I put single-payer in quotation marks because what was on the table there (passed in principle a few years ago through a law that left the details to be worked out later) was more single-payer lite than anything else. Part of the complexity of the American health care system is that we have so many different insurers/payers for different segments of the population. To wit, some of the major ones are:
- Medicare, primarily for the over-65 set
- Medicaid, aimed primarily at the poor and disabled
- Commercial insurance companies, which sell health insurance to individuals or to certain employers who want to buy fully insured products for their employees
- Self-insured plans, in which an employer effectively acts as its own insurance company and takes on risk for the health benefits it offers to employees
A true single-payer plan would get rid of those distinctions and replace them with a single national plan for everyone--a sort of "Medicare for all" as its proponents often describe the idea. But as a state, Vermont wasn't really in a position to do that. Self-insured plans, for instance, which the majority of privately insured people are in, aren't generally subject to state regulation. And Vermont doesn't have control over Medicare. So their approach would've been more modest than that advocated by national single-payer fans, restricted to those parts of the insurance landscape over which Vermont's government has authority.
But when viewed that way, it's fair to ask whether they really need single-payer. In my estimation, there are four primary arguments for implementing a single-payer system.
1. Universal coverage
This is, I suspect, the strongest selling point for most fans of single-payer. Everybody's in so uninsurance essentially disappears. And it's a strong argument. Cost--at the individual level--isn't a barrier to gaining insurance, nor is any kind of discriminatory effort on the part of the insurance industry since that industry has more or less been supplanted by the government.
But in all likelihood Vermont will inch toward that goal over the next 2-3 years--granted often with less generous coverage than under a single-payer system--as the coverage expansions under the Affordable Care Act continue to take root. They've expanded Medicaid and have a state-based health insurance exchange that will continue doling out subsidies for private insurance coverage regardless of what the Supreme Court does. Gallup had their uninsurance at 8.5% as of last summer and it's virtually certain to fall at least a few more percent before all is said and done. They won't get to 100% coverage but they'll get close enough for government work.
2. Administrative simplicity
The sheer number of health insurers adds layers of complexity (and expense) to the health system. For instance, a hospital or health system may have to grapple with widely varying approaches to reimbursing them from each insurer that sends patients their way (different financing arrangements, different logic to the way reimbursements are handled, different reimbursement rates, different cost-sharing for patients, etc). Vermont certainly expected savings to accrue over time based on the simplification of the billing processes in that state.
But I'm left wondering how big an impact that would really have on the state. As already mentioned, self-insured employer-based plans would persist under Vermont's proposed system so we're really talking about the fully insured commercial market where people buy plans from insurance companies.
But Vermont is a tiny state with a correspondingly tiny insurance market. 80% of their insurance market is in the hands of their local Blue Cross Blue Shield affiliate (counting a wholely owned subsidiary of BCBS that also competes), 17% belongs to MVP, and 3% to Cigna. In other words, they're not all that far from a single-payer system--albeit one in which BCBS is that payer--as it is.
I can easily imagine that large states with dozens of insurers--e.g., California or New York, two states that have considered single-payer in some respect--could wring quite a bit of savings out of a simplification of their markets. But Vermont is a much less complex market than most places, so I have to question how much benefit will really accrue from streamlining it.
More importantly it seems to me that single-payer advocates sometimes mistakenly believe that single-payer means the private insurance industry evaporates. But the government isn't an insurance company--it generally doesn't have the know-how to administer or operate such a program. That's why Medicare is operationalized through contracts with a variety of regional private companies that handle the day-to-day business of insurance, like processing claims and making routine coverage determinations. It's why most states have privatized most of their Medicaid programs, which are actually in the hands of competing private managed care companies. So while there are certainly some administrative simplifications from transitioning to single-payer, complexities remain.
3. Unified policy direction across the health system.
In my mind, this one might be the strongest argument for single-payer. There's a very prominent school of thought that suggests real change in our system requires 1) changing the way care is paid for, and 2) leveraging those smarter health care payment approachs to re-design care delivery so as to offer better care.
But if payment is going to push and enable health care providers to re-organize the way they do business to improve, you can't have every payer sending different signals. Providers need a coherent message from the insurers reimbursing them. Single-payer would certainly achieve this. Even now, as payment and delivery reform is spreading across the country, Medicare has been a driving influence because it's such an important payer by virtue of its size. Now imagine it enrolled everyone.
Our system at present is unabashedly multi-payer. Under such circumstances, the solution to achieving (loosely) aligned policy direction is encapsulated in another bumper sticker-ready phrase: all-payer. Getting all or most insurers on the same page so that their payment approaches are directionally aligned, pushing providers in the same direction, can have substantially the same effect.
There are ongoing efforts in dozens of states to line up the efforts of health care payers--not just the various commercial insurance companies but public payers like Medicaid as well--to achieve essentially what some hope single-payer would. Vermont is no stranger to this effort, being one of the earliest states offered federal funds to promote this work. And they've not been shy about using the regulatory authority of the state to compel private insurers to align payment efforts to support certain health care delivery models.
So there's a strong case to be made that unified policy direction to push the system in a positive direction not only can be achieved in a multi-payer system, to some degree it already is being achieved in states like Vermont.
4. Rate-setting
This last item gets at a particular danger of our system as currently constituted: better, cheaper care need not necessarily translate into lower costs for consumers and insurers. It's possible that vagaries of the intersection of a region's insurance and health care provider markets--relative market clout, pricing terms established on a payer-by-payer basis through the contract negotiation process with health care providers--could keep prices for health services artificially high.
This is what the vaunted robust public option debated in 2009 was to have attacked. And it's what single-payer would remedy. Presumably a single-payer plan would set the rates paid to providers, eliminating the possibility that an especially large or powerful health system could negotiate higher reimbursements just by virtue of its market clout.
But, yet again, similar outcomes could likely be achieved in a multi-payer system. Various academics have suggested that all-payer rate setting systems adapted from European models could be transplanted here to replace our haphazard pricing system. The state of Maryland has been using an all-payer system to set hospital reimbursement rates for decades, though their system underwent a transformation this year. If any state has the regulatory climate and a bite-sized enough market on which to cut our national teeth by testing out such a course it's Vermont.
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So given the pioneering work Vermont is doing to drive multi-payer change, amid the backdrop of historic coverage expansions happening under the ACA, it's fair to ask how much would actually change in practice under a single-payer system vs. the kind of all-payer strategy for change the state is already pushing? I suspect the difference is ultimately fairly modest.
And that's because you can get most of the results folks hope for under a single-payer system by aligning all the parties in a multi-party system toward those goals. Single-payeresque outcomes--a single, unified and equitable system--in a multi-payer environment. E pluribus unum.
