No single-payer healthcare for Vermont

December 18, 2014 7:03 AM

Governor Shumlin announced he would not pursue single-payer healthcare for his state. Reasons include high costs, high complexity, and Shumlin barely eking out reelection.
posted by doctornemo (55 comments total)

Speaking as a resident of Illinois, that's too bad - I see Vermont as being more similar to the small European countries that run relatively successful state healthcare programs than most other places in the US. (At least, there's no way Illinois would be a good place to start trying this.) I would have liked to have seen the results of that experiment. But, I am sure that a lot of regular people are relieved to not have to shoulder that financial burden.
posted by michaelh at 7:10 AM on December 18, 2014 [2 favorites]

Tl;dr: Lying liar politician, knuckling under to big business again, Coincidentally finds out his numbers don't add up just weeks after He wins election promising healthcare reform.
This asshole should be impeached.
posted by Chrischris at 7:17 AM on December 18, 2014 [17 favorites]

So his reasons are basically the exact opposite of actual experience in other single-payer healthcare states/countries?
posted by blue_beetle at 7:17 AM on December 18, 2014 [14 favorites]

Win Smith, owner of Sugarbush Resort in the Mad River Valley, said business owners like him are breathing a collective sigh of relief. Smith says a payroll tax on the order of 11.5 percent would have increased costs by nearly 75 percent.

Math does not check out.
posted by sophist at 7:21 AM on December 18, 2014 [22 favorites]

Math does not check out.

60% of the time, it works every time.
posted by Ice Cream Socialist at 7:26 AM on December 18, 2014 [18 favorites]

There goes my plan to move to Vermont and live off of maple syrup and hospital food!
posted by srboisvert at 7:30 AM on December 18, 2014 [6 favorites]

As a resident who has been supporting this, I'm very disappointed. Vermont has a lot going for it in this sort of initiative. It also has some severe challenges, one of which is being a relatively poor state with an aging population and a resulting disproportionately small working class. The numbers that were published are indeed worse than had been previously speculated. I was expecting that for a business and situation like mine (white collar, already have good health care plan) it would be a wash or even a slight savings to my employer - as compared to a small retail business that doesn't currently offer health care. But, these numbers would have been a significant jump in costs to us as well.

I sort of don't get it, as Vermont already has pretty broad coverage under the current systems. Shouldn't adding more people and reducing the bureaucracy make it more affordable? In any case, politically Shumlin was out ahead of most of the both sides of the aisle on this. He had a lot of rope, I guess he decided he was hanging himself with it. I think there will be some outrage, but more relief here in Vermont. Which is unfortunate.
posted by meinvt at 7:31 AM on December 18, 2014 [4 favorites]

Another disappointed Vermonter checking in. Single Payer was a significant part of why I moved up here, and it's disheartening to see it dropped so suddenly. No one was under any illusion that it would be a smooth transition or that it would necessarily bring cost savings to everyone, but I was expecting to see a savings on overall healthcare expenditures at the very least.

This was such a central tenet of Shumlin's entire administration, it will be interesting to see where he goes from here. At least we can keep moving in the direction of "affordable" coverage for everyone.
posted by GetLute at 7:47 AM on December 18, 2014 [1 favorite]

Without having the time/access/expertise to go over the numbers, this seems like a counterintuitive result to me. My understanding is that there's every reason for a single payer system to be cheaper and more efficient (and simpler) than an insurance-based solution, especially in the long run once the overhead of the switch has been absorbed.

So it seems to me that either Vermont is balking at actually having to pay to provide a full and proper standard of healthcare, having uncovered areas that were simply not being covered before due to e.g. people being dissuaded from seeking necessary treatment; or the numbers are wrong, either through simple incompetence or in order to scupper the initiative; or someone somewhere in the process is balking at the fact that it involves "higher taxes" even though the overall costs are lower due to the reduced/eliminated need for insurance.

I'd be interested to read a deeper analysis of the numbers to see if any of those are true.
posted by Drexen at 7:47 AM on December 18, 2014 [1 favorite]

and Shumlin barely eking out reelection.

Goddammit, why is it that the ones with good ideas are all, "Well, I don't know if this is a mandate..." but the lunatics take any gerrymandered, court-handed, voter-suppressed, 36-percent-turnout bullshit victory as license to do fucking anything?
posted by Etrigan at 7:50 AM on December 18, 2014 [43 favorites]

Wow. 11% payroll tax and a 9% top marginal state income tax is a lot. And that didn't pay for medicare or employees of large corporations?

