Single Payer in Vermont

Vermont is leading the nation in development of a health care system that would provide better care for more people at less cost. “If Vermont can pass a strong single-payer system and show it works well, it will not only be enormously important to this state, it will be a model,” Sen. Bernie Sanders told Vermont Life. “If we do it and do it well, other states will get in line and follow us … and we will have a national system.” The new magazine article said Sanders has been a leading advocate for a single-payer system since his days at mayor of Burlington in the 1980s.

Special Report: Pre-Exisiting Conditions

Written by Leslie Wright

In May 2011, Gov. Peter Shumlin signed legislation that
set the state on a path toward its own brand of health care,
a made-in-Vermont “single-payer” system that would leave
no Vermont resident without insurance. Many hurdles remain, but the target date is 2017. If successful, the plan would be the first of its kind in the country and a historic change in
the way health care is delivered in the United States.

Why did this happen in Vermont?

Part One: A Steady Drumbeat

In 1990, Ethan Parke was dairy farming in Irasburg, running a small operation with 35 head, 12 miles south of the Canadian border. It was a hardscrabble existence at best. He couldn’t afford health insurance. His wife had a difficult childbirth that, after several trips to the hospital and 40 hours of labor, required a caesarean section that came with complications.

The hospital bill induced another kind of pain and some frustration. Since he’d be paying every penny, Parke scrutinized the invoice, which was yards long. Some of the charges seemed astronomical; others were puzzling, like $20 for slippers they never saw.

Five years later, his 5-year-old daughter landed in the emergency room with a broken leg, and he got another unpleasant look at the cost of health care. “We had to pay three different doctors for the diagnosis of broken leg — even though the emergency room doc showed me the X-ray, and it was plain to see,” Parke recalled. “We paid an amount for the hospital diagnosis, another amount for the radiologist’s diagnosis and a third amount for the orthopedic doctor’s diagnosis. These are things you never see or never worry about if you are well-insured. But when you are a self-pay patient, you are acutely aware of the overcharging and unnecessary stuff that goes on.”
Parke didn’t need an X-ray to see problems in the health care system. While searching for remedies, he discovered a book called “In Critical Condition.” “The final chapter of that book gave a very detailed conclusion that the country needed a universal, publicly financed health care system, and although I don’t think the book uses the term single-payer, that’s exactly what he described,” Parke said. The book, by Sen. Edward Kennedy, was published in 1972.

In a single-payer system, hospitals, doctors and other health care providers are paid for their services by one entity, typically a government-run organization, instead of multiple insurance companies, as is now the case.

Proponents believe single-payer is more efficient, more affordable and a more equitable way to cover the entire population than today’s multi-payer system. Opponents view single-payer as creating an unnecessary and inefficient government bureaucracy with high-risk consequences for taxpayers that would also erode the quality of health care.

Whatever the benefits and drawbacks of single-payer, the fact is that Vermont is vigorously pursuing it. An act of legislation signed in 2011 aims to deliver a single-payer health care system to all 626,000-plus Vermont residents by 2017. Many important aspects, including how such a system would be financed, are still to be determined. But if it unfolds as envisioned, Vermont would be the first state to divorce the only health care system most Americans have known, replacing it with one much more familiar in other parts of the world, and, some believe, paving the way for the country.

“If Vermont can pass a strong single-payer system and show it works well, it will not only be enormously important to this state, it will be a model,” said Vermont Sen. Bernie Sanders, an Independent who has pushed single-payer for decades. “If we do it and do it well, other states will get in line and follow us, and over years, it will take years, we will have a national system.”

That Vermont is trailblazing may not be so surprising, at least to students of Vermont history. Vermont has led the way on many major social changes, dating back before statehood, when the Republic of Vermont’s constitution abolished slavery in 1777.
(Vermont wouldn’t become a state for 14 years, and slavery wouldn’t be outlawed for another 88.) Vermont was a leader in environmental regulation when Act 250 was adopted in 1970, a law still in effect today. The state was the first to recognize civil unions in 2000.

How Vermont came to be at the forefront on single-payer health care is a tale of a passionate, persistent and sometimes quixotic group of activists. Among them are a dairy farmer, a doctor and a college professor who kept up a steady drumbeat — hosting forums, mailing newsletters, organizing rallies, arranging dinners in their homes, testifying to lawmakers and even helping draft legislation. They rode out early attempts at change that failed miserably and kept trying until slowly, eventually, over decades, the stars began to align and their dream was within reach. From the late 1980s through to today, a core group never stopped writing and meeting and speaking and believing that change could happen.

