CASE 9: Green Mountain Care
Peter Shumlin assumed office as Vermont’s governor in January 2011. Like all four of his Democratic primary contenders, he had run as a supporter of a single-payer health plan. The outlook was good, given the state’s small, homogenous, and largely liberal population; its history of leadership in health policy; the governor’s electoral mandate; the recent passage of the ACA at the national level; and the policy development foundation that had already been laid in the state.
The previous year, the legislature had passed Act 128, “An act relating to health care financing and universal access to health care in Vermont.” Republican Governor Jim Douglas, who had announced he would not seek reelection, allowed it to become law without his signature on May 27, 2010.
The goals of Act 128 included: (1) providing universal health insurance to all Vermonters under a plan that would give them equal access to a standard
benefits package; (2) controlling medical costs; and (3) creating a healthcare system that emphasized primary care and focused on prevention and wellness. The Act also established a commission and directed the commission to hire one or more consultants to proposal three design options— a single-payer system, a public option that would give state residents an alternative to private insurance plans, and “a third and any additional option [that] shall be designed by the consultant.”
The Consultants’ Report
On February 17, 2011, roughly a month after Shumlin’s inauguration, the state received a 203-page report—“ Health System Reform Design: Achieving Affordable Universal Health Care in Vermont”— that provided three options as required by Act 128 (Hsiao, Kappel, & Gruber, 2011).
The consultants who authored the report were William C. Hsiao and Jonathan Gruber, economics professors at Harvard and MIT, respectively, and Steven Kappel, founder and principal consultant at Policy Integrity, LLC. Hsiao had experience with the design and implementation of single-payer systems in other countries such as Taiwan. Gruber was an adviser to Rep. Nancy Pelosi and consultant to the White House during the development of the ACA, and Policy Integrity develops and evaluates policy alternatives in areas that include health care.
The report contained several pages devoted to a political feasibility study that the authors referred to as both a stakeholder analysis and a “political landscape analysis” (p. 17). (Researchers employing the term political landscape typically focus on identifying which actors have what levels of power and the relationships between them.) The first step was a literature review to understand the state’s history around health policy and identify its major health-related institutions. The second phase primarily consisted of key informant interviews.
In a series of 64 confidential interviews, researchers spoke with almost 120 people. Interview subjects included legislators (15), members of the executive branch (6), hospital administrators (31), healthcare providers (23), representatives of large businesses (10) and small and medium businesses (13), union officials (11), health reform advocates (10), advocates from other issue areas (7), and insurance company executives (2). Most interviews were conducted in person with a pair of interviewers. The researchers also considered information gathered in “less formal stakeholder engagements.”
“Following our interviews, we categorized our finding according to key themes, recorded primary concerns across stakeholder groups, and compared current findings to those from our historical analysis” (p. 18).
They then determined the key interests and concerns of different sectors and identified policy constraints— design options that would be politically infeasible because of strong opposition from highly interested and engaged groups with significant economic and political power. Hospitals would vehemently oppose reductions in their reimbursement rates, for example. They wanted predictable and sustainable funding, but were not attached to the source of the funding. Businesses were wary of direct government control of the system and favored a third-party administrator protected from political influence. There was widespread resistance to reducing benefits.
The analysis did not simply test the feasibility of the various options; the results were used to shape the single-payer plan recommended in the report.
In contrast to previous reports on state-based single-payer plans, in our design process we explicitly considered the political landscape and the fiscal, legal, and institutional constraints on the reform…. We therefore proposed a public-private single-payer system that was financed through payroll taxes and governed by an independent board, and that offered a generous benefit package— while at the same time transforming the payment system and reforming the medical malpractice system.
Hsiao et al. (2011, p. 1233)