Maybe its a scale issue? Vermont at 700k people or whatever it is simply couldn't force suppliers to reduce prices enough to make the math work.
posted by JPD at 7:55 AM on December 18, 2014 [1 favorite]

Very disappointing news
posted by Flood at 7:58 AM on December 18, 2014

Win Smith, owner of Sugarbush Resort in the Mad River Valley, said business owners like him are breathing a collective sigh of relief. Smith says a payroll tax on the order of 11.5 percent would have increased costs by nearly 75 percent.

Math does not check out.

If right now he pays 5% payroll tax and they increase it to 10%, his tax burden has increased 100%, right? Maybe it's just bad wording?
posted by maryr at 8:02 AM on December 18, 2014 [3 favorites]

It's too bad Vermont can't just opt-in to the Quebec healthcare system.
posted by Flashman at 8:03 AM on December 18, 2014 [1 favorite]

It's too bad Vermont can't just opt-in to t̶h̶e̶ Quebec h̶e̶a̶l̶t̶h̶c̶a̶r̶e̶ ̶s̶y̶s̶t̶e̶m̶.
posted by Wordshore at 8:09 AM on December 18, 2014 [5 favorites]

I was going to argue that Vermont needs more jobs, that the state doesn't have a lot of ways to bring new businesses in besides maybe some brand recognition and proximity to Canada, and that this tax would have prevented businesses from coming to the state...but holy shit, the state's unemployment rate is only 4.4%. How the hell did that happen?
posted by maryr at 8:09 AM on December 18, 2014 [1 favorite]

Wordshore, I think you overestimate Vermonters opinions of Quebec.
posted by maryr at 8:10 AM on December 18, 2014 [4 favorites]

maryr, remember that the unemployment rate only reflects those looking for work who can't find it. Our share of workforce is just that much smaller. It's a great place to live, but despite the low unemployment rate, incomes remain low. And there is little evidence that is because of business owners getting filthy rich on the backs of the workers. It's just a plain-old smaller economy. Can we do better? Yes, of course. But we also have less financial buffer for really big government screw-ups like other states seem to regularly absorb, and that makes for a small 'c' conservatism when approaching new initiatives.
posted by meinvt at 8:18 AM on December 18, 2014 [1 favorite]

I sort of don't get it, as Vermont already has pretty broad coverage under the current systems. Shouldn't adding more people and reducing the bureaucracy make it more affordable?

Two words: Aging population. The numbers won't work unless there's a good lot of strapping young Vermonters paying in and not using the services. Old folks, well Logan's Run may have had something there.
posted by Gungho at 8:20 AM on December 18, 2014 [2 favorites]

It's a great place to live, but despite the low unemployment rate, incomes remain low.

Higher than the US average. (Not sure if this is up to date, or how large a percentage of the state it would affect, but it seems self-employed are unduly burdened as well.)
posted by IndigoJones at 8:27 AM on December 18, 2014

So how much did the insurance industry pay for this little switcheroo?
posted by Faint of Butt at 8:30 AM on December 18, 2014 [2 favorites]

meinvt: That's why I was so surprised to see such a low unemployment rate. My brother and sister have both had significant un- or under-employed periods in recent memory.
posted by maryr at 8:38 AM on December 18, 2014

So how much did the insurance industry pay for this little switcheroo?

The plan was to have private insurance premiums paid for out of public money. The level of private insurance would have been the insurance of a Tahitian prince. I bet the insurance industry was salivating at the mouth to basically take 15% of all health spending as profit.
posted by Talez at 8:40 AM on December 18, 2014 [1 favorite]

"The plan was to have private insurance premiums paid for out of public money"
This is why single payer is STILL a half measure. Insurance companies are still middle men.
posted by jetsetsc at 8:54 AM on December 18, 2014 [4 favorites]

IndigoJones - cost of living is also higher than US average. I'm working on finding a better source, but here's a fun calculator if you want to see what you'd need to live in Burlington. Here's the closest thing to a map or list of come up with so far.
posted by maryr at 8:56 AM on December 18, 2014 [1 favorite]

Insurance companies are still middle men.

Not that I'm not with you on throwing out the middle men and all, but honestly, how would you administer a single-payer system without leaning, at least a great deal if not mostly, on an existing health insurance system? Yes, the drive to pad for their bottom line would be enormous but that's why single-payer legislation should be carefully crafted (with hard caps and inflation-dependent caps for rate rises built into the bill itself), not just 'Welp, time to scuttle Humana and Kaiser! Later, suckers!'