Parke was one of the core activists. He was in on the ground floor, motivated by his experiences with his family’s health care. A lanky, soft-spoken Vermonter, Parke immersed himself in learning about the health care system and possible alternatives. In the 1990s, he would serve as a low-income representative on a state board that scrutinized hospital expenditures. He didn’t consider himself an activist like some single-payer advocates who had been organizing on other progressive issues. He just felt compelled to act because the system seemed so dysfunctional and he saw the potential for change. He saw strength in numbers because he was not alone in his struggle to pay medical bills. “It was a lot of the people I knew in the Northeast Kingdom, a lot of self-employed people, farmers, small-business people, loggers. They all had their stories of dealing with the health care system, and I just felt, as Sen. Kennedy’s book made clear, there is a better way to do this, a more equitable way,” Parke recalled on an evening after work in the book-lined living room of his modest two-story home in Montpelier. No longer dairy farming, he works for Vermont Housing and Conservation Board, conserving farm land.

“I started looking around, listening to other people’s stories, and felt like something is politically possible because the people I was talking to certainly didn’t have the skepticism or the fear of socialized medicine or government control. What you hear from the typical opposition, I wasn’t hearing that from the people I knew. Certainly not from farmers and the self-employed. I thought maybe we could work on something in Vermont,” Parke said.

Part Two: Footholds and Failures

In the 1970s, as Sen. Kennedy’s book appeared, health care was just incubating as a national issue. Still, Congress was concerned about rising costs, and in 1979, as a result of federal legislation, Vermont stepped up scrutiny of new health services and hospitals’ major building projects. Eight years later, single-payer blipped on the radar screen in Burlington. The city’s wild-haired and obstreperous socialist mayor, Bernie Sanders, dispatched a task force to look to Canada’s government-run system for ideas on how to tamp down health care costs.

Sanders, who was the single-payer activists’ biggest political ally, said he knew then that a single-payer system was not a likely outcome at that time, but working toward that goal and educating people about alternatives was important. “The purpose was to say to the United States and Vermont, we’re behind the rest of the world in terms of guaranteeing health care as a right,” Sanders said. He would continue to draw attention to single-payer throughout his political career, as mayor, as U.S. representative and as U.S. senator.

Near the end of the ’80s, Parke founded Vermont Consumers Campaign for Health, along with about a half dozen others. Because most Vermonters had never heard the term single-payer, let alone pondered the concept, initial efforts were focused on getting the word out through newsletters, lectures
and meetings.

While winning supporters across the state was important, systemic change could not happen without the Legislature.
In 1991, Sen. Cheryl Rivers, a progressive Democrat from Stockbridge, sponsored a single-payer bill that Parke had a hand in drafting. The bill never made it out of its legislative committee, but awareness that the system needed repair continued to grow. That same year, with 62,000 Vermonters, or 11 percent of the state’s population, uninsured,
Republican Gov. Richard Snelling named a blue-ribbon commission to
come up with a plan to cover all Vermonters. Snelling died in office at age 64 from a heart attack on Aug. 14, 1991. Lt. Gov. Howard Dean, a physician and Democrat, became governor.

Dean was a proponent of health care reform and a recognized expert on the matter. He was, however, against financing reform with income tax, a view that clashed with single-payer activists. He pushed for reform within the multi-payer system.

The next year, Rivers again introduced a single-payer bill. It lacked the support for passage, and Rivers agreed to scrap it, but Parke said Rivers made sure that as the state considered reform, single-payer was on the table. Indeed, Act 160, which created the Vermont Health Care Authority, called for study of both single-payer and multi-payer systems to determine the best way for the state to provide health care for all Vermonters. Act 160 passed.

The Health Care Authority was beset with troubles, according to Howard Leichter, a professor at Linfield College in Oregon, who analyzed the state’s health care reform efforts at the time. Internally, two of the three board members were in different camps on reform. Externally, interest groups on all sides complained they were not included. The single-payer activists felt that the Authority didn’t have a handle on how much money single-payer would save. Dean’s administration started to work on a plan of its own, seemingly undercutting the work of the Authority. By 1994, the Legislature had a menu of reform plans to consider that ranged from single-payer to employer-mandated insurance coverage to coverage focused solely on the uninsured.

