MONTPELIER, Vt. – Longtime reform advocate and Vermont family physician Dr. Deborah Richter hailed Wednesday’s report of health system expert William Hsiao to the Vermont Legislature, particularly Hsiao’s findings that a single-payer system would be the best remedy for what he called the state’s “broken” and “unsustainable” way of paying for care.

“Dr. Hsiao’s team of researchers found that a streamlined, single-payer system for financing health care would save money by reducing excess paperwork and bureaucracy, cover everyone in Vermont with no increase in health spending, reduce or eliminate patient co-pays, promote job growth and economic development, and control costs,” Richter said.

“Although the devil is in the details, the broad outlines of his single-payer proposals are very promising,” she said. “They represent a major step in the right direction.

“This thoughtful, evidence-based approach to solving our state’s health care problems – an approach that involves our new governor, our congressional delegation and state lawmakers poised to take swift, positive action to translate reform proposals into law – stands in stark contrast to the noisy goings-on in Washington this week,” Richter said, alluding to the Republican party’s symbolic vote in the House to repeal the federal health law.

While her overall attitude toward Hsiao’s draft report was very positive, Richter said that her group, the Vermont chapter of Physicians for a National Health Program, would be making recommendations to improve the single-payer models to maximize administrative savings and strengthen cost control even further. After a period of public comment, a final report from Hsiao is due Feb. 17.

“Only a one-payer system can maximize the efficiencies and cost savings,” Richter said. “So it will be important to fully incorporate Medicare and Medicaid into the system as soon as possible. We will also be recommending the use of single-payer tools like separate operating and capital budgets for hospitals.”

“Optimally, a single-payer program would also prohibit the participation of investor-owned, for-profit delivery systems, which studies show drive up costs and produce worse medical outcomes,” she said.

Hsiao is a professor of economics at the Harvard School of Public Health and an internationally recognized authority on health care systems. Last year he and his team were commissioned by the Legislature to analyze three models for state health reform, including a single-payer model, where private insurers are excluded from the system and all medical bills are paid by a single public or quasi-public authority.

In his presentation to Vermont lawmakers, Hsiao outlined the three models: a public single-payer plan, a plan that builds on the new federal health law but adds a so-called public option, and his team’s recommended plan.

Hsiao’s team found that the “public option” plan would yield the poorest results, having only a very modest impact on reducing costs and having almost no impact on reducing the number of the uninsured.

While citing the merits of a publicly administered single-payer plan, Hsiao’s team ended up by recommending a “public-private hybrid single-payer” model that would be managed by an independent board and that would contract-out the job of claims processing to private and public bidders. A private company like Vermont Blue Cross Blue Shield, for example, could be hired to process the claims, as is done currently by Medicare.

Richter likes the idea of the independent board and says physicians in Vermont favor single payer because it’s the only approach that gives them a voice and negotiating power – something they lack with insurers today. Single payer will also benefit the state’s physicians by simplifying billing and giving them a choice of practice options. “It will make primary care very attractive in Vermont,” she said. “We’ll be able to choose where we want to practice and patients will be able to freely choose their doctors.”

She also would like to see the enactment of a plan that provides for comprehensive care.

Richter practices family medicine in Montpelier, and has pushed for single payer in Vermont for more than two decades. She is a past president of Physicians for a National Health Program, a nationwide organization of 18,000 doctors who favor single-payer national health insurance, commonly referred to as an improved Medicare for all.

“Dr. Hsiao has performed an extraordinary service,” Richter said. “Vermont has an historic opportunity to lead the nation on fundamental health reform.”