(4/04) The House approved a modest health care reform plan that was scaled down from what Governor Douglas proposed earlier in the year. The bill offers tax credits to small businesses that currently don’t provide health insurance to their employees. It encourages employers to promote health savings accounts and allows health insurance companies to discount premiums as much as 10% to consumers who adopt healthy life styles.

The goals of the House bill were to set the stage for a more comprehensive health reform plan in the next biennium. However, what was passed promotes a market orientated approach that lowers the cost of health insurance, increases the number of insured Vermonters, empowers consumers to be more responsible in the use of health care and lowers administrative costs.

One alternative offered by the House Democrats increased the cost shift by underpaying for cost of services. According to our insurance commissioner, it would increase insurance rates for the small group and private insurance market, just like former Governor Dean did when he expanded Medicaid. Another Democratic alternative was to promote a single payer plan and that sparked a heated debate. Though their proposal was defeated, it clearly defined the political direction they’ll be advocating during the campaign this fall.

I’d like to share with you my views on the single-payer system. Proponents think more government is the answer to our health care crisis? Some constituents also think it is and they advocate expanding health-care to a government controlled single-payer system. I believe that direction is the greatest threat to our health care.

Backers of single-payer claim that if the state pays for everyone’s medical needs, quality will improve, it will be more accessible, and less costly to administer.

From a paperwork standpoint, this sounds attractive. They claim we spend over $400M in health care administration and savings in this alone could cover the cost of the uninsured and lower our total health care costs in the process. They fail to mention that most of the administrative burden is the result of compliance with detailed and sometimes contradictory federal and state regulations. A recent study showed that for every hour of care delivered to a Medicare patient, hospital officials spent about one-half hour complying with Medicare paperwork. You can learn a lot from this failure.

The key breakdown to single-payer is that’s it’s designed to please everyone. However, where it has been proposed in this country, it’s not widely accepted. Oregon voters soundly defeated a single-payer referendum this past November because it would be paid through taxation that was excessive. A Maryland proposal would cost 117,000 jobs and shrink payroll tax by almost $5 billion and would require increases in the personal income tax ranging from 13 to 233 percent.

Health economists have been saying right along that a single-payer system is very costly because consumers are insulated from the direct cost of health care and utilization would skyrocket. They often cite what’s happening in Canada and Great Britain as an example.

Assume Vermonters were willing to increase taxes to pay for a single payer system. Vermont’s state financial resources are limited, as is our tax generating potential. Therefore, the single-payer system would have to employ ways to reduce consumption so that services would match revenue. Options range from shortchanging capital investment in facilities and modern equipment to reducing physicians available for treatment and rationing. We started to do the latter with our Vermont Medicaid program already.

There’re fewer doctors in Britain and Canada per capita than in this country with their single-payer systems. Using their ratios, the U.S. would have to fire around 171,000 physicians and each of the remaining doctors would have to see an average of about 1000 more patients a year. Can you imagine how much time each physician could spend with each patient under those standards? Is there any wonder why so many Canadians come to the United States for treatment?

Countries with single-payer systems experience equipment shortages, lack of treatment beds and operating facilities to accommodate patients’ needs. As a result care is given to those who’d benefit most using a cost/benefit analysis while lengthy and costly procedures have long waiting times for treatment.

Long waits also occur frequently for routine services. A CT scan and MRI in Canada take five weeks and twelve weeks respectively whereas a CT scan for a pet can be done in 24 hours. A coronary artery bypass operation has a 24-week wait and in Britain it takes patients 26 weeks to see a specialist and there are over 1.3 million people on a waiting list for hospital tests and/or treatments. Government provision and allocation rarely results in patient satisfaction.

A single-payer would be a monopoly and not have to compete with business so consumers would get less value for money spent. And, consumers needing costly non-covered procedures or costly medication would have to pay out-of-pocket. Also, consumers would have no option if taxes continued to increase as they are in Canada to pay for the benefits offered. One proposal currently being considered is a 1.5 percent national health-care sales tax added to the current 7 percent goods and services tax earmarked for health.

For those single-payer advocates, big government is not the answer to what ails our health care system. We need incentives created by competition to stimulate innovation, compassion efficiency, and control costs as corrective remedies. The market is far preferable to single-payer to achieve those objectives. If you think you can trust our government with your health care system, think again.

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Thank you for your calls and notes. I can be reached at 658-3975 (home), 1-800-322-5616 or 228-2228 (State House) and via e-mail.

Rep. Frank Mazur
South Burlington