Rivers again introduced a single-payer bill. This time, she didn’t go it alone. Rep. Ann Seibert sponsored a bill on the House side. The Rivers and Seibert bills won 35 co-sponsors, a dramatically improved reception over Rivers’ attempt three years earlier. One of the sponsors of Rivers’ bill was Sen. Peter Shumlin.

With so much activity on health care reform, Parke’s group, Vermont Consumers Campaign for Health, saw an open window and began feverishly working to get a referendum on single-payer on the ballots for Town Meeting Day, Vermont’s iconic exercise in grassroots democracy. The matter was far from being on ballots in all 246 town meetings across the state, but a majority of residents in 50 Vermont towns voiced their approval of single-payer.

In the Legislature, Gov. Dean’s plan, which went through many iterations, was the one to survive for a vote in the House. In a Hail Mary move, representatives of the Progressive Party offered an amendment to Dean’s bill calling for a single-payer system. This was the first time that government-run single-payer would be voted on by the Legislature. The amendment failed 112–29.

As Leichter noted in his analysis, “The prospects of Vermont’s going to a single-payer health care system in 1994 were remote: Republicans, who controlled the Senate, and Gov. Dean (‘I would never do a Canadian-style single-payer.’) both opposed the model.”

Stalled and with a lack of consensus on the best way to proceed, health care reform foundered after 1994. So did grassroots activism on single-payer. By the end of 1995, Vermont Consumers Campaign for Health no longer had a paid staff person, and “discussion on single-payer strategies lacked the enthusiasm of earlier years,” Parke noted in an analysis he wrote on early reform efforts. “I was definitely discouraged. I kept looking for other avenues. My thinking at that time was, We are not going to get publicly financed universal health care, but maybe there are some things we can do that would help people that would be incremental steps toward a better health care system, but that would not disillusion people,” Parke said.

Part Three: Blowing in From Buffalo

About five years after the meltdown in 1994, a physician from Buffalo, N.Y., moved to Vermont. Dr. Deborah Richter was focused on single-payer like Ahab searching for a white whale.

“Dr. Deb” sought out Parke to learn what was happening on single-payer. Not much, was the answer. Richter was not dissuaded.
“It never dawned on me it wasn’t a good idea,” Richter recalled recently over the Sunday afternoon din at a popular Montpelier coffee shop. “They had already done a lot of the legwork, and I thought, OK, we’ll get it going again. I consider it kind of like trying to get a patient to quit smoking. It doesn’t just happen after one try. It happens after seven tries, and we’ll keep trying until it works.”

Self-assured but not brash, Richter possesses the tenacity of a salesperson working on commission softened by the listening skills and empathy of a healer. The source of her conviction came from a decade of treating poor, uninsured and predominantly minority patients in Buffalo. “I had people dying from preventable conditions like diabetes, high blood pressure, undiagnosed cancer with obvious signs. And they were young, in their 20s, 30s, people in their 50s, dying,” Richter said.

She had given up trying to change her home state. Politicians were inaccessible, and steering reform in a state so large was more than one doctor could manage. Vermont was another story. Right away she saw that things were different here. The state’s part-time lawmakers don’t have offices in the state capitol. They don’t even have staff. That meant, literally, there were no closed doors or protective gatekeepers for legislators to hide behind.

In 1999, Richter assembled an ad hoc group, Vermont Health Care for All, which would become a formal entity in 2003. Parke was among the original board members, and others from Vermont Consumers Campaign for Health would also join the emerging group. Searching for new strategies on single-payer, Vermont Health Care for All made a bold proposition — amend the state’s constitution to declare health care a civil right. The proposal, which was Parke’s brainchild, drew little attention and had no hope of being taken up by the Legislature. Nevertheless, Vermont Health Care for All was in motion with its sights set on winning over doctors and business leaders.

Richter, meanwhile, was just revving up. She practiced medicine three days a week in Cambridge; the rest of the time, she advocated for single-payer. She spoke to every Rotary Club in the state, sometimes rising well before dawn to make 7 a.m. breakfast meetings. Rotarians were in her sights because she believed businesses were an essential ally in the battle for single-payer. She gave 500 talks over 11 years.
When she wasn’t on the road, she was in the Capitol cafeteria, lobbying legislators as they grabbed coffee or ate lunch. Richter was surprised to learn that some of these lawmakers — many of whom were farmers, self-employed or the like — didn’t have health insurance.