I mean, if you've got an alternative* I'd seriously, authentically want to hear it - as I've no love at all for the likes of Humana and Kaiser.


*-Basing it on the VA model is not an alternative
posted by eclectist at 9:38 AM on December 18, 2014

It turns out almost all those COL calculators use the C2ER data, which are garbage unless you're an executive. They say the average house price in Buffalo is something nuts like $300K, which would only make sense if you're buying a 3000sf new-built house.

I'd recommend just the Consumer Price Index. Burlington is the 31st most expensive urban area, just slightly cheaper than Seattle or Palm Springs and just slightly more expensive than Baltimore or Fresno. It'll still have problems but at least it seems to be based on a representative sample of the population instead of geared towards executives.
posted by ROU_Xenophobe at 9:43 AM on December 18, 2014

They say the average house price in Buffalo is something nuts like $300K, which would only make sense if you're buying a 3000sf new-built house.

Wait, $300K is considered high there?

/me sobs again, some more
posted by psoas at 10:04 AM on December 18, 2014 [5 favorites]

Wait, $300K is considered high there?

I come from Perth and live in the Bay Area. Neither place probably has a house below $300K.
posted by Talez at 10:10 AM on December 18, 2014 [1 favorite]

the only problem that "single payer" solves directly is "insuring" everyone... but then you have everyone in the same insurance pool, either managed by a state entity or an insurance company and all of the other manifold problems the US health care industry faces are still present. What is particularly true for states like Vermont with significant rural poverty is that, even if you have insurance, there aren't doctors to provide care who are accessible, especially as you drill down into specialties. And then there is the inflated cost and cost inflation, either of which require 'single payer' to be a trojan horse for direct state price controls, which are even more difficult politically and economically to manage. And then you have the particular consequences of the pricing system, in which general practitioners have become non-profits or negative-profit (i.e. bankrupt) service providers. Controlling the price system simply from the "payer" without making structural changes to the way health care is provided is probably impossible, von Mises be damned.

If someone had made me health care czar, I would have started by either subsidizing or directly administering general practice clinics while simultaneously drastically reducing the cost of becoming a general practicioner, establishing midwife centered birth and contraception clinics, and built a national system of non-profit health service as the profit based system collapsed under it's own contradictions.

but the fact that 'single payer' will never happen in the US makes it easier to advocate endlessly for it instead of confronting directly the concrete problems of the system, which is still collapsing despite the ACA.
posted by ennui.bz at 11:04 AM on December 18, 2014 [9 favorites]

Wait, $300K is considered high there?

$300K would probably buy my 4-bedroom suburban house and the originally-identical house next door and a Tesla.
posted by ROU_Xenophobe at 11:21 AM on December 18, 2014 [3 favorites]

- I see Vermont as being more similar to the small European countries that run relatively successful state healthcare programs than most other places in the US. (At least, there's no way Illinois would be a good place to start trying this.)

Any reason why you think Vermont would be more successful than, say, Illinois? Demographics? Less corrupt political system?
posted by gyc at 11:36 AM on December 18, 2014 [1 favorite]

Wait, $300K is considered high there?

Where I live you'd have a hard time finding a 700sqft 2 bedroom condo for that amount.

But we do have single payer healthcare, so there!
posted by blue_beetle at 11:54 AM on December 18, 2014 [1 favorite]

It's too bad Vermont can't just opt-in to the Quebec healthcare system.

Amusingly, one of the big reasons why Ontario developed photo ID health care cards was to combat the problem of American border staters doing just that by going for a drive and borrowing a card.
posted by srboisvert at 11:56 AM on December 18, 2014 [4 favorites]

They say the average house price in Buffalo is something nuts like $300K, which would only make sense if you're buying a 3000sf new-built house.

This is because at any given point in time half of all the houses in Buffalo are on fire
posted by srboisvert at 11:59 AM on December 18, 2014 [1 favorite]

the only problem that "single payer" solves directly is "insuring" everyone... but then you have everyone in the same insurance pool

The same way that every other nation with single payer works, yes.
posted by feckless fecal fear mongering at 12:11 PM on December 18, 2014 [1 favorite]

This is because at any given point in time half of all the houses in Buffalo are on fire

The other half are buried under 10 feet of lake effect snow.
posted by maryr at 12:50 PM on December 18, 2014

Any reason why you think Vermont would be more successful than, say, Illinois? Demographics? Less corrupt political system?

