Vermont May Lead U.S. to Single Payer Health Care

Montpelier, Vermont — Chances are you've never heard of Peter Shumlin, who last month was sworn in as the 81st governor or Vermont. That's about to change. If Shumlin makes good on a signature campaign promise, he might end up as well-known and beloved in the United States as Tommy Douglas is in Canada.

OK, maybe you've never heard of Tommy Douglas, either. A former Baptist preacher and member of the Canadian parliament, Douglas is considered the father of Canada's popular government-run medical insurance program.

If you're surprised to learn that Canadians like that system, it's probably because you've been convinced otherwise by a years-long propaganda campaign from American insurers -- a campaign I used to help carry out as an industry PR executive.

But according to 2008 Harris Interactive polls in ten developed countries, Canadians were among those most satisfied with their health care system -- while Americans were the least satisfied. Speaking of polls, in 2004, 18 years after his death, Tommy Douglas was named "The Greatest Canadian" of all time in a national contest conducted by the Canadian Broadcasting Corporation (CBC).

Shumlin is hoping to do in Vermont what Douglas accomplished first as premier of Saskatchewan -- implement a publicly-financed system that guarantees universal access to medical care and controls costs better than private insurers. If Shumlin pulls it off, other states undoubtedly will attempt the same thing, just as other Canadian provinces followed Saskatchewan's lead.

Multi-Payer Heath Care System Found to Fuel Inflation

Toward the end of his nearly two decades in the Vermont General Assembly, Shumlin concluded that the uniquely American multi-payer system of private health insurance firms was actually fueling medical inflation and thwarting the state's efforts to provide coverage for all of its citizens. It was an unsustainable system, he believed — one that would not only force more Vermonters into the ranks of the uninsured, but would ultimately bankrupt the state.

So Sumlin did something about it. As president of the Vermont Senate, he co-sponsored legislation last year that may eventually help reduce, if not eliminate, private health insurers in the Green Mountain State, at least in providing coverage for basic medical care.

As a result of that groundwork, lawmakers were presented with three options in January that would radically change Vermont's health care financing system. One of those options: a state-based, tax-supported single payer system, similar to the one Tommy Douglas pioneered in Saskatchewan in the 1960s.

A second option would create a public insurance plan to compete with private insurers. Such an idea was considered by Congress but never made it into the final reform bill in Washington because of intense opposition from the insurance industry.

Vermont's third option would be a single-payer system with a twist. The state would create an independent public board to oversee the health care system, and the board would contract out the administration of claims. The claims administrator could be either a public or a private entity. Private insurers could compete for this largely clerical work, as they have done for years to administer the Medicare program.

The consultants hired by the state to develop the recommendations -- led by Dr. William Hsiao of the Harvard School of Public Health -- told lawmakers they favored option three in part because it was likely the most politically feasible. They estimated that option three could save the state at least $580 million yearly, though some have challenged the numbers.

As the state's new governor, Shumlin last week presented his own health care reform plan to the legislature, based largely on that third option.

Republicans Starting to Support Single-Payer System

Insurers have urged lawmakers not to rush, but otherwise haven't had much to say, opting instead to let their business allies lead the attack. Last week, John O'Kane, an IBM lobbyist, said in a letter to the House Health Care Committee that his company was opposed to any single-payer proposal. He said IBM planned to continue offering medical coverage to its Vermont employees and wasn't interested in paying additional taxes to help the state achieve universal coverage.

The letter hinted that the company, the state's largest private employer, might have to reduce its work force or even close its operations if a single-payer system was adopted.

Shumlin knows there are more attacks to come, but believes he was elected to implement the plan, which has broad support in the legislature. Among the Republican supporters is Rep. Francis "Topper" McFaun of Barre, who a few years ago sponsored a bill to provide public insurance for hospital care.

Late last week, Rutland Mayor Christopher Louras, also a Republican, surprised lawmakers in urging adoption of single-payer legislation, arguing that the current system was more than a little broken.

"The only way to fix the problem is to blow it up and start over," he said, noting that Rutland's health care costs would consume $3 million of his city's $7 million payroll in 2011.

Back in Montpelier, Shumlin and the legislators know that implementing their plan won't be easy -- not just because of industry opposition, but also because they will need permission from the federal government to proceed. The health care reform act signed by President Obama last year contains a provision barring states from reform this radical before 2017 without Congressional approval. Obama announced Monday, however, that he supports amending the law to allow states more leeway to experiment by 2014 if they have reform proposals that can provide coverage for the same number of people at the same or lower cost.

Vermont's entire Congressional delegation -- Senators Patrick Leahy and Bernie Sanders, and Rep. Peter Welch -- supports Shumlin's efforts and they have already begun the process of requesting a waiver.

Considering the President's willingness to cut states some slack and the hundreds of waivers the government already has granted to insurers and corporations from various provisions of the law, they might just get the waiver they're seeking.

Vermonters were the first to abolish slavery in the United States. Many folks here, including the freshly-minted governor, are determined to be the first to abolish private health insurers, just as Canada did under Tommy Douglas' leadership several decades ago.