As this second wave of activism gained traction, changes in the health care landscape cast single-payer in a more favorable light. In the ’90s, the issue had been coverage for the uninsured. At the millennium, the underinsured became part of the equation. Inadequate health care wasn’t just about the marginalized — it was about the college-educated with jobs and mortgages. By 2000, health care spending by Vermonters had nearly doubled in eight years from $1.3 billion to $2.3 billion, a trajectory that would continue.

Sanders, meanwhile, continued to draw attention to the issue. Continuing his crusade for single-payer, he began taking busloads of Vermonters to Canada to buy cheap prescription drugs, a move that garnered considerable media attention. At a rally in 2001, organized by Richter and other activists, more than 1,000 people turned out. That same year, the state-commissioned Lewin Report concluded that single-payer would save $118 million annually, or 5 percent.

While support was growing, many were still unconvinced, particularly Republican Gov. Jim Douglas, who took office in 2003. Douglas was opposed to government-run single-payer health care and said he would veto any single-payer initiative that crossed his desk.
In 2005, with 10 percent of the state’s population without health insurance and health care costs growing by nearly the same percentage annually, controlling the spiraling cost of health care and covering the uninsured had the Legislature’s attention. Another single-payer health care bill was introduced. Although the activists felt it was weakened as it moved through the Legislature, the bill did pass, only to meet Gov. Douglas’ veto. That same session, yet another measure was adopted calling for a single-payer study.

That study was done in 2006 by Ken Thorpe, whose findings echoed the Lewin Report. Single-payer was the most cost-efficient way to cover all Vermonters, the study said.

“Every study concluded that single-payer would save money and cover everyone. Every single study. Lewin is not a progressive group, they just came to the conclusion. It’s not like they are pro-single-payer,” said Ellen Oxfeld, a single-payer activist and Middlebury College professor, who added that Thorpe was not particularly single-payer friendly either.

Part Four: The Velvet Hammer

An anthropology professor, Oxfeld helped found the state’s Progressive Party and has been a major organizer on single-payer from the early days. Slight of stature, Oxfeld speaks in a gentle cadence that belies her laser-like focus. Oxfeld’s velvet hammer style makes activism personal. She wins people over in intimate settings like, for example, a lasagna dinner in her home where she invited Richter to give a presentation to local lawmakers and key community leaders on both sides of the issue.

She nudged Ann Ross, a retired schoolteacher, to hold a meeting at her house in Cornwall in the mid-2000s. Sensitive to the gap between the haves and have-nots, the 81-year-old Ross has long been active on social issues, helping to found the local United Way and regularly joining a Saturday morning peace vigil in Middlebury. Ross and her husband, Jim, retired business manager at Middlebury College, were what marketers would call opinion leaders in the community where they raised four children. About 20 carefully selected invitees attended the Rosses’ gathering, including the head of the local hospital. Small gatherings like these were a key component of the single-payer movement, and Oxfeld had a hand in many of them.

Meanwhile, the tides of Vermont politics were moving steadily leftward, and by 2008, Democrats had reached ironclad majorities in the Statehouse. A new approach to single-payer took shape among lawmakers. Instead of aiming to transform the entire system, this time the plan was to institute single-payer just in hospitals. (Canada’s system started this way in 1947 when the rural province of Saskatchewan instituted government-run health care in its hospitals.) Sponsorship came from an unlikely source — a maverick Republican representative named Topper McFaun, from Barre. McFaun introduced a bill, which Richter helped craft. It went nowhere, but kept the single-payer flame flickering.

While the activists continued to plug away, the movement was about to get a big boost from a small union-organizing group. The Vermont Workers’ Center had just two employees but was adept at leveraging the groups it had supported, such as the nurses at Fletcher Allen Health Care in Burlington, the state’s largest hospital. The Vermont Workers’ Center, which had worked alongside Richter’s group, was tired of the legislative logjam on single-payer.

“Most legislators said it made a lot of sense, but year after year they said it just wasn’t politically possible. We wrestled with that,” said James Haslam, director of the Workers’ Center. “How do we make it in their best interest to do it? It’s not going to take a few people, a dozen people. It’s going to take thousands of people to make it possible.”

The cost of health care was affecting a broad swath of workers in the state, and the Workers’ Center sensed there was critical mass if only the masses were organized. Organizing the masses was something the Workers’ Center knew how to do. The group launched Health Care Is a Human Right, which played a key role by humanizing the issue and getting attention in a way that legislators couldn’t ignore.

