Vermont Poised to Become First State to Enact Single-Payer Healthcare
Vermont made history last week by becoming the first state in the nation to offer universal, single-payer healthcare when Gov. Peter Shumlin signed its healthcare reform bill into law. The Vermont plan, called the Patient Protection and Affordable Care Act, will attempt to stem rising medical care prices and provide universal coverage. We speak with Dr. Deb Richter, president of Vermont Health Care for All. She moved from Buffalo, New York, to Vermont in 1999 to advocate for a universal, single-payer healthcare system in the state. Gov. Shumlin calls her the “backbone” of the grassroots effort that helped persuade the Democratic-led state legislature to pass the bill this spring.
Earlier this year, Governor Shumlin explained to Democracy Now! why the state needs the change.
GOV. PETER SHUMLIN: Here’s our challenge. Our premiums go up 10, 15, 20 percent a year. This is true in the rest of the country, as well. They are killing small business. They’re killing middle-class Americans, who have been kicked in the teeth over the last several years. What our plan will do is create a single pool, get the insurance company profits, the pharmaceutical company profits, the other folks that are mining the system to make a lot of money on the backs of our illnesses, and ensure that we’re using those dollars to make Vermonters healthy.
JUAN GONZALEZ: Governor Shumlin has appointed a five-member board to determine payment rates for doctors and what benefits to cover. Given all the details that need to be worked out, the plan may not go into effect until 2017.
AMY GOODMAN: To discuss the signing of the bill into law and the details of the plan, we’re going to the capital of Vermont, Montpelier, where we’re joined by Dr. Deb Richter. She’s the president of Vermont Health Care for All. Dr. Richter moved from Buffalo, New York, to Vermont 12 years ago to advocate for universal, single-payer healthcare in Vermont. Governor Shumlin calls her the "backbone" of the grassroots effort that helped persuade the Democratic legislature to pass the bill this spring.
Dr. Richter, welcome to Democracy Now! This is an enormous day for you. You’re going from your house to the Capitol for the signing. Can you explain what this bill actually does?
DR. DEB RICHTER: Well, this bill really establishes a framework for a true healthcare system, which is lacking anywhere in the United States. And what it will do is put in place a board that will oversee the healthcare system, and the board will be nominated in July. And we’ll start working in October to look at how we can reduce cost in our system. And that will be sort of the first phase. And most Vermonters won’t feel too much then, except probable a slowing of the rate of increase of their premiums.
And then the second phase, if we can’t get a change in federal law, is we will build the exchange according to federal law. But we will heavily regulate the insurance companies within that exchange and try to also streamline the payments to providers by making them uniform, calling them "all payer rates." So that’s sort of the second phase.
And then the third phase, if we get the waivers that we need in 2017, we hope to have a publicly financed single-payer healthcare—as close to a single-payer healthcare system as we can get.
JUAN GONZALEZ: And why the long wait, Dr. Richter, until 2017 for a full implementation? Is there any concern on your part that a change in the political climate, new people elected in Vermont, might attempt to roll that back in that period of time?
DR. DEB RICHTER: Well, we are not—we are not naive enough to think that we are not going to have significant challenges trying to get this bill in place. Our problem is really the federal law put restrictions on states that they couldn’t apply for waivers until 2017. What we’re hoping is that we can roll that back to 2014 and get our system in place before then.
And we’ve had—look, we’ve had struggles up 'til this point, and no one said we could get this far, and people were basically naysayers saying that you'll never get this far. And we’ve gotten this far. And I think the same energy that got us this far—we have a congressional delegation that is superb. We have a wonderful legislature; at this point, they’re all in—most of—the majority are in favor of single payer. And, of course, we have our governor, who campaigned on this issue, and a strong grassroots movement in the state of Vermont. And all of those together are really going to be needed to get us to where we need to go in 2017, or hopefully 2014.
AMY GOODMAN: Dr. Richter, did you actually move from Buffalo, New York, to Vermont for this purpose, to get one state in the nation to pass single payer? And why did you choose Vermont?
DR. DEB RICHTER: It was one of the major factors as to why we moved here. It’s also an absolutely beautiful state, wonderful schools, great place to raise children. We had two teenage kids at the time, and it seemed like the right thing to do at the time.
