Slow is better than fast for states interested in single-payer, UMass Medical School expert says

May 15, 2017

As the Senate debate of the American Health Care Act (AHCA) heats up in Washington, D.C, legislators, health care leaders and the American public are calling for a serious discussion on moving to a single-payer health system.

Aetna CEO Mark Bertolini on May 11 told employees in a private meeting that the nation needs to begin to debate single-payer, according to Vox.com. And in a New Jersey town hall meeting just a day earlier, constituents of Rep. Tom MacArthur argued in favor of the government-funded health system.

States like New York and California are already considering whether to move to a single-payer, government-funded health system. In New York, an act that would create a state-run insurance program is being examined by the state Senate. And a California proposal has passed the state’s Senate Health Committee.

While it is possible for states to roll out their own single-payer systems, Vermont’s experience crafting such a plan provides some valuable lessons, notes Katharine London, MS, a top health care policy expert at UMass Medical School.

A gradual move towards achieving this ambitious goal is far more realistic than a headlong rush to convert overnight to a single-payer system, says London, principal associate of the Center for Health Law and Economics.

Vermont lawmakers first passed plans for single-payer health care in the state in 2011, with London and the Center for Health Law and Economics later hired to help guide plans for the new system.

London and the Center released a report that showed the conversion could be done, but also warned of challenges for Vermont given the magnitude of the change.

The new system would have cost Vermont $3.5 billion a year, the Center’s report found. Yet it would have actually saved as much as $281 million over its first three years thanks to reduced administrative costs and curbing health care cost increases.

But in order to make the switch, Vermont would have had to come up with financing to cover up-front costs of $1.6 billion, the Center’s report noted.

Citing those costs, Democratic Gov. Peter Shumlin in 2015 put Vermont’s single-payer plans on hold.

“Because of the magnitude of the change, people weren't ready to do it politically and the governor decided they just couldn't go forward with that big of a change,” London recalls.

One thing states should avoid is any plan that attempts to make an overnight transition, London advises. States also need to draw up a transition plan that addresses issues such as the big shift in jobs and employment that moving from one type of health care system to another would trigger.

Health care is a significant employer in many states and any shift could have big implications for people working in billing and administration.

As an example, she says much of that work would change and a lot of jobs might be at risk, so a phased approach is necessary.

Moving too fast would also scare people worried where their health care would come from with the change and create confusion.

“If you just flip the switch one day, it would be massively chaotic,” London says.

One option would be to introduce a public health care option and let it steadily grow as it attracts customers from private plans.

“If it got to the point where it really was the best option and the best plan out there with the lowest cost and best quality, people will go there on their own,” London says. “Then you can start phasing out the other private systems.”

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