Smaller population, like a pilot program.
posted by psoas at 12:56 PM on December 18, 2014

You actually need a bigger population to both get scale on the admin side but also more importantly to have the market power to implement price controls.
posted by JPD at 1:27 PM on December 18, 2014

srboisvert: "This is because at any given point in time half of all the houses in Buffalo are on fire"

No, no, that's in Synecdoche, NY.
posted by Joakim Ziegler at 2:15 PM on December 18, 2014

The main problem is that the plan was to cover everyone to the tune of 94% of their annual health are costs, with only 6% on average out of pocket (for co-pays etc.), without any semblance of really significant cost controls. In other words, have everyone (pharmaceutical companies, device companies, materials supply companies, hospitals, other providers, and doctors) continue what they do under the current American Way of Health Care with exorbitant charges and lack of transparency and a cost structure that now occupies more than 18% of US GDP, and find a way to extend that system to every single state resident. Most of these really disruptive cost controls require a federal level of rules changes, and can't be done at the state level, or require a politically unpalatable radical change in the entire system. At this point, the only way any single payer system could ever be installed in this country would be a complete nationalization (or the state equivalent) of the entire health care apparatus.
posted by perktervt at 4:02 PM on December 18, 2014 [1 favorite]

You actually need a bigger population to both get scale on the admin side but also more importantly to have the market power to implement price controls.

The Canadian province of Prince Edward Island, population 145,211, manages to achieve a single-payer system.

Its governing agency, Health PEI, has a budget of CAD$560,000,000.

That works out to $3856 per resident.

The problems with implementing single-payer insurance in the United States are not about risk pools or cost of living or leverage to control prices. It is, purely and simply, politics.

It is ideological idiocy and regulatory capture. And because of it people are dying every day.
posted by tivalasvegas at 4:59 PM on December 18, 2014 [7 favorites]

Oh. The residents and government of Vermont, with a population of 625,741 in 2013, spent a combined 4.928 billion dollars on health care in 2010.

Four point nine billion dollars.

4,928,000,000.

The same link, from the website of the state government of Vermont, proudly notes that this works out to $USD7,876 per person, lower than the US average of USD$8,402.
posted by tivalasvegas at 5:08 PM on December 18, 2014 [1 favorite]

And, of course, I suspect that's not counting the Medicare costs covered by the Federal government. Or the VA. Or TRICARE.
posted by tivalasvegas at 5:12 PM on December 18, 2014

Surely you can see how being attached a country with single payer makes your PEI example quite specious.

And yes extending medicare is the best path to single payer in the US.
posted by JPD at 6:07 PM on December 18, 2014 [1 favorite]

Surely you can see how being attached a country with single payer makes your PEI example quite specious.

Health care is provincial in Canada. So not exactly specious by normal logic.
posted by srboisvert at 7:55 PM on December 18, 2014 [2 favorites]

Well said srboisvert.

JPD, I want to argue with you but really I think we are generally in agreement as to what should be done (i.e., Medicare for all). I just don't think you are seeing the sheer bassakwardness of the pro-status-quo perspective, to whit:

Sorry, is the problem that PEI is too small, or that Canada is too big?

California has more people than all of Canada. So, taking the other side of the argument, the Golden State should easily be able to implement a single-payer system with a viably diverse risk pool.

My point stands. The United States does not have universal comprehensive health care for the sole reason that its politics is fucked up. It's not an issue of fiscal responsibility (merely having single-payer is far less expensive, let alone the establishment of more socialist systems like the UK's NHS), quality concerns (objective measures like average life expectancy and infant mortality rates show the US currently far behind most OECD nations), risk pools that are too small (cf. PEI, which still spends thousands of dollars per capita less than the US does on health) or problems with equitable access (do I even need to make a parenthetical remark here?)

Medicare For All. Now. It's the least one can do, in fact it will save the vaunted American Taxpayer quite a lot of money. AND FEWER PEOPLE WILL DIE IN THE WEALTHIEST NATION ON EARTH.
posted by tivalasvegas at 9:19 PM on December 18, 2014 [2 favorites]

tivalasvegas: Qatar?
posted by el io at 9:34 PM on December 18, 2014

Oh, are we also counting the wealth of tiny countries which happen to be situated on large underground pools of liquid cash, or which happen to have very loose banking laws?

I live on the north side of Chicago; there are probably more people living within two hours' walk of my house than living in the whole of Qatar or Luxembourg.

