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Vermont Considers Its Own Single-Payer System

Elyas Bakhtiari, for HealthLeaders Media, May 4, 2010

Supporters of single-payer healthcare rallied in Vermont over the weekend, hoping to maintain momentum after lawmakers passed legislation that could allow the state to experiment with its own universal healthcare system.

Both the state's House and Senate passed similar bills late last month that call for the creation of a commission to look at options for reducing healthcare costs and covering all Vermonters, one of which must be a government-administered and publicly-financed single-payer system. The program would be "decoupled from employment and allow for private insurance coverage only of supplemental health services," according to the Senate bill.

The House version calls for a public-option insurance system and expanding previously-enacted reform efforts in addition to the single-payer experiment. Differences between the two bills still have to be worked out before final passage, and it is unclear whether Republican Gov. Jim Douglas will sign or veto the bill.

If passed, the legislation would make Vermont a laboratory for testing a radically different healthcare financing system. Previous reform efforts--such as the Massachusetts model and the recently-passed national reform--have attempted to expand coverage while retaining the existing private insurance system.

Questions remain, however, about whether the state will be able to implement the single-payer system right away. The legislation calls for the adoption of one final design beginning no later than July 2012, but the plan would first require approval from the federal government. The commission would have to write a proposal to CMS for waiving certain Medicare and Medicaid requirements in order to align with federal health programs.

Douglas has also said he is hesitant about the bills because the new federal healthcare law prevents states from experimenting with their own reform plans until 2017.

In addition to payment system reform, the legislation includes other strategies for reducing healthcare costs and improving quality. The bills call for setting up teams of healthcare professionals to manage patient cases and include goals for reducing annual hospital budgets, for instance.

Except in certain circumstances, systemwide net patient revenue increases for all hospitals reviewed by the healthcare commissioner could not exceed 4% for fiscal years 2011 and 2012, and the commissioner would have the authority to "restrict or disallow specific expenditures, such as new programs."

The Vermont Senate is expected to take a final vote on the legislation later this week.


Elyas Bakhtiari is a freelance editor for HealthLeaders Media.

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