GUY RAZ, host:

We're back with ALL THINGS CONSIDERED from NPR News. I'm Guy Raz.

Vermont is about to go where no state has gone before, to a single-payer health care system.

Single-payer was the dream of many liberals when Congress began debating a health care overhaul a few years back, but the idea was quickly abandoned here in Washington.

Not so, though, in Montpelier, where this week Governor Peter Shumlin says he'll sign a law that will ultimately give every Vermonter a state-issued Green Mountain Care insurance card.

Governor PETER SHUMLIN (Democrat, Vermont): Basically what our system will do is treat health care as a right and not a privilege. We want to design a system where health care will follow the individual and not be a requirement of the employer, which we think will be a huge jobs creator.

And most importantly, a publicly financed system. We all pay - where we use our health care dollars to make us healthier, not to enrich insurance companies' inefficiency, waste and the current fee-for-service system, which bills providers based on how much service they do as opposed to an incentive to keep us healthy.

RAZ: So essentially you will have a single-payer system but not on May 27th. I mean, people don't wake up the next day and all of a sudden have universal health care in Vermont.

Gov. SHUMLIN: That's correct. We're using the federal bill as a bridge to the system. When the federal bill goes into effect in 2014, our system will go into effect on that same date.

RAZ: Now, some critics of this plan say the big problem is does not address the issue of financing.

Gov. SHUMLIN: Well, that's not really true. We've been very clear it's going to be a public-financed system, and obviously, there's only so many options that one can use.

But I keep saying is the problem with health care reform across America so far has been that no one has gotten cost containment right. What I find alarming is that so many of us are willing to pretend that everything's going to be okay if we stick with the current system.

So we're taking the bull by the horns up here in Vermont. We think we can get it right. And if we do, we think it's a huge jobs creator.

RAZ: Okay, explain how this will work for the average Vermonter who does not work for the state, somebody who works for a company. What happens?

Gov. SHUMLIN: We're going to design a system that spends less. Now how are we going to do that? When you come out of your provider's office, our single-payer entity will say, when you hit the desk, check, cash or credit card?

You'll adjudicate the bill right there for your portion. That saves eight to nine cents on the dollar. So that's low-hanging fruit. In a Vermont system, our people estimate that's about $500 million a year, big money.

Second, that card will be a pipeline to your medical records so that you can see everything that happened medically to you, the provider, throughout your lifetime and manage your care based upon that information.

Now, right now, about 30 percent of Vermont tests are duplicative because the next provider doesn't know what the last provider did to you. The list goes on and on. So that's a tool for better management of health.

And a third big savings will come from a system that reimburses providers based on health outcomes, instead of the current system, where they reimbursed for the number of services that they put you through.

RAZ: The single-payer system, as you know, was abandoned last year in the debate over the national health care plan. Now, the plan that was passed by, primarily by Democrats in Congress. Why do you think you can make this work in Vermont?

Gov. SHUMLIN: Every time someone asks a question about the system, I ask this question: Is it different than the current system? In other words, are you asking about a problem that doesn't exist now?

The point is, the current health care system is sinking small businesses, that as I mentioned are spending more and more money on insurance for less and less coverage. So this system is not sustainable.

I'm convinced that if we're the first system in the country where health insurance is paid for by all, follows the individual, we get the jobs because we take a tremendous burden off their backs that they can't right now keep up with.

RAZ: Presumably a sizable portion of your state's population receives Medicare. So they are insured under the Medicare system. How will that work with Green Mountain Care? I mean, will those people remain on Medicare and some people in the state on Green Mountain Care, or will it be different?

Gov. SHUMLIN: We're working together with the Obama administration to get a number of waivers, but one is for Medicare and Medicaid. We're not asking for one additional federal dollar, but we're asking for the state flexibility to spend those dollars as we see fit.

RAZ: That's Vermont Governor Peter Shumlin, speaking to me from Vermont Public Radio. Governor, thank you so much.

Gov. SHUMLIN: Hey, thanks so much for having me.

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