Finally, a state with intelligence and common sense

Amazingly, the US private insurance bureaucracy and paperwork consume one-third (31 percent) of every US health care dollar spent. Hence, streamlining payment through a single nonprofit payer would save more than $400 billion per year

Note: The short of it is that the American health insurance industry is eating our lunch, and laughing all the way to the bank (NYTimes, May 13 2011 – Health Insurers Making Record Profits). We congratulate Vermont's brave Gov. Shumlin for taking the bull by the horns. He and his supporters should be awarded the Congressional Medal of Freedom for standing up to the insurance marauders. The political leadership in states like Texas, with their phony bravado, now look a whole lot smaller next to the Green Mountain State.

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By Rocky Boschert
Financial Editor

* Source: Physicians for a National
Health Program (http://www.pnhp.org)

The U.S. spends twice as much as other industrialized nations on health care, or $8,000 to $9,000 per insured American. We spend almost 20% of our national GDP on health care (the world's highest). Yet our system performs poorly in comparison with other developed economy nations and still leaves 50.7 million without health coverage – and millions more inadequately covered.

The United States is not even in the top 20 nations worldwide for population ratio per doctor. Nor are we in the top 40 nations for number of hospital beds per citizen. And we are third worldwide with a male obesity rate of 32% and 6th place for obese women at 35%, respectively (statistics are from the 2011 edition of the Economist “World in Figures”).

Amazingly, the US private insurance bureaucracy and paperwork consume one-third (31 percent) of every US health care dollar spent. Hence, streamlining payment through a single nonprofit payer would save more than $400 billion per year, enough to provide comprehensive, high-quality coverage for every American, regardless of pre-existing condition and ability to pay.

Enter The Vanguard State

The state of Vermont is a land of proud firsts. This small, New England state was the first to join the 13 Colonies. Its constitution was the first to ban slavery. It was the first to establish the right to free education for all — public education.

Today, Vermont boasts another first: the first state in the nation to offer single-payer health care (Green Mountain Care) which eliminates the inefficient and lobby money peddled insurance companies that most independent experts believe are the root cause of our spiraling health care costs.

In the proposed Vermont single-payer system, all private and public health care providers are allowed to operate as they always have. But instead of the patient or the patient’s private health insurance company paying the bill, the state takes the same amount of money that individuals, either directly or through their employer, would pay for insurance premiums, and pays for the medical care.

It’s basically the same as Medicare for all, except they lower the age of eligibility to the day each citizen is born. The main advantage of the state buying these health care services for the entire population is they can negotiate favorable inflation moderating health care costs, especially with drug companies, and eliminate about 30% of the massive and unnecessary administrative overhead the for-profit insurers impose.

To implement the state’s single payer plan, Vermont hired Harvard economist William Hsiao to come up with three alternatives to the current system. The single-payer system they end up choosing, Hsiao wrote, “will produce savings of 24.3 percent of total health expenditure between 2015 and 2024.”

An analysis by Don McCanne, M.D., of Physicians for a National Health Program http://www.pnhp.org/facts/single-payer-faq, pointed out: “these plans would cover everyone without any increase in spending since the single-payer efficiencies would be enough to pay for those currently uninsured or under-insured. The really good news is that a single payer health plan works, if given a chance.”

Vermont Gov. Peter Shumlin, who signed the bill into law on May 26, declared: “Here’s our challenge. Our premiums go up 10, 15, 20 percent a year. This is true in the rest of the country as well. They (insurance premiums) are killing small business. They’re killing middle-class Americans, who have been kicked in the teeth over the last several years. What our plan will do is create a single pool, get the insurance company profits, the pharmaceutical company profits, the other folks that are mining the system to make a lot of money on the backs of our illnesses, and ensure that we’re using those dollars to make Vermonters healthy.”

Is the Vermont Plan Socialized Medicine?

No. Socialized medicine is a system in which doctors and hospitals work for and draw salaries from the government. Doctors in the Veterans Administration and the Armed Services are paid this way. The health systems in Great Britain and Spain are other examples. But in most of the European countries, Canada, Australia and Japan they have socialized health insurance (like our Medicare) not socialized medicine. The government pays for care that is delivered in the private (both for-profit and not-for-profit) sector.

The Vermont Plan is similar to how Medicare works in this country. Doctors are in private practice and are paid on a fee-for-service basis from a government money pool, instead of private insurance company premiums that skim 20% to 30% off the top. The government does not own or manage medical practices or hospitals.

The term socialized medicine is often used to conjure up images of government bureaucratic interference in medical care. That does not describe what happens in countries with national health insurance where doctors and patients often have more clinical freedom than in the U.S., where insurance company bureaucrats attempt to direct care.

Canada’s single-payer health care system started as an experiment in one province, Saskatchewan. It was pushed through in the early 1960s by Saskatchewan’s premier, Tommy Douglas, considered by many to be the greatest Canadian. It was so successful, it was rapidly adopted by all of Canada and adapted to the needs of each province.

Hopefully Vermont’s health care law will start a similar, national transformation. When Americans are finally tired of the fear mongering and insurance industry lobby money distortions that their cash and carry politicians use to lie to us about our health care system, just replace the word “group” with “state,” you’ve got the health care innovation going on in Vermont.

Fortunately, Vermont is the first state to become an incubator for innovative 21st Century public policy in America. Hooray for State’s rights.