By Hamilton E. Davis
A Vermont Journal, March 25, 2015
One of the most important principles underpinning health care reform in Vermont is the proposition that health care financing should be separated from employment. If you lose your job, or if your employer doesn’t pay for health insurance, that shouldn’t leave you without access to health care.
That principle was one of the victims of Governor Peter Shumlin’s decision last December to scrap the financing portion of his single payer reform initiative. The cost of shifting to public financing of the entire system was estimated at north of $2 billion, and Shumlin and his staff decided it couldn’t be done.
At the beginning of the legislative session in January, Shumlin built back a small piece of financing into his budget proposal, but that plan involved only getting more money for Medicaid as a way to reduce the cost of health care somewhat. It did nothing to move health care financing away from its employment base. One of the things the Shumlin planners never did was to take seriously the idea of moving toward public financing in a series of steps, rather than one big leap.
The idea of doing nothing structural on the finance side was unacceptable, however, to some of the advocates of reform. One of those was Dr. Deb Richter, a Montpelier-based physician, who has been one of the leading proponents of single payer health care reform for two decades. When Shumlin signed the health care bill in 2011, he pointed specifically to Richter as the leading player in the reform effort.
A few weeks ago, Richter proposed a new approach to the financing side of health care reform—a single payer system for primary care in Vermont. Richter called for the state to finance just primary care for now at a cost of roughly $160 million, to be paid for by a payroll tax, and possibly other revenue sources. If the whole cost were to be borne by the payroll tax, the rate would be about 1.2 percent.
Those numbers are not insignificant, but they are far below the figures bruited during the first four years of reform for a fully elaborated single payer system. The payroll tax estimates during that period ranged from 8 percent to 14 percent; that combined with the $2 billion plus total tab presented an insuperable barrier to action in the near term.
Richter’s plan has been sponsored in the House by Rep. Leigh Dakin, a Democrat from Chester, and in the Senate by Sen. Jeanette White, a Windham County Democrat; the measure has several co-sponsors in both chambers. The House bill has sponsors from Republican, Democratic and Progressive members.
Richter envisions the plan would work like this:
Every Vermonter would be eligible for primary medical care, paid for by the state. There would be no premiums, co-pays, or deductibles. Primary care doctors as well as nurse practitioners would be paid a lump sum per month for each resident in their panels. Richter used a figure of $500 per person per year, although she says the figure could almost certainly be lower. Vermonters enrolled in Medicare would get most of their costs paid by the federal program, but Vermont would pick up any co-pays or deductibles.
People could go to any primary care provider they chose, which Richter considers to be an incentive to high quality. “Patients can vote with their feet, if they think they are not getting what they need from a particular doctor,” she says.
Richter argues that public financing for primary care would confer a host of benefits to residents of the state as well as to the health care system itself. Primary care providers treat all the health care needs of a person, in contrast to specialists, who focus on a specific disease, like cancer, or a specific organ, like the liver or the eyes.
By making sure that residents can get quick access to primary care when they need it, Richter says, we can reduce the amount of specialty care needed in emergency rooms or when the medical problem has become more serious. She also points out that it is cheap: primary care uses just five percent of the total per capita cost for a given patient.
Moreover, financing primary care would provide a necessary boost to primary care providers, who usually get paid less, often far less, than specialists. The entire primary care network, in Vermont and in the country for that matter, is badly stressed by the increasing demands of technology and administration, she says.
“The leading reason is that they’re not given enough time with patients,” Richter says. “Primary care, above all, takes time with patients—not so much with computers, algorithms, questionaires…the actual time spent with patients has been dangerously eroded.”
It is important to note that the Richter proposal would advance a second critical principle of health care reform, the notion that in order to establish a financially sustainable delivery system we have to move away from fee-for-service medicine, which is a powerful incentive for overuse. The Richter scheme would represent the first movement toward lump sum per person payment for health in Vermont, or anywhere else in the country, for that matter.
Richter and her sponsors do not expect any final action on the primary care legislation in the current session. The whole idea needs considerable study, and to that end the health care bill now working its way through the House contains an appropriation of up to $200,000 for the development work. The Shumlin administration has not endorsed Richter’s proposal, but they are giving it serious consideration.
Shumlin himself has told Richter he is open to the idea, and his senior staff, including Lawrence Miller and Robin Lunge, are beginning to vet the numbers. There is no shortage of difficult issues to resolve, especially in getting such a scheme to mesh with federal requirements. But when asked whether the administration is taking the Richter proposal seriously, Miller replied:
“Absolutely.”
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