Vermont Governor Peter Shumlin was invited to speak to the annual meeting of Physicians for a National Health Program in Boston on Saturday.

And he did give his speech to the more than 400 doctors, medical students and activists who filled the Seaport Boston Hotel ballroom, touting his “single payer” plan in Vermont and being praised in return for raising the single payer banner. 

But it wasn’t exactly a lovefest.

Dr. David Himmelstein, one of the founders of PNHP, got into it with Shumlin during the question and answer period after Shumlin spoke.

And the back and forth exposed a developing fault line within the single payer movement over the question of priorities — state versus national single payer?

As Obamacare crumbles, single payer forces are eyeing a possible return to the national health care debate — and Shumlin’s “roadmap to single payer” in Vermont has given some activists hope that it will be a model for the nation.

In 2011, Vermont Senator Bernie Sanders introduced federal legislation — the American Health Security Act — that would make it easier for states to pass their own single payer laws. And Sanders will re-introduce similar legislation in the next couple of weeks.

PNHP has endorsed a rival single payer bill — HR 676 — which currently has 52 co-sponsors in the House of Representatives — although not one of the co-sponsors has publicly called for HR 676 to replace Obamacare. HR 676 would create a national single payer system.

It became clear from Himmelstein’s mini skirmish with Shulmin — and in a breakout session later in the day titled “Vermont’s ‘Pathway to Single Payer’ — that Himmelstein has real misgivings about the state by state approach.

“In fact, you are not going to be able to enact a single payer program,” Himmelstein told Shumlin during the question and answer period.

“Yeah we are,” Shumlin shot back.

“Well, by definition, if you’ve got Medicare, Tricare –” Himmelstein said.

“You have written us off before we have tried,” Shumlin responded.

“No, no,” Himmelstein said. “I’m actually just saying what’s true. And that is, you can have a publicly financed program, and as Deb [Richter] said, it won’t be single payer. It will be enormous progress. But let’s not confuse it with single payer because you will give up much of the advantage of the single payer program.”

“Let me just say, I agree with you,” Shumlin told Himmelstein. “But I’m going to try to get the waivers to get everybody [in Vermont] in the pool — everybody. I want everybody in the pool.”

“That of course will take an act of Congress,” Himmelstein answered.

“That’s right,” Shumlin said. “But if you help me get rid of those Tea Party nuts in 2014, I’ll get it done.”

“The other source of concern is the movement to ACOs (Accountable Care Organizations) in your state,” Himmelstein said. “And it is an ACO that is a for profit corporation [OneCare Vermont] that is the dominant provider in your state. It’s essentially a private planner of health care in your state. That’s of great concern. It’s a move to an organization for which there is no evidence that it will save money or improve care. We have grave concerns about that as a first step to single payer.”

“You make a good point,” Shumlin said. “But let me be clear. Listen. I was not Governor when the Affordable Care Act passed. As a Governor, I had two choices — implement the bill myself with federal dollars, or have the federal government do it for me. I chose to go it my own way. That doesn’t mean that I believe that the Affordable Care Act is my best friend. So, don’t confuse what I have to do under federal law as a Governor and where I’m going in 2017.”

At the breakout session afterward, Himmelstein laid out in detail his concern with state based campaigns for single payer.

While acknowledging the political positives of organizing and raising the single payer banner at the state level, Himmelstein said there were serious obstacles to implementing single payer at the state level — starting with Medicare waivers.

“The President can give Medicaid waivers,” Himmelstein said. “But a Medicare waiver — to stop Medicare from requiring a patient by patient documentation of what is done, or to dump everybody into a state run Medicare managed care firm — that takes an act of Congress. We can’t actually get Medicare into this system without Congressional approval. Similarly, we can’t get federal retirees and federal workers without Congressional action.”

“That means that the best a state plan can be is a very partial single payer plan where there has to be someone making the effort to maintain per patient billing for part of the system. That attenuates a very substantial part of the administrative savings. We think it is something like 30 percent to 50 percent of the administrative savings have to be lost by doing that.”

Himmelstein pointed to other areas that make state single payer problematic.

“If you can get a waiver for Vermont to do better, you can get a waiver for Alabama to do worse,” Himmelstein said. “It’s a Pandora’s box that we need to be very careful about opening for Medicare. We’ve already opened it for Medicaid. And a couple of states have done good things with Medicaid. But let’s remember that Arkansas has used that opportunity to completely privatize the Medicