What The Death Of Single Payer In Vermont Says About Health Reform

Isaiah J. Poole

Not surprisingly, the right-wing hot-air blowers are giddy at the news this week that Vermont Gov. Peter Shumlin has abandoned efforts to set up a state-run single-payer health plan in Vermont. “The risks and economic shocks of moving forward at this time are too great,” he conceded in a letter to state residents about “one of the most difficult decisions of my public life.”

But lest the conservative breast-beating gets too exuberant, there is also this news, via the Associated Press, that Arkansas’ conservative “model Medicaid experiment” is in jeopardy. By buying private insurance policies for Medicaid-eligible people instead of adding them to a state-administered Medicaid program, “Arkansas became the first Southern state to expand its Medicaid program in a way that many Republicans found acceptable,” the AP said.

But just as Shumlin found the costs of one state shifting to single-payer too daunting, Republicans are complaining that it’s too expensive to cover low-income people through private insurance plans. Incoming Republican Gov. Asa Hutchinson has indicated he’s inclined to agree and has said he’ll consider abandoning the plan.

All this proves what some progressive leaders have been saying all along about the health reform effort: While the Affordable Care Act has done undeniably good things – some of which are outlined by Council of Economic Advisers chairman Jason Furman in a blog post he wrote today – it should never be viewed as anything other than a first step toward health reform – a first step hobbled by political compromises forced by conservative and big-money interests.

One consequence of those compromises is that a “public option” – a public insurance plan that would compete with private plans – was taken out of the legislation. The expectation was that a public option plan would use its bargaining power, administrative efficiencies and its freedom from having to pander to shareholders or pay outsize CEO salaries to drive down costs across the board.

The public option is itself a compromise; what has proven effective in holding down costs in Europe and other advanced countries is outright price regulation, based on such factors as rigorous cost-benefit analysis of various treatments. “Other countries routinely use cost-effectiveness data to make decisions about health coverage,” writes Aaron E. Carroll, a professor of pediatrics at Indiana University School of Medicine, in a New York Times essay. But the health-care reform law explicitly bars cost-effectiveness research. (Remember “death panels”?)

In the “Paying Till It Hurts” series, The New York Times has been chronicling the consequences of not having reasonable curbs on the ability of care providers, device manufacturers and drugmakers to game the health care system. In the latest installment, Elizabeth Rosenthal writes about a heart patient who received echocardiograms at two different medical facilities, a perfunctory scan that cost $5,500 and a more thorough scan and examination that cost $1,400. But the article notes that “in Belgium, the allowable charge for an echocardiogram is $80, and in Germany, it is $115. In Japan, the price ranges from $50 for an older version to $88 for the newest.”

Rosenthal follows up today with the results of a New York Times/CBS News poll that finds that even as the full effects of the Affordable Care Act make their way through the economy, 46 percent of those polled find that the cost of “basic medical care” is a “hardship.”

One reason is that “newer insurance plans — including policies under the Affordable Care Act — are designed to make sure patients have “more skin in the game,” so they will be more discriminating users of health care.” That is a conservative imperative – that if patients themselves are compelled to be cost conscious, they will become their own regulators in a free market.

But that idea is laughable in a system that is designed to be opaque and at a time when consumers, faced with a health challenge, aren’t in the position to comparison-shop the same way they would when seeking an appliance or entertainment gadget.

It’s noteworthy that the same poll finds that 59 percent favor “a government-administered health insurance plan — something like the Medicare coverage that people 65 and older get — that would compete with private health insurance plans.” And 43 percent would go so far as to support a “single-payer health care system.”

In an essay for Democracy Journal, Yale professor Jacob S. Hacker, who proposed that a “government-administered health insurance plan” or public option be written into the Affordable Care Act, writes that the next big challenge for health care reform is “building support for the improvement and expansion of the inevitably jerry-rigged programs that can pass through America’s polarized and fragmented legislative process.”

He draws parallels between health care reform and the early history of the Social Security Act, another law crippled by political compromise and withering conservative assault. “reformers will discover the same painful truth made vivid by Social Security’s stagnation after 1940: Maintaining the legislative status quo against the forces crying “repeal and replace” is not enough,” Hacker writes. “The reforms launched with the ACA will need to be pushed forward or they will fall increasingly short. Every crucial aspect of the act–the reach and affordability of insurance, the cooperation of states and employers, the promise of federal budgetary savings–will rise or fall on reformers’ ability to strengthen the act to ensure that it delivers on its promises. And, alas, playing offense is harder than playing defense in American politics, particularly in our current polarized climate.”

But play offense we must – to achieve the ideal of universal health coverage that Vermont’s Peter Shumlin was working toward and to move the country away from conservative health care schemes that are doomed to fail.

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