McClaughry: Let’s re-open the health care debate

Photo by Karolina Grabowska

by John McClaughry

On August 12 Vermont Digger’s health care reporter Kristin Fountain headlined her story “Nearly all of Vermont’s hospitals are seeking double digit percentage increases in income from patient services for 2024 over 2022, setting the stage for a likely battle with health care regulators.”

At about the same time the Green Mountain Care Board, the state’s regulatory agency, issued a decision reducing Blue Cross Blue Shield of Vermont’s individual premium rate increase request from 18.0% to 14.0% and its small group plan request from 17.5% to 13.3%.

These requests for increases are quite significant, well above the effects of overall price inflation, and without any significant increase in patient populations.

John McClaughry

How a government regulatory board sets allowable prices is a mysterious process. I daresay 95% of our legislators have very little idea how the GMCB goes about its business. To arrive at a government-allowed increase for insurance rates, for example, the GMCB is required to “determine whether [the rates] are affordable; promote quality care; promote access to health care; protect insurer solvency; are not unjust, unfair, inequitable, misleading, or contrary to the laws of this State; and are not excessive, inadequate or unfairly discriminatory.´ This charge does not admit to an objective determination.

Not surprisingly, the hospitals and insurance companies petitioning the Board present a long list of explanations about why extraneous circumstances absolutely require their requested rate increases. They hope that they’ll still be able to charge enough to get by when the Board, created in the name of “cost containment”, changes 18% to 14%.

Hamilton Davis, a longtime advocate of “health care reform”, has written “it was always true that the more important aspect of reform has been cost containment in the delivery system. Failure to rein in [Vermont’s Medicaid] inflation rate would destroy any reform effort, single payer or anything else. The bedrock question, therefore, is how to contain costs, and not just damp them down for a year or two or three, but set them on a permanent track at a level no higher than the ability of society to pay the bill.”

Let’s take a quick trip through 30 years of “health care reform”. In 1994 Gov. Howard Dean, aspiring to be “America’s young doctor-governor, offered a German-inspired “regulated multiplayer” health insurance plan. Single-payer advocates again pressed to put the government in control of all financing. Both proposals crashed and burned. In 1995 Dean recognized that a system reform was out of the question, and said he would work to expand Medicaid to ever higher income families. He did, and costs soared.

In 2011 new Democratic Governor Peter Shumlin purchased the Hsaio Report as the infallible road map to single payer. However the legislature wouldn’t buy all the provisions that Dr. Hsaio insisted were essential. When the revised proposal was costed out – three years later – Shumlin sadly pulled the plug.

But the idea of government controlled health care financing lives on. In 2016 Shumlin bought into the “all payer” model, built around a monopoly Accountable Care Organization, now known as One Care Vermont. But it didn’t reach full monopoly status, and soon became the obvious captive of the aggressively expansive UVM Health Network. Its operating principle is coerced cooperation leading to “integration”, aka consolidation.

At the center of this narrative is the determination of “health care reformers” of all stripes to increase government control of health care resources, in an effort to meet all the requirements laid upon it by legislators. Within that regulatory system, all the actors – providers, insurers, politicians, and government bureaucrats – will press every argument available to protect their current and future interests.

There is a wholly different and viable model for quality health care and cost containment, based on market competition and consumer choice. But promoting it in Vermont would disruptively alter the investments in and prospects for what we have today, to the disadvantage of all of today’s stakeholders. The best known model is Singapore’s, and its components are Medisave, Medishield, and Medifund.

Dr. Phua Kai Hong, of the National University of Singapore, listed as crucial components “the creation of incentives for responsible behavior and the efficient delivery of services; the discouragement of overconsumption through cost sharing; the regulation of hospital beds, doctors, and the use of high cost medical technology; the promotion of personal responsibility; targeted government subsidies; and the injection of competition through a mix of public and private-sector providers.”

This is drastically different from 40 years of Vermont’s muddled command and control efforts. Singapore’s is not a wholly free-market solution, but it has worked for over sixty years. Granted, there are many important differences between Singapore and Vermont, But it’s long overdue for Vermont to look beyond the many “stakeholders” jealously guarding their interests, and start looking at tested – and affordable – real world alternatives.

The author, a Kirby resident, is founder and vice-president of the Ethan Allen Institute. To read all EAI news and commentary, go to

Categories: Commentary

15 replies »

  1. Remove and destroy the WHO, WEF, UN, NIHS, CDC, UN, AMA, ADA, Rockefellers, Gates, Epstien’s client list, et al., problem solved. The health care industry is all about profit, not for health. They lost all legitimacy when all their lies and corruption resulted in death and disability rates at all time highs. Today’s health care is a death cult for profit. The proof is published and being litigated globally.

