Single-Payer Strikes Out in Vermont

Single-payer government funded healthcare-for-all struck out in grand fashion in Vermont. The irony is that Vermont is an extremely liberal state, and to the political left, single-payer is the Holy Grail of healthcare reform. To borrow from Frank Sinatra, if single-payer can’t make there, it can’t make it anywhere.

Single-payer is a system where one entity collects everyone’s insurance premiums and pays everyone’s medical bills. While it could be an insurance company, it will instead be the government since insurance companies can’t forcibly collect premiums (taxes) but the government can. Doctors and hospitals would bill only the government for their services, reducing administrative costs. And of course the same government would be responsible for collecting what are now called insurance premiums, but in this model would be called taxes. The government would decide what medicines and treatments would be paid for, and even who does or doesn’t receive care (rationing). Remember he who pays the piper calls the tune.

Senior citizens and the poor already have their own single-payer systems, called Medicare and Medicaid, respectively. Ultimately a single-payer system for all Americans would simply be Medicare and/or Medicaid for all. Such a plan is ready to be pulled from a Congressional drawer and implemented. Rep John Conyers first introduced the “Expanded and Improved Medicare-for-All Act” (H.R. 676) in 2003 and every year since.

Vermont beat him to the punch with its own plan. Yet it went down swinging, despite the stars being aligned for success. Last week, Vermont Governor Peter Shumlin declared that “now is not the right time” for single-payer in Vermont. Cost estimates were higher than projected, the new tax burden would be “enormous”, risking “economic shock” at the same time that the recession “has tightened our state budget.” All valid concerns that can easily be extrapolated to the country as a whole.

Why should economic realities influence a political agenda? Obamacare was rammed through Congress during a recession accompanied by lies (remember Jonathan Gruber) about new taxes and other sleight-of-hand tricks. Vermont was the perfect state for single-payer to get its foot in the door.

Vermont is as blue as its summer skies, voting for, “Democratic presidents in six of last seven elections; one Democratic senator and one Independent; one and only House representative is Democrat; two of past three governors have been Democrats; Democratic-controlled Legislature,” according to The Hill. The “Independent” Senator, Bernie Sanders, is hardly independent, but instead a “Socialist.” The soil in Vermont is extremely fertile for planting the seeds of socialized medicine.

The Vermont plan was created by two left wing economists, William Hsiao, developer of the current Medicare payment scheme, and Jonathan Gruber, who thinks Vermont voters are stupid. Yet the “trailblazer” plan, as USA Today describes it, went down in flames.

Grand plans, which make perfect sense in the classrooms and faculty lounges of Harvard and MIT often fall apart when economic light shines upon them. Economics such as $2.6 billion in funding, an 11.5 percent payroll tax on business, and a 9.5 percent hike in state income tax on higher earners were the inconvenient realities of Vermont’s single payer scheme. “All told the price tag for a single-payer system was now estimated to be $2.6 billion in a state with revenues totaling about $2 billion a year.” How did the Ivy League economists miss this minor detail?

With the government as payer calling the tune, there are non-financial implications as well. How about access? Just look across the pond to see how a single-payer system is working in the UK. “The number of people waiting for NHS treatment has hit three million for the first time in six years,” according to The Guardian. And not treatment within days or a week, but within 18 weeks, as the NHS goal. Wait four months for treatment and you will either be better or dead.

The silver lining in the Vermont experiment is a demonstration of the benefits of Federalism. Supreme Court Justice Louis D. Brandeis wrote in 1932, “That a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” Which is exactly what Vermont did. The experiment failed, perhaps in hindsight for obvious economic reasons, but at least they tried. Alfred Lord Tennyson observed, “It’s better to have tried and failed than to live life wondering what would’ve happened if I had tried.”

The fifty states are the perfect “laboratories of democracy” as Mitt Romney told us. What if all fifty states developed their own schemes of providing affordable, efficient, and quality healthcare to their residents? Some might work, others not, but this is how we learn what works and what doesn’t. Instead we have a one-size-fits-all plan, foisted on us by a bunch of Jonathan Grubers. If everyone was told they had to use a slide rule, who would have invented the personal computer?

Brian C Joondeph, MD, MPS, a Denver based physician, is an advocate of smaller, more efficient government. Twitter @retinaldoctor.