During the healthcare segment of the pre-session legislative briefing on the state of Vermont’s economy, Senator Alison Clarkson (D-Windsor) piped up, “At the risk of asking the dumbest question of the day, and having been around when our healthcare costs were $2 billion a year and not $10 [billion], why in the hell do we have the highest healthcare costs in the country?” It wasn’t a dumb question. It was quite a good question. What’s dumb is not knowing the answer – and it’s YOU! You and your party and three decades of passing progressive policies aimed at making healthcare “free.”
PJ O’Rourke, in his brilliant 1991 book, Parliament of Whores, quipped, “If you think healthcare is expensive now, wait till you see what it costs when it’s free.” Well, here we are!
A telling slide provided by Blue Cross Blue Shield comparing prices for medical services showed an MRI at UVM Medical Center cost $6,520. At Dartmouth, the same MRI costs $4,844. At an independent facility, it costs just $1,799. A colonoscopy? $5,609 at UVMMC, $3,626 at Dartmouth, and $1,865 at an independent. Lab work? $117, $98, and a mere $18, respectively. Delivering a baby? $17,373, $12,471, and only $2,870 – nearly $15,000 less at an independent provider.
The problem in Vermont is that the Left has made a concerted effort to create virtual monopolies in healthcare services via UVMMC and health insurance via Blue Cross Blue Shield, driving private, independent healthcare providers out of business and into UVMMC, chasing alternative health insurance companies out of state, and regulating the favored, chosen survivors to the point where they are de facto government programs. When their dreams of single-payer healthcare died in 2014, the backdoor approach to achieving the same goal has been to create “single providers” under the delusion that competition is inefficient and profits drive up costs to consumers. So, again, here we are!
As Representative Anne Donahue (I-Northfield) pointed out in the discussion following Clarkson’s not-dumb question, “If you want to go back twenty-five years or so, a little more, we were one of the lowest cost in the nation…. Now we’re at the highest.” What happened over that quarter-decade-plus? Guaranteed issue and community rating mandates for insurance (1993), Catamount Health, a compromise on the first single payer attempt (2006), Green Mountain Care, aka Single Payer (2011), OneCare Health (2016), and countless other regulations. All government interventions into the marketplace to “make healthcare more affordable” and increase quality and access. As with pretty much every government intervention into the marketplace with these ostensible goals – seriously, folks, is this not obvious by now – IT DID NOT WORK, and, in fact, had the opposite effect.
Monopolies are not efficient or cost-effective, and government-sanctioned monopolies are even worse, as they turn the industry and the politicians into partners in crime, cutting consumers largely out of the equation. This was the goal, and now we are paying the price – figuratively and literally.
Amy Spear of the Vermont Chamber of Commerce spelled out just how dire the situation has become. Healthcare “costs” are directly affecting wages, hiring, workforce retention, and ultimately the affordability of life for Vermont families. This is not just a business issue.”
Spear laid out a comparison of Vermont to New Hampshire that is striking. Vermont has only two health insurance carriers versus three in New Hampshire. Vermont offers thirteen exchange plans compared to 78 exchange and 163 off-exchange plans. The family plan in Vermont exceeds $2700 per month, while comparable New Hampshire plans are “significantly lower.” For small employers, a silver plan in Vermont for a five-employee business costs over $8500 per month, while in New Hampshire, options range from just over $5000 per month to just over $7000.
Spear concluded, “Employers are telling us… Annual double-digit [insurance] increases crowd out wage growth and training. High premiums paired with high deductibles leave employees underinsured and financially strained, and some small businesses are dropping coverage entirely, making it harder to attract and retain talent. These pressures feed directly into Vermont’s competitiveness challenge that we face.”
On the general economic front, Spear described a particularly bleak picture. According to the Chamber’s recent business climate survey, “Nearly three-quarters of Vermont businesses rated Vermont’s business climate as three or below. More than three-quarters of respondents described Vermont’s regulatory environment as not conducive to growth. And a majority said Vermont’s tax system negatively affects investment decisions, especially when combined with escalating healthcare costs. Workforce growth is stagnant… and only 19 percent expected growth this year. And many employers told us they are one more increase away from dropping coverage, raising prices, or cutting jobs.”
here are many factors affecting the cost of healthcare in Vermont that we can’t do much about: we have an aging population and older people need more healthcare, we have a small population creating challenges of scale, and we are a rural state. But the biggest problems we face are self-inflicted. Overregulation specifically aimed at eliminating competition by driving private, independent healthcare and insurance providers out of the marketplace. These things we can fix. But that would end the lucrative grift of being able to charge $6,520 for an MRI without having to compete with someone who could do the same thing for less than a third of the price.
