Vermont Chooses Single-Payer: Who Else Has an Appetite for Experimentation?

This past Monday, the Vermont Senate passed a Single-Payer bill. The House had already passed a similar bill and the governor is friendly to the legislation, so all that stands between Vermont and a single-payer law are a few formalities. At the moment, though, Vermont is alone in taking advantage of the Affordable Care Act to achieve universal coverage without private insurers. In fact, it isn’t clear that any other states are taking serious steps even toward a public option.

Massachusetts isn’t going there: it is doubling-down on its eponymous model that relies on private health plans, and seems hell bent on showing the nation that this model can work. The state just boasted that capitation rates will actually go down in 2012, allowing the program to grow enrollment without additional funding. It’s not difficult to imagine the feeling of responsibility weighing on administrators and Democratic officials there as they work to pull the levers of payment reform to reign in Partners HealthCare and other misbehavers.

Connecticut has made some recent noises in favor of public insurance, but has just taken a step back. Democrats there just compromised away core provisions of its health reform bill that would have created a public payer to compete with private insurers. Supporters say the fight isn’t over yet, and it isn’t, but if a version of the public payer survives, it will likely have to sneak in through side channels over several years rather than make a grand entrance. Other progressive states in the Northeast and elsewhere seem even less inclined to rock the boat. That means we may not get a single state by 2014 to test the hypothesis that a public payer can increase competition and move the entire insurance market to control costs better than private plans alone.

Though I’ve long been skeptical of the public payer theory, that would be a shame. It doesn’t do much good to allow states to be crucibles of experimentation if they refuse to experiment in meaningful ways, and instead simply use their freedom to create 50 different bureaucracies that accomplish similar objectives in similar ways, without the administrative efficiencies of a national system.  The question we need to answer is not whether a single-payer, a mixed public-private, or an entirely private-payer system can work. We know from observing other nations that they can, and do. What we need to know now is, in the American context, what tactics within each of these types of systems are most effective at overcoming institutional and political barriers to bend the cost curve sharply without breaking the health care sector. Creating 50 versions of Massachusetts (or one Vermont, 24 versions of Massachusetts and 25 versions of an orthodox conservative alternative) is much less likely to achieve that.

Jonathan Halvorson, PhD, has worked for the past six years in managed care for a regional non-profit insurer. His views are entirely his own and do not represent those of his employer or other known individuals, living or dead.