Eyeworld

EW NEWS & OPINION June 2015 15 by J.C. Noreika, MD, MBA W hat's not to like about Vermont? Cheddar cheese, maple syrup, Ben and Jerry's, the Trapp family. Vermont may only have 2 seasons—winter and August—but the Northeast Kingdom attracts bicyclists, skiers, and RVs like its state flower, the red clover, attracts bees. It has also been judged an ideal sociologic incubator. Once a vermillion red state, the birthplace of Calvin Coolidge, it is now cobalt blue with a small but boisterous Progressive Party whose presumptive leader is Senator Bernie Sanders (D-VT). The demographics are favorable for a social experiment. Vermont shelters about 625,000 souls; that's the population of Baltimore. Census-takers find 95.2% describe themselves as "white." As of 2013, only 11.6% of Vermont- ers lived below the poverty line. There are 14 hospitals in the state and none compete with each other. There are only 3 commercial health insurers, the non-profit Blue Cross Blue Shield of Vermont, controlling 80% of that market. To reformers, it is the consummate locale to dream of a single-payer health insurance system. Peter Shumlin is the governor of Vermont. He has held statewide office since 1997 and once headed the Democratic Governors Associa- tion. To get Progressives and labor unions on board during the Demo- cratic primary for governor in 2010, he pledged to initiate a single-payer universal healthcare system. During the campaign, the governor stated, "we must control the growth in healthcare costs that are putting families at economic risk and mak- ing it harder for small employers to do business." House Bill 202 passed the legislature and was signed into law on May 26, 2011. It directed the state to develop financing for a system insuring all Vermonters. To control medical and administrative costs, a 5-member board would set reimbursement rates for providers, approve technology acquisitions, and create a global budget. Green Mountain Care was born. In the New England Journal of Medicine, Anya Rader Wallack, PhD, who led the Vermont Care Innova- tion Project, wrote, "the Shumlin administration believes that a single- payer system offers the greatest promise for reducing administrative waste and hassle in our healthcare system, guaranteeing coverage to everyone in the state, and reliev- ing employers of the increasingly crushing burden of health insurance costs." Its details, notably fiscal, were left to the devil. Dr. Wallack now heads the ACA's health ex- change in Rhode Island. To ascertain Green Mountain Care's feasibility, the state deferred to experts: Harvard's William Hsiao of RBRVS and Taiwan "Medicare for all" fame and the irrepressible Jon- athan Gruber of MIT, who coupled transparency and stupidity ever- more. Gruber was paid $400,000 for the 203-page report. Its projections were bullish. There would be imme- diate savings of 8–12% and an addi- tional 12–14% over time. The state would save more than $2 billion over 10 years. Vermont would be the paradigm for other states. With ACA waivers granted and federal subsidies flowing in, single-payer would be a reality in 2017. The U.K., Sweden, Canada … and Vermont. In 2014, Governor Shumlin defeated an underfunded challeng- er who opposed single-payer by a single percentage point; the election was decided in the partisan Vermont legislature. After the election, the governor spoke regarding Green Mountain Care, "I have learned that the limitations of state-based financ- ing, the limitations of federal law, the limitations of our tax capacity, and the sensitivity of our economy make that unwise and untenable at this time … the risk of economic shock is too high." The Vermont single-payer system was dead; this did not sit well with some constit- uents. Labor unions demonstrated at the inauguration and in the state capital. "The Statehouse 29" gained notoriety and mug shots for their exuberant protestations. What went wrong? The gov- ernor conceded the Hsiao-Gruber projections were wildly optimistic. The state's 2013 projections showed the cost of the program to be much higher and projected savings much lower. Green Mountain Care would mandate a tax increase of nearly 160% on employers and individuals (an estimated 11.5% payroll tax increase and sliding-scale 9.5% state tax). Vermont already had one of the highest state tax rates Not enough green in the Green Mountain State J.C. Noreika, MD, MBA in the country. Much of the federal funding through the ACA and Medicaid assumed by Hsiao and Gruber vaporized. In the New England Journal of Medicine, Harvard's John E. McDonough, DrPH, MPA, a for- mer Massachusetts legislator and single-payer enthusiast, writes of Green Mountain Care's demise. He laments that "Shumlin's decision to withdraw the plan represented a failure of political will—but some- times making decisions because of likely political consequences is the necessary, albeit regrettable, thing to do." He faults Shumlin's team for not enlightening the public to the plan's advantages. He grants Vermonters would not embrace the inevitable tax increases because they were transparent unlike the covert costs of employer-provided health insurance. Single-payer for the United States had been dealt a pernicious blow. Vermont spent its own treasure and the HHS's $45 mil- lion in vain. Concurrently, despite public support, the governments of Canada, the U.K., and Sweden are confronted economically and operationally by their own universal systems. Vermont's leaders made mis- takes. McDonough and his cohorts will learn. But he admits, if single- payer is to happen, "it will happen federally and not in the states—and no time soon." Universal care? The percentage of uninsured in Vermont is the fifth lowest in the nation. Single-payer really was all about the green. EW References McDonough JE. The demise of Vermont's single-payer plan. N Engl J Med. 2015; 372(17):1584–1585. Wallack, AR. Single payer ahead—cost control and the evolving Vermont model. N Engl J Med. 2011; 365(7):584–585. Editors' note: Dr. Noreika has practiced ophthalmology in Medina, Ohio, since 1983. He has been a member of ASCRS for more than 30 years. Contact information Noreika: JCNMD@aol.com Insights

• Cover