7-14-16 – Democrat gubernatorial candidate proposes EVEN MORE taxes!

by Rob Roper

Here’s the latest from Peter Galbraith: a 2% payroll tax ($240 million) to pay for what he calls “universal basic [health] care.” Add this to the new taxes necessary to pay for “free” college, “free” childcare, and, of course, the Carbon Tax.

The way a universal primary care system would work is the state would pay primary care physicians to maintain an office on a per capita basis. (“Under a publicly financed system, primary doctors need only keep track of the number of patients that they have.”) The patients would then come and go as they please, assuming they can get an appointment, “with no cost sharing by the patient.” Folks would still need to purchase insurance for non-basic or catastrophic care.

The model is very loosely based on what some private practices term “concierge” medicine. Here the doctor charges the patient a flat annual fee (usually between $1000 and $2000 annually), which covers the overhead and salaries of running the practice. In return, the patient receives pretty much unlimited access to that doctor’s services. It’s a good system for delivering high quality care, but what makes it work in the private sector is the ability of these practices to cap their total number of patients at around 400-500. This ensures the ability of the doctor to eliminate paperwork, spend abundant, quality time with the patient, and still have a life of his or her own.

Traditional practices in Vermont have, however, an average of about 2400 patients. Galbraith’s budget rounds out in easy math to less than $350 per Vermonter (a little more if Medicare recipients are exempt) after factoring in Galbraith’s estimate of administrative costs born by the state. A doctor running such a practice would have to have a very large number of patients to be financially viable. This combination of overcrowding and the removal of co-pays and other gatekeeper costs would likely cause a serious run on medical services. Imagine your favorite restaurant switching from a la cart to “all you can eat” for a mere 10% increase in the check. Do you think that would work out in the restaurant’s favor?

The other obvious flaw in the plan is that doctors under a scenario in which all they have to do is “keep track of the number of patients they have” would be incentivized to take on only healthy customers who don’t require a lot of care, and refer the sickies to the other guy down the street. (Not to mention the temptation to fabricate patients out of thin air.) Politicians and taxpayers wouldn’t stand for this very long and one suspects that the paperwork for keeping track of who a practice’s patients actually are, and ensuring that doctors are treating a broad population would end up being pretty complicated.

And this raises the question of who picks one’s doctor? Does the individual get to choose? Does the Doctor get to say yes or no? Does the state assign? The only way to ensure that all the healthy folks don’t self-select one doctor, or one doctor accepts only healthy patients, is for the state to assign patients to doctors, either strictly on an individual basis or loosely by some demographic formula. This, of course, is fraught with problems of its own, the United States being a free country and all.

Galbraith does do a service in pointing out that independent doctors are paid less for performing the same services than their counterparts who work directly for hospitals. There is an overall hostility in government toward independent practices that is neither healthy nor desirable. Ending this policy bias and creating price transparency for all medical services should be a top goal for whomever ends up in Montpelier next January.

The real solution to our healthcare issues is to increase the supply of doctors in this state, which means we have to make Vermont an attractive place to practice medicine. Generally, that means getting government out of it as much as possible.

Rob Roper is president of the Ethan Allen Institute. 

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