State-Based, Single-Payer Health Care — A Solution for the United States? | Health Policy and Reform

by William C. Hsiao, Ph.D.

The United States faces two major problems in the health care arena: the swelling ranks of the uninsured and soaring costs. The Patient Protection and Affordable Care Act (ACA) makes great strides in addressing the former problem but offers only modest pilot efforts to address the latter. Experience in countries such as Taiwan and Canada shows that single-payer health care systems can achieve universal coverage and control inflation of health care costs. Because of strong political opposition, however, the U.S. Congress never seriously considered a single-payer approach during the recent reform debate. Now Vermont, wishing to solve the intertwined problems of costs and access through systemic reform, is turning in that direction. Vermont Governor Peter Shumlin campaigned on a platform of single-payer health care, and Democratic legislative leaders are committed to this approach.

In Vermont, the status quo in health care has become untenable. Despite numerous reforms over the past 15 years, Vermont’s health care costs are escalating rapidly, straining the state budget, household incomes, and employers’ bottom lines. More than 7% of Vermonters are uninsured, and another 15% have inadequate insurance.

The Vermont Legislature passed Act 128 in May 2010 authorizing a study to find the most viable and practical systemic solutions to these problems.¹ The goals are clear and ambitious: Vermont wants to achieve universal coverage, reduce the rate of cost increases, and create a primary care–focused, integrated delivery system. The question is how to achieve those goals. My team of health system analysts at the Harvard School of Public Health was commissioned by the Vermont Legislature to develop and evaluate three options for health system reform and determine which option would best achieve the stated goals.
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