Again, my basic point remains. The US can do much better for much cheaper. The only reason I can see for why it hasn't yet done so is because of selfish, ignorant and/or callous politics.
posted by tivalasvegas at 10:50 PM on December 18, 2014

Yes its provincial but all of the provinces do it. That's different. Also wasn't it Ontario that did it first?

But my argument isn't that single payer is bad, rather that using Vermont as some kind of statement on the viability of single payer in the US is wrong. I know you are saying the opposite of that and really we agree that the way single payer works is through price control and that this is a good thing. I'm just saying a state of 700k people with an actual pool probably half that size just simply doesn't have the ability to exert market power t o force price controls. Hence the politically non viable costs required.
posted by JPD at 4:20 AM on December 19, 2014 [1 favorite]

Yes its provincial but all of the provinces do it. That's different. Also wasn't it Ontario that did it first?

Saskatchewan and Alberta, actually, with the federal government creating a framework for all the provinces to participate. Wiki.
posted by feckless fecal fear mongering at 9:30 AM on December 19, 2014

Wow. 11% payroll tax and a 9% top marginal state income tax is a lot.

No it isn't. The average employer health plan costs $6000 per individual and $17,000 per family. If the average household income is $50,000 then these taxes are a bargain compared to employer insurance.

When someone says "Wow, that's a lot" it means they have no idea how much money they are currently giving up for employer insurance.
posted by JackFlash at 12:25 PM on December 19, 2014

Another Vermonter here. While I am disappointed in the decision to not try single payer, I am more disappointed in Shumlin's inability to get real broadband in the state. He (and Bernie Sanders for that matter) promised 100% broadband coverage by 2013, and while they claim there are less than 1% without broadband those numbers come from providers, and they aren't even close to true.

I don't want broadband just because I want to finally be able to watch an occasional video online, but because I think that not having real broadband is one of the reasons Vermont is bleeding young people and unattractive to businesses. Our population is aging, meaning less of a tax base. The school system keeps getting more and more expensive while there are fewer students enrolled, and those who like things the way they are have dug in their heals in the name of local control. If someone like myself, who is childless-by-choice, even mentions that things must change they are branded anti-children. In a small community that is something that can be devastating. Our property taxes are outrageous, and there are very few jobs. Many, many Vermonters have multiple jobs, including myself, just to make ends meet. I honestly can say I couldn't afford to live here should taxes increase. My wife works in New Hampshire, and we have health insurance through her employer

I want single-payer because I think it is the right thing to do, but there are other issues that need fixing before single-payer is a viable option for Vermont. I just hope that Shumlin hasn't damaged the chance of single-payer in the future. His refusal to discuss how to pay for it nearly cost him his job, for sure, but it may have also set back the movement a great deal.
posted by terrapin at 1:24 PM on December 19, 2014

There are perverse incentives in the increasingly service-base US economy, I think, to letting healthcare be a "growth industry" as population increases and public health quality decreases, and lots of "job security" by way of diabetes, high blood pressure, and other cardiovascular and obesity-related issues. The public-policy minded people in government do realize this is a huge problem as do leaders in the healthcare industry, but it's funny because there's a mantra that once "your industry" passes 15-16% of GDP, you completely ruin the economy, so what of the finance industry again? How much of the GDP does it really represent in its hand-wavey, pervasive ways?

I went to a medical software conference years ago where the keynote speech came cross initially as "Whoo hoo, you're in the right career, we're all gonna have jobs forever at the rate things are going with diabetes 'n shit!" The real point was "we're in a position to actually help people and many of us just kind of ended up here, but it's a good time to try to make a difference" but there was an obvious overtone of unlimited career potential, an emerging "Belly Bubble" if you will.

They aren't really incentives in the long run, but the US has become engineered to disregard such concerns and instead to crank out quarterly and shorter-term profits and dividends for the exceedingly few at the expense of nearly every institution, in one way or another, and then our hopes for retirement are sliced and diced into the whole system so that we're all hopelessly invested in it (if we're fortunate to have the sort of job that makes a 401(k) or other retirement plan feasible). In the short run there's a reason nobody has attempted to vastly overhaul this system, it's just easier to keep milking it and for everyone who feels short-changed to charge more (providers), pay less and deny more (insurers), outsource more patients to more aggressive collection agencies, etc, and a WHOLE lot of super-expensive band-aids and duct tape to keep the whole thing moving.
posted by aydeejones at 8:40 PM on December 19, 2014 [2 favorites]

Vox's Sarah Kliff has a very thorough post-mortem for the Vermont single-payer effort.
posted by tonycpsu at 7:55 AM on December 22, 2014 [1 favorite]