But the other reason was, I was trying to do advocacy to get a single-payer healthcare system in New York—very naive of me, I think—and realized I was spinning my wheels in New York. And I really, at that point, felt that it needed to happen in one state or several states, and I figured Vermont was a wonderful place. We have a citizen legislature. Within six months of moving here, I met the governor at the time, was Howard Dean. I met the speaker of the House, who called me up, after writing a letter to the editor. I met all of my key legislators, the heads of committees. They’re very—it’s a very open process. They don’t even have offices. In fact, all of the lobbying and education goes on in the cafeteria. So it’s very accessible. And there’s only 300,000 voters in Vermont. So it seemed like, why not? It seemed like the right thing to do.
JUAN GONZALEZ: And in terms of being able to win support among the public and among the politicians in Vermont, you often talked about your own experiences, the problems that you have dealing with all of the different insurance companies that a medical practice has to deal with. Could you talk about that and how that was able—you were able to use those arguments to convince people of the need for single payer?
DR. DEB RICHTER: Right. I mean, that’s what originally had sort of inspired me to look into how could we fix the healthcare system. I had, in Buffalo, 40 percent of my patients had no insurance, and many of them died young as a result of preventable illnesses, as a result of having been on and off insurance. And I had dozens of examples that—from my own practice, just me—if you multiply that times 700,000, you get an idea of how widespread this problem was.
And in addition, the amount of administrative burden and all of the bureaucracy that was—I’m a primary care physician, and all of the bureaucracy that we had—the hoops we had to jump through just to get patients the care they needed was ridiculous. And we know that 31 percent of the healthcare dollar is spent on administrative costs, transaction costs and paperwork. And just ask any primary care doctor, and they can tell you that they actually live that every single day.
So those are the things that I think resonated with people. I think people who had gone to the doctor 30 years ago and didn’t see all those people behind the counter just pushing paper, it’s something that they all felt. And we’re seeing this. More and more in the middle class is now experiencing what the poorer folks used to experience in terms of access. And I think that now that we have probably a majority of the population experiencing problems, this is something that’s resonating. And I do believe that that’s one of the major reasons that we got this legislation passed this year.
AMY GOODMAN: Dr. Richter, can you explain more who exactly is going to pay for this? Of course, that’s the argument that’s used all over the country. This is what we most understand as Medicare, but you just drop the age of eligibility to zero, to when—the day you’re born.
DR. DEB RICHTER: Well, I’d like to point out that we always ask this question: how are we going to pay for it? I think we should remind people that they’re paying—every penny of the healthcare dollar is coming from Americans. Right now we’re paying—60 percent of it is financed through taxes, 20 percent out of pocket, and 20 percent for private insurance premiums. That’s all coming from us. We either give up higher wages, or we pay higher prices for goods, or we give up paving our roads. All of those things go into financing the healthcare system now.
What this bill will do—and we do not have a financing mechanism set up yet. We did have Dr. William Hsiao, who suggested an 11 percent payroll tax on employers and a three percent payroll tax on the employees could finance a very robust benefit package for all Vermonters. At the time, the Governor felt that we really needed to look into whether that was the best way. But it is—we have committed to broad-based taxes to finance the healthcare system, much like you described, a Medicare for all, which would be—you’d get it at birth rather than waiting 'til you're 65. More than likely, this will be some combination of a payroll tax, perhaps some income tax, perhaps some other taxes, but that will then be in place of premiums and out-of-pocket payments. So, we should keep in mind that what this does is it dedicates financing for the healthcare that we expect to be there for us.
AMY GOODMAN: I should just clarify something. When you said Dr. Hsiao, this very interesting Harvard economist who Vermont hired, who addressed a rare session, a joint session, of the Vermont legislature, with all three—the whole delegation from Congress, the two senators and the Congress member there, as well as the Governor, to lay out what the proposals are. Juan?
JUAN GONZALEZ: Yeah, I’d like to ask you about the response of the doctors of the state. And there’s obviously public support for it, but what about the medical community? What’s been their response to your efforts and to the new plan?
DR. DEB RICHTER: Well, we’ve had some opposition, but there was a public hearing for providers. This was—included hospitals. And what we found was, two to one were in favor of single payer. And that’s particularly true in the primary care specialty. Eighty percent, roughly 80 percent nationally and in other state polls have shown that primary care, 80 percent of them are in favor. And we—our American Academy of Family Physicians Vermont chapter endorsed it. Our Vermont Psychiatric Association endorsed it.
What we find is that there is opposition. Most of it is in the sub-specialties, and these are physicians that are very worried about their income. And that’s what they specified as one of their bigger concerns. And I would try to—you know, I tried to explain to them that if they read the bill, actually, the bill states that the payments for providers will be adequate to sustain their medical practices. And Dr. Hsiao specifically stated that doctors would see no net loss in income under the financing plan that he had worked out. So, I think, as physicians, we—it’s going to take time. They need to be educated. I think they need to get more comfortable with this. And we also want their input. I think if we can get the input of providers and patients, we can build a system that’s unique for Vermont.
AMY GOODMAN: Now, this is very interesting that this is going to happen today in Vermont. If you look at the example of Canada, it was Tommy Douglas, the premier of Saskatchewan, who—what—the poll was taken, calling him the greatest Canadian, who got it in Saskatchewan in the early '60s, when we were having our debate on Medicare in this country. And then it rapidly was adopted throughout Canada. And that's how they got what they call Medicare there, single payer for all there. Interestingly, his grandson is the actor Kiefer Sutherland. Are you thinking that Vermont will be the beginning, just the beginning?
DR. DEB RICHTER: Absolutely. I think Vermont tends to be first. We were the first to abolish slavery. We have many firsts in our state. And the attitude is, is we see a problem and we try to fix it. The idea of negative thinking is not so much a part of our DNA. So, I am very confident that we will certainly embark on this, and I do believe that we will see single payer in 2017.
AMY GOODMAN: And Bernie Sanders, the senator, and Congressman McDermott from Washington state have introduced the legislation for single-payer healthcare into Congress once again.
DR. DEB RICHTER: Right. And I think it’s important to point out also that being—the ultimate goal is a national single-payer, Medicare-for-all system. This is really—what our feeling is is that this is going to be the best way for us to show the rest of the nation that we actually can cover people for less money, but you need a single-payer system to do it.
JUAN GONZALEZ: And how do you respond to those who might say that Vermont is not representative of the rest of the country, it’s sort of the Berkeley of the East, the eastern part of the United States, and that the state is a small state of 600,000 that—without the disparities in wealth and income, without the extreme poverty that you might find in other parts of the country, that what’s workable there might not be workable in the rest of the country?
DR. DEB RICHTER: Well, I think the problems of costs are present everywhere, and those are going to worsen. In fact, they’re going to worsen in Vermont before we get this thing fixed. And I think we’re going to see a lot more converts if that starts to happen. And more and more people are giving up coverage and having problems with getting—accessing healthcare as a result. And as a result of that, I think this will become an offer that few of them will be able to refuse.
It probably will start with some of the blue states first, I think. I envision it as something that would probably happen in the New England states in the Northeast first, before we see it in Alabama or Mississippi. I think that’s way down the road. And certainly, a small state—I think the important thing to remember is, a larger state, that’s all the more reason to have simplified billing and administration and a simplified way of paying for healthcare. It actually argues to having that be more the reason why they should be doing this.
AMY GOODMAN: Finally, the insurance industry and the drug lobby in Vermont, what happened with them?
DR. DEB RICHTER: Well, Blue Cross Blue Shield, which is our major insurer, they have the major percentage of the market, I believe 60 percent of the market. They actually were neutral on the bill. They said that they envision themselves as being the single payer—in other words, the single processor of claims—if we got our single-payer system in 2017. So they did not feel threatened by it. There’s another major insurer that has 15 percent of the market, MVP, that actually issued a statement opposing the bill. The others didn’t say a word. And I probably—I think they probably won’t, but they will find subterranean ways of trying to co-opt this by funding ads and campaigns to try to flip the legislature and convince the public that this is a bad thing to do.
AMY GOODMAN: Well, we want to thank you very much for being with us, Dr. Deb Richter. And of course, we’ll cover the signing ceremony today. Vermont is poised today to become the first state to pass single-payer healthcare and will require a waiver from the government to be able to move forward. Interestingly, in Vermont, the governor is elected every two years, so, Juan, your point about changing climate and what will happen is very significant. Dr. Deb Richter, thanks for joining us, president of Vermont Health Care for All. She practices family medicine in Montpelier, Vermont, and is a past president of Physicians for a National Health Program.
When we come back, we’ll be joined by another Vermonter, not just talking about Vermont, but that’s the environmentalist Bill McKibben. The horrible tornadoes, the powerful tornadoes that are killing hundreds, we’ll talk about what their connection is to climate change, to global warming. Stay with us.