A rally on May 1, 2009, drew more than 1,000 people, a similar turnout to the 2001 rally. As Health Care Is a Human Right was building, Vermont Health Care for All held a panel discussion with businesses. Shumlin, who by then had risen to Senate President Pro Tem, was there. Oxfeld, who keeps a library of legislative bill numbers in her head and an archive of single-payer articles and editorials in her computer, was stunned by Shumlin’s remarks. “I remember this like — I don’t know what like — but just so clearly in my head because he said, ‘They are not going to solve this in Washington. They are not going to come up with a solution, and we’ll have to do it here in Vermont,’” Oxfeld said.

Shumlin reiterated the message in June at another panel discussion the group held at a packed Congregational Church in Middlebury. Two months later, in August 2009, Gov. Douglas announced he would not seek re-election. It would be a wide-open race for governor in 2010, the chance of a lifetime for several Democrats, including Shumlin.

Part Five: A Rock Star, and
the Final Star

As Oxfeld went about organizing forums and dinner parties, she also had a hand in bringing a big-name player to the state. William Hsiao, an economics professor at the Harvard School of Public Health, was a rock star in single-payer circles. He had designed the single-payer system for Taiwan, among other places, and his appearance before the state Legislature was a watershed moment in the single-payer movement.

Hsiao might never have appeared in Vermont at all but for a chance meeting between Shumlin and Oxfeld’s husband, Frank Nicosia, a history professor at the University of Vermont. In December 2009, as Shumlin was pondering a run for governor, Nicosia and Shumlin crossed paths in a Winooski restaurant. Nicosia told Shumlin that single-payer advocates were ready to get behind him, and suggested he talk to Hsiao. As Nicosia recalled, Shumlin “immediately reaches in his pocket and takes out a little notepad and says, ‘How do you spell his name?’”

After hearing about her husband’s encounter, Oxfeld followed up with Shumlin by e-mail, sending him contact information for Hsiao. She didn’t stop there, checking in to ask whether he got in touch with Hsiao. It turned out Hsiao missed a scheduled phone interview, Shumlin told her. She wished him luck, nudging him to keep trying. Shumlin did and invited Hsiao to speak to the Legislature. Hsiao declined.

“He said, ‘I’ve given up on America. I can’t help you.’ I said, ‘What do you mean?’,” Shumlin recalled. “He said, ‘I work in countries that I can actually get something done.’ I said, ‘Dr. Hsiao, I actually think we can get something done here in Vermont.’ I sort of pleaded with him to come talk to us, and he came up.”

In the wake of Hsiao’s appearance before the Legislature in March 2010, a bill passed that session calling for a study of three options for reform: government-run single-payer; multi-payer in which public and private plans compete; and a public/private single-payer system administered by a competitively selected entity. This time the political will was there to make something happen. Hsiao won the contract to do the study. He concluded that the public/private single-payer model was the most cost-efficient way for Vermont to reform health care and the most politically appealing, saving 8 to 12 percent immediately and 12 to 14 percent over time.

The final star aligned in the single-payer constellation when Shumlin was elected governor in November 2010. Shumlin had survived a five-way primary by 203 votes, which was the margin by which he won Oxfeld’s home county, Addison County, Oxfeld noted. She believes the single-payer advocates delivered Shumlin the primary and the general election, which was also close.
Shumlin agreed.

“When I entered the five-way Democratic primary, I was the last candidate in, and I was polling fourth out of five. Most people thought it was a fruitless effort. I was the only candidate in America to make ads that said, ‘If you elect me governor, we are going to pass single-payer health care,’” Shumlin said. “The grassroots support I got from single-payer advocates made it possible for me to be governor. They knocked on doors. They poured their hearts out. They saw an opportunity, and I would not be here without them.”

After squeaking out a victory in 2010 and signing the milestone health care legislation in 2011, Shumlin faced the electorate again in November 2012, this time winning by a wide margin. Asked at his first post-election news conference about the outlook for health care, Shumlin said the push toward single-payer would continue, with “a transparent discussion with every Vermonter who wants to participate about how we best move in 2017 from a premium-based system to a publicly financed system, where we all pay our fair share, and we get it off the backs of businesses and grow jobs and economic opportunities. That’s the plan.”