Democratic gubernatorial candidate Donald Berwick has laid out some ambitious goals, among them ending chronic homelessness and eliminating childhood poverty. But his most sweeping proposal — arguably the most sweeping proposal of the political season — is moving Massachusetts to a single-payer or “Medicare for all” health care system.
Eight years after the state became the first in the country to establish near-universal coverage, Berwick is reaching for an even bigger prize sought by liberals: shifting from privately financed care to a system funded by the government.
The candidate says replacing a welter of insurance companies with a single public payer would simplify a complex system and save hundreds of millions of dollars in administrative costs that could be redirected to other needs: job creation, education, and infrastructure.
“The opportunity is vast,” said Berwick, who ran Medicare and Medicaid for the Obama Administration for 1½ years.
But observers say the hurdles to single-payer health care are many. For one thing, it would require a tax increase. For another, it can be a complex idea that is difficult to explain in campaign soundbites. That may explain, in part, the candidate’s poor standing in the polls with just over a week to go until the Sept. 9 Democratic gubernatorial primary.
It’s also unclear that state legislators or the public have the appetite for another major health care overhaul. And powerful interests, including the insurance industry, are arrayed against a single-payer system that would sharply curtail their business.
“On the face of it, it feels like the obvious solution, and yet the transformation is really difficult,” said Katharine London of the University of Massachusetts Medical School’s Center for Health Law and Economics.
The basic mechanics of single-payer are fairly straightforward. Instead of employers and employees paying an insurer such as Harvard Pilgrim Health Plan or Tufts Health Plan, they would pay the government through a new payroll tax. Then, the government would issue a health card, to be used at the existing network of health clinics and hospitals.
Single-payer advocates say there is plenty of evidence for the efficacy of this approach. Developed countries with national health care systems, they say, consistently deliver better outcomes at lower cost.
One recent study from the Commonwealth Fund, which studies health care, examined quality, access, efficiency, equity, and health outcomes in 11 developed countries and ranked the United States last.
But defenders of the American system say it fosters innovation, pointing to major advances in medical technology in recent decades. And they say the botched rollout of the federal healthcare act, in Massachusetts and across the country, shows government should not have a larger role in health care.
“Massachusetts has just gone through a pretty gruesome experience with implementing the federal Affordable Care Act,” said Republican gubernatorial frontrunner Charlie Baker, a former health insurance executive. “It should be a real cautionary tale for everybody here about putting all your eggs in one basket.”
Baker favors a targeted approach to health care, one that would zero in on specific issues, such as inadequate pay for primary-care physicians and a lack of transparency in pricing.
Attorney General Martha Coakley, the Democratic frontrunner, has laid out a similarly targeted approach. Treasurer Steve Grossman, the third Democrat in the race, has charted a middle course, saying he will host a public conversation on single-payer but not fully committing to the idea.
If Massachusetts does pursue single-payer, it would not be the first state to do so. Governor Peter Shumlin of Vermont, a Democrat, campaigned on the issue in 2010. The state Legislature voted a year later to transition to single-payer and officials expect to make the move in 2017.
Deb Richter, a family physician in Montpelier and chair of Vermont Health Care for All, says getting supportive leadership in place was vital.
“You really had to have all the stars lining up and we did,” she said. “First off, you need a governor who is fully behind it and actually pushing for it. Secondly, you need grassroots support and we have a lot of that. And you need the right legislature, we have that too.”
But she said there were other factors, too. Vermont, she noted, has a relatively small number of hospitals and just one major insurer, Blue Cross Blue Shield. That meant fewer possible opponents to single-payer and a less complicated transition to the new system. Blue Cross, in fact, is expected to administer large portions of Vermont’s publicly financed program once it launches.
London, who completed a major cost analysis of the Vermont single-payer system last year, says the Massachusetts landscape is quite different. Reform, she said “would be far more complex here, because we have a multiple of hospital systems and a multiple of insurers and a lot of vested interests in the system the way it is now.”
Gerald Friedman, an economics professor at the University of Massachusetts Amherst who favors a single-payer system, said the most realistic route to a publicly financed system in the Bay State is through a series of slow steps.
One possible step, he said: The state government could follow Italy’s lead and buy huge quantities of drugs at discounted prices, reselling them, at cost, to pharmacies.
But Eric Linzer, a spokesman for the Massachusetts Association of Health Plans, which represents most of the large insurers in the state, said a major overhaul of the system is not a reasonable way to rein in expenses. Instead, he said, the state should focus on implementing a 2012 law designed to contain health care costs.
Berwick says he would push to pass a single-payer system through the Legislature in his first term. He argues cutting costs will not be the only advantage to an overhaul.
With the government as the sole payer, he said, it will have “much more leverage . . . to push the health care system in the direction we want.” That would mean a greater focus, he says, on prevention, wellness, and managing chronic disease.
But first he has to sell the plan — to voters, who have not yet rallied around the idea in large numbers, and if he is elected, to the Legislature.
There, analysts say, he will face a number of obstacles: not least of them, convincing legislators to go along with an eye-popping tax increase.
Friedman estimates that Massachusetts employers and employees are spending about $33.6 billion on health care premiums now.
The state, he said, would have to replace that with about $30 billion in taxes — swapping the weekly payments companies and workers make to insurers for a new state levy.
Most businesses and employees would see no real hike in costs, he said. But approving what would amount to largest tax increase in state history could be a major challenge.