Vermont Could Surpass Mass. As Health Reform Pioneer

When it comes to reforming health care, Massachusetts has been the most pioneering state in the nation. But that title could be on its way to going to another state: Vermont.

On Wednesday, the Vermont legislature heard a proposal that would radically change the way Vermonters get insurance and pay for their health care. Bill Hsiao, a professor at the Harvard School of Public Health who redesigns health care systems for countries around the world, made that proposal, and he spoke with WBUR's All Things Considered about what he has in mind for Vermont.

Sacha Pfeiffer: Before you explain the specifics of your proposal, tell us why Vermont isn't happy with the health care system it now has in place. Because just a few years ago, the state passed a law aimed at getting more people covered, lowering costs, and improving care. Has that new law not worked?

Bill Hsiao: That new law worked to some extent, but still leaves roughly seven percent of Vermonters uninsured. But, more importantly, Vermont has experienced rapid cost escalation. The current health care system is not sustainable any more.

Today, you proposed to the Vermont legislature that the state basically adopt a single-payer system. For people who don't understand that term, or whose eyes glaze over when they even hear that term, give us a brief definition of what you mean by that. Are you recommending a health care system entirely run by the government?

No, we're not. It's a system that provides insurance to everyone with a common benefit package. And then, second, channels all the payments to providers through a single pipe.

And would that single pipe be a government pipe?

The Vermont law that commissioned us required us to develop such an option, but we are not recommending a government-run, single payer system; we recommend a public and private partnership.

You recommend that this new government-run health care system in Vermont be paid for by a payroll tax. And that would be a progressive tax, so the more you make, the more you pay. Do you think that when Vermonters hear "new tax," that alone risks killing the idea of this new proposal?

The tax is less than what they are paying in premiums now.

So instead of paying a premium, they would pay this payroll tax?

That would be a decision the employer would make, and the workers.

Massachusetts is typically viewed as the most progressive state when it comes to health care reform. Do you think Massachusetts risks losing ground on the health care front to Vermont if Vermont adopts this proposal?

Unquestionably, Vermont would be the vanguard of the nation.

And how likely do you think it is that Vermont will adopt this?

With the newly elected governor, who is fully in support of the single-payer scheme, and with the legislative leaders who seem to be also unified in support of it, Vermont has a good chance of adopting a single-payer system.