphasize prevention and primary care, and provide "financial risk protection" against catastrophic health expenditures that otherwise can cause impoverishment.
If it could clear all the hurdles listed by Hsiao and run the gauntlet of concerns sure to be raised by insurers, hospitals and others, Vermont would be the first state to adopt the sort of single-payer health care system long seen as a key goal of the American left.
First-term Gov. Peter Shumlin, who made the creation of such a system a cornerstone of his campaign, said Wednesday that he wanted a system that would "provide universal access, contain costs and treat health care as a right and not a privilege."
Shumlin was president pro-tem of the Senate when the Legislature hired Hsiao last year. In their first phone conversation, Hsiao told him he had "given up on America," Shumlin recalled.
"I told him we are Vermonters," the governor said. "We think independently. We take care of each other, and we do things that others dare not do."
Hsiao said the system he envisioned would include at least two key components:
— An independent board, set up to minimize the influence of politics and lobbying over its process, that would set reimbursement rates each year for doctors, hospitals and other health providers. The board would be made up of provider and consumer representatives who would negotiate with each other and make recommendations to the Legislature.
— A single entity to process insurance claims and adjudicate disputes. Hsiao said the state could hire a private company to handle this task or create a quasi-public agency to bid against the private ones and help keep costs low.