  2. Went to my favorite shoe store last month, shoes I used to pay $150 for are now $250. Last I checked, hospital personnel wear shoes.

  3. Yes, inflation is a criteria, but not the only criteria to consider. Inflation needs to be addressed in a larger, more detailed conversation.

  4. For decades, both the state and federal governments have been “regulating” healthcare. For the past 30 years, Vermont legislative democrats have been obfuscating, enabling and growing Vermont’s heath care industry into an overpriced morass of regulation and compliance, with healthy successful outcomes being low on the list of legislative goals. The billions of dollars at stake in Vermont is staggering. Covid 19 response by the federal, state and health care industry should have served as a stern warning to all- That government meddling in the health care industry has corrupted same, and will continue to corrupt until utter failure of the industry.
    Britain and Canada should be glaring examples to the US, but instead we seem to revere the idea that socialized healthcare is as dangerous and corrupt as the present system.
    Amazingly, UVMMC mailed out solicitations for donations recently. I’ll bet the monies received won’t go toward shoes for the staff.

  5. Re: “the creation of incentives for responsible behavior and the efficient delivery of services;”.

    Say no more. The only way to create these incentives is through a free market, be it in healthcare, energy, or education. Any government subsidy directed to a specific provider, instead of the consumer in need of the service, distorts these incentives.

    Resist the urge to tell people you know what’s best for them. If you’re compelled to assist those who cannot otherwise help themselves, contribute as you see fit. But don’t force others to contribute on your behalf. Doing so is the beginning of the end to ‘responsible behavior and the efficient delivery of services.’

  6. My body, my choice.
    Butt out of betting on my health.
    Stop profiting from poor advice on how to BE healthy — or none at all.
    Its not HEALTH and HEALING.
    Its dealing and stealing.
    God help you if you go for a second opinion.

  7. “The latest Best Countries rankings examined how people around the globe perceive the quality of the healthcare system in their countries of residence, and found Denmark to be perceived as having the most well-developed public healthcare system in the world. Sweden ranked 2nd on the list, followed by Canada in 3rd place.
    The quality and efficiency of a country’s health care system can have a massive impact on its inhabitants’ quality of life. The health of a nation depends largely on how the system can cater for their people, which is why a good public health care system is so important.

    10- New Zealand
    The healthcare system in New Zealand is state-sponsored and very good quality. It is funded through taxes, and provides free or subsidised medical treatment for residents.

    9- Austria
    Austria has a high standard of healthcare. Paying into the government health insurance scheme is compulsory for both Austrians and expats, with excellent medical facilities and services funded by the taxpayer.

    8- France
    France has both state run and private hospitals and both maintain a similar degree of excellence. While having private health insurance isn’t essential, it is prudent to have cover when you’re living in France.

    7- Australia
    Australia’s healthcare system has two main parts: the public health system, and the private health system. Since 1984, Medicare has been the Commonwealth Government’s universal health insurance scheme. This provides Australian residents with free treatment in public hospitals.

    6- Netherlands
    Healthcare in the Netherlands is covered by two statutory forms of insurance: Zorgverzekeringswet (Zvw), often called ‘basic insurance’, covers common medical care; and Algemene Wet Bijzondere Ziektekosten (AWBZ) covers long-term nursing and care..

    5- Germany
    The healthcare system in Germany is very good, but expensive. Health insurance is mandatory, and most expatriates will have it added to their employee contract.

    4- United Kingdom
    Healthcare in the UK has proved to be reliable and convenient for citizens and expatriate workers. The National Health Service, Scottish and Northern Ireland state programs provide many options for emergency medical treatment.

    3- Canada
    Canada’s publicly funded health care system is a group of socialized health insurance plans providing coverage to all Canadian citizens and permanent residents. Canada holds a remarkably high life expectancy rate, which many attribute to the efficiency of its health care system.

    2- Sweden
    The Swedish health care system is characterized by high standards of quality care and above-average healthcare spending. Only about 600,000 Swedes have a private health plan, which is usually covered by their employers and can be helpful to skip queues for treatment.

    1- Denmark
    The Danish universal health care system provides Danes with mostly free medical care and is predominantly financed through income tax. All permanent residents are entitled to a national health insurance card, and most examinations and treatments are free of charge.

    Source: Based on information from Best Countries project by U.S. News, The Guardian, International Health Care System Profiles by The Commonwealth Fund and Canadian Health Care.

    We in the U.S. have the world’s most expensive medications and most profit taking. Insurers make billions from paperwork while the U.S. life expectancy drops- thanks to people like McClaughry. STOCKHOLDERS first, the American people, the health and strength of our nation somewhere around 10 or 12th. He he denies Climate Change, too. Rich stockholders always first with the E.A. “Institute”. (Love all those “quotation marks”, John.

    • False equivalencies perhaps.

      “The healthcare system in New Zealand is state-sponsored and very good quality. It is funded through taxes and provides free or subsidized medical treatment for residents.”

      This sounds like a Bernie Sanders remark. Everything is ‘free’ or ‘subsidized’ until one considers who is doing the gifting or providing the subsidies.

      What is it about the concept of funding something through taxes that makes the reader actually believe something is ‘free’?

      Sweden and Demark have some of the highest taxes in the world. New Zealand isn’t far behind. Almost everything in those countries is free, until someone has to pay for it.

    • Now consider the much-lauded mental healthcare program (SOS Children’s Village model) cited by Bill Schubert (VT Digger) and VDC’s resident progressive, Tom Evslin, [see Vermont Needs a New State Mental Hospital].

      What I pointed out a day or two ago, an observation that apparently everyone missed, is that the SOS Children’s Village model isn’t a government organization. It’s private. It accepts no government subsidies and, therefore, is not beholden to the kind of regulation that apparently corrupted Vermont’s State-run institutions.

      And the SOS Children’s Village model is an international corporation, operating in several countries. It relies completely on voluntary donations.

      Is it free? No. But it’s not force-fed with tax revenues either.

    • Climate change – code for Arson. Socialist medicine is not all it is advertised to be per your sources. Since 2020, we know WHO is running the show afterall and it has nothing to do with health – humans are now free range lab rats and per the WEF, hackable!

  8. The whole problem with the Vermont Health System is that 75 percent of the patients are either on Medicaid or Medicare which pay Hospitals and doctors 25 cents on the dollar while five percent pay nothing and the other twenty percent (working people) pay way to much to keep the system a little above water! There lies the problem! Old Bernie wants Medicare for all, if so all hospitals would be bankrupt in one year 👎👎😢🇺🇸🇺🇸🇺🇸🇺🇸🇺🇸

    • Mr. Swierad, I think you will find just the opposite to be true. Because Medicare pays doctors directly, and the consumer has little if any input, the compensation is higher than it otherwise would be.

      I recently spent a couple of out-patient hours (no more than that) having some common basal cell blemishes removed, two of which required stiches. The hospital, doctors and lab techs charged Medicare more than $10,000 for the procedure, and Medicare paid most of the charges. That Medicare pays only twenty-five cents on the dollar is a significant exaggeration – at least in my anecdotal experience.

  9. Food stamps need to be a Human Right before healthcare.
    Food, Clothing, and Shelter are the three needs.
    Healthcare is some BS to believe in.
    Does healthcare cover my massage?
    My trip to the hot springs?
    My food (which is my medicine)?
    Healthcare is just funneling money and power to pharmaceutical companies.
    Anyone pro healthcare is pro furthering the class division.
    They must be anti-racist too (which just promotes racism).
    Society is garbage because most people are smart as wood.
    Also, all our leaders are psychopaths or sociopaths.
    The loudest most persistent person wins.

  10. Most of the comments are missing a major point, we do not have a health care system. We have a crisis care system. Medical doctors do not know health care, that is not their training. That’s why the cost keeps going up. Has the hospital system in Vt. grown in concert with the population? No, it has risen far beyond population growth. They do not profit on heathy outcomes. Illness is their bread and butter.

    What needs to happen is for the state/ country to develop a real health care system if they want to make it affordable. Nothing else will work. Medicare, under the Chiropractic heading states, “we do not pay for the promotion or maintenance of health.” Does this not say it all!! 95% of health care cost is crisis and 5% real health care.

    To solve this problem we need to put trained health care providers in charge of health care and leave crisis care to the MD’s. That’s right, the only way to reduce cost is to reduce the reliance on the medical system. Reverse the equation to 95% health care and 5% crisis.

    So let’s talk to our legislators about properly funding health care providers, Chiropractors, Naturopathic doctors, Acupuncture, nutritionists and anybody else licensed to practice real heath care. Nothing else will work, NOTHING!!

    • You’ve made an excellent point. But beware of ‘mission creep’. Our legislators are demonstrably unqualified to determine anything ‘proper’. And so are we, as an electorate.

      Again, I differ to Milton Friedman – “if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it.”

      “The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.”

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