by Mike Smith The Washington Post editorial board recently criticized the details of Sen. Bernie Sanders’ single-payer health care plan. The Post said, “If Mr. Sanders is to close the sale with voters, he must show he has learned from socialism’s mixed history abroad and devised an updated version that will work in the United States. Judging by the sketchy single-payer health-care plan he unveiled just before Sunday’s Democratic debate, Mr Sanders is not up to the challenge.” The Post goes on to assail Sanders’ health care plan because it lacks cost containment details, is overly optimistic about savings and underestimates true costs.
The editorial concludes, “Single-payer systems do indeed have some of the advantages Mr. Sanders touts for his plan — separating employment from insurance being one of them. Yet they all require an authority to tell patients they can’t have everything they want when they want it — just as private insurers must sometimes do in the United States. Honest proponents of the single-payer system level with the public about that. So far, Mr. Sanders has not.”
In an effort to challenge the Sanders plan, it was mentioned in the last Democratic debate that Gov. Peter Shumlin — who is supporting Clinton and not Sanders — failed to make good on his promise to install a single-payer health care system in Vermont. Sanders responded angrily that Vermont’s failure to install single payer was Shumlin’s fault, not his.
And herein lies the problem. When politicians venture into the arena of health care reform, they too often oversimplify the complex, overstate the benefits and blatantly ignore significant disadvantages (I guess, hoping these issues will disappear). It’s no wonder Americans are doubtful about health care plans coming from politicians, especially of late. More often than not, the results are disappointing and costly.
The single-payer effort in Vermont is an excellent example. Governor Shumlin found out, after years of promoting and promising a single-payer system, that implementing it would crush the state’s economy. Of course, he elected to disclose this fact after a very tight election, and not before — a move that underscores the root causes of skepticism among voters and, ultimately, may have dashed whatever hope he had for a fourth term.
Similarly, the state’s health insurance exchange, Vermont Health Connect, was built on a political promise that it would reduce health insurance costs. But since its implementation the cost of insurance continues to rise. So too does the frustration of the Vermonters who have been forced into a government-run program that has cost more than $200 million, taken years longer than promised to build and is still not working properly.
At the end of the day, Americans want three things from their health care system: access, quality and affordability. Vermont does very well in delivering high-quality care, and our system offers almost universal coverage. That’s not the case in all states. But achieving affordability and cost containment is the real issue that has yet to be addressed by leaders.
At all levels, from health care providers, to government and government regulators, there is a failure to achieve true cost containment that brings down health care costs for Vermonters. In fact, some think government regulation is a problem, not a solution, because regulators are too lax and/or too cozy with the health care institutions.
Vermont implemented the Blueprint for Health in an attempt to address chronic diseases that drive about 80 percent of health care costs. Management and prevention of heart disease, high blood pressure and diabetes, for example, can put a dent in the cost of health care. This is an admirable long-term strategy and is needed. But it doesn’t address the immediate need to lower the cost of care, which we should expect to get worse as our economy continues to struggle, our workforce continues to shrink and our population continues to get older.
In his final budget speech, Governor Shumlin promoted the “all-payer” model as a method for containing cost. An all-payer model changes the way doctors and other providers are paid from the current system where payment is aligned with services provided to one that focuses more on outcomes. Or, put another way, this would move our state from the current fee-for-service system — where providers are paid, or reimbursed for each service they provide — to one where they would be given a global budget and required to manage the health of their population to that budget number. Although an all-payer model may, over time, realign incentives more closely to our overall health care goals, the tendency of the governor is to once again oversell the immediate benefits. It cannot be the sole mechanism to keep health care costs in check.
Not unlike the discussion we’re having in education, the cost of the system and the ability of the business model to deliver savings are where the focus needs to be in health care reform. Monopolies, whether in the private or public sector, and regardless of industry, have a dismal track record of controlling costs.
In the absence of competition, monopolies too often become bloated, bureaucratic, uninspired, and slow to modify or innovate their business models in ways that lower prices and address consumer needs. In fact, the United States has a history of breaking up monopolies and nurturing responsible competition that benefits Americans. This is the same rationale Senator Sanders uses to justify his proposal to break up the big banks.
Instead of consolidating essential public services like health care into monolithic systems dominated by a few or a single major player, it may be time to rethink our system and encourage competition that inspires real innovation in cost containment and quality. This doesn’t mean dismantling the entire system. But more diversity in the system could result in a greater urgency for effective reform, innovation that addresses our greater health care challenges and, ultimately, lower costs.
One thing is certain, the drive to consolidate medical practices and institutions into large conglomerates has proven not to be all that it is cracked up to be for the medical consumer — the proof is in our ever-growing health care costs.
Mike Smith was secretary of administration and secretary of human services under former Gov. Jim Douglas. He is the host of the radio program “Open Mike with Mike Smith,” on WDEV 550 AM and 96.1, 96.5 and 101.9 FM. He is also a political analyst for WCAX-TV and WVMT radio and is a regular contributor to the Times Argus, Rutland Herald and Vermont Business Magazine.