by Hamilton E. Davis
Vermonters will elect a governor next week and it is virtually certain to be the incumbent Peter Shumlin. It is an unhealthy irony, however, that he will be elected more in spite of his successes than because of them.
This judgment is based solely on the issue of health care reform. The governor has dealt with a range of other issues in his nearly four-year tenure of course, from school financing to genetic labeling to energy matters. But his single-payer initiative is the central issue of his governorship so far; health care reform dwarfs everything else.
Yet the whole issue of single payer has become a strange political enigma. The shrewdest political operatives thought the reform initiative would be the central concern in the current election campaign.
It wasn’t. Health care reform will have virtually no impact on the outcome of the voting, although Shumlin’s margin will clearly suffer because of his handling of the insurance Exchange established under Obamacare.
A major problem is that real health care reform is so complex that it has, so far at least, eluded the public, the legislature, the press---just about everybody, including, in the greatest irony of all, the governor himself.
As a result, all of the attention over the last several weeks has centered on the Exchange, which isn’t really health care reform at all, just more money to get some more care for some more people, and isn’t really Shumlin’s at all, but rather Obama’s.
Still, getting the Exchange up and running is Shumlin’s responsibility so it is fair to say it seems clear that all of the criticism of Shumlin’s performance in that regard is justified. Lost in the process, however, is any sense of the positive elements of Shumlin’s single payer plan. Which is a loss not only for Shumlin, but for all Vermonters.
For the Shumlin initiative is truly stunning in its scope and ambition. It far exceeds anything even contemplated by recent governors, like Jim Douglas, Howard Dean, Madeleine Kunin, and Dick Snelling. You have to go back to Philip Hoff’s effort in the 1960s to build union schools and wrench an isolated, rural Vermont into the 20th century or Dean Davis, who saved the Vermont environment with Act 250, to find anything comparable.
Moreover, in some important ways, Shumlin’s performance has been superb. Here’s how:
Health care is by a wide margin the most important and difficult domestic issue that Americans have dealt with ever, with the possible exception of social security. Beginning in the mid-1960s, health care has exploded, both in its reach and complexity and its cost.
Even before the turn of the millennium, it had become clear to everyone whose head was not under water that the current health care delivery system was not sustainable at its historic inflation rate. The costs simply were not bearable. So reform was essential.
But who would do it? How would it work? How would doctors and hospitals, insurance companies, employers, policy makers, and the public at large summon up the political will to rework a social institution that deals with life and death and in the process eats up one dollar out of every five of our national output?
Vermont and a half dozen other states tried hard in the middle 1990s, and failed utterly. Hilary and Bill Clinton tried for a national system in that decade also, and delivered one of the biggest policy train wrecks in our history. The whole history of the HMO movement was a litany of failure.
As a candidate for governor in 2010, Shumlin plowed headfirst into this stony ground without a backward glance. He would go all the way toward full reform—single payer. He needed two things to get going—a plan that that had the potential to fully rework the system, and he needed a core team with the skill and drive to make it happen.
He got both of them. He talked the two major players---Anya Rader Wallack, a national class policy analyst, and Steve Kimbell, a veteran lobbyist—into committing to the project. They in turn brought in other major players, like Robin Lunge in the governor’s office; and in a matter of weeks the team wrote and convinced the legislature to pass Act 48, which established the framework for the single payer plan.
It is impossible to overstate the importance of Act 48. The early efforts to pass single payer in the U.S. focused on replicating the single payer system that Canada adopted in the mid 1980s. The left is still entranced by Canada, but the consensus in the American health policy community is that it wouldn’t work here.
The Canadians built their plan so as to cover everyone and pay for it with taxes at both the federal and provincial levels. They left the delivery system, the doctors and hospitals, alone; there was no clear cost containment system to cope with the inflation that ensued with a huge increase in demand. Within months, the Canadian system began to crack under demand and they had no way to deal with it except by making people wait for care.
The Shumlin team turned the Canadian system on its head. They started with cost containment and built the system based on their ability to control inflation. It is important to understand that policy makers of every stripe in the United States had been trying since the early 1970s to get American costs under control. All failed.
To cut that knot, Act 48 established the Green Mountain Care Board, with the power both to regulate hospital budgets and to restructure the delivery system itself as well as the mechanism to pay the doctors and hospitals. That was critical because regulation alone had proved inadequate to corral costs.
Moreover, the Green Mountain Care Board itself was designed to be light years more effective than its inadequate ancestors, the Vermont Hospital Data Council and the Public Oversight Commission.
Act 48 in short was simply brilliant—there is nothing to compare with it in the United States today, including Obamacare.
At the same time, the Shumlin designers utilized a provision of Obamacare that envisioned the establishment of accountable care organizations (ACOs), coalitions of doctors and hospitals that would cooperate in delivering care. The purpose of these structures would be to replace the kind of competition between providers that had driven up costs for so long…
Once in place, the Green Mountain Care Board began to fulfill its mission to bend the cost curve. After 40 years in which costs in the Vermont hospital system routinely rose by from eight to 11 percent, the trend is now running at just about three percent. That could still be a little high, but the board has delivered a solid cost performance for the first time in the modern era.
For this performance—assembling a really good team and designing a brilliant reform plan, as well as getting an excellent start toward cost containment and restructuring—Shumlin has gotten no credit at all. As of this writing in Oct. 28, the Shumlin performance on the essence of health care reform has been, as far as I know, completely absent from the political environment.
Why should that be?
Part of the problem, although far from all of it, is the fault of Shumlin himself. The government machinery he built is excellent; his management of it, particularly the way he has dealt with the legislature and the public, not so much. Terrible, in fact.
He talked about health care reform with an airy insouciance. It would all be perfectly straightforward, he was prone to say. We can get a single payer up and running by 2014, he said, “because we’re smarter than the feds.” The problems with the Exchange were a “nothing burger.” The feds will give us whatever waivers we need. It will be simple, you just swipe a card…
So far from being routine, getting from a really good start in the first three years to an actual operating system that will fulfill the promise of Act 48 will be brutally hard, a fact that has been clear to the real health care players in the state but one that Shumlin hasn’t begun to share with the public.
It hasn’t all been Shumlin’s fault, however. Part of it lies with much of the Republican Party in the state, whose candidates have had nothing substantive to say about health care reform. No Republican that I know of has said what she or he would do about health care reform in Vermont.
But Shumlin remains the leader. I suspect that the reform environment will change drastically after the election. The plan for single payer has been developed pretty much in secret, but the veil is going to be pulled away once the legislature is back in session.
At that point, the concept will still be brilliant. Act 48 will stand and it is finely wrought. And the team Shumlin has on the field is very good. But there has never been this big a challenge for the state ever, so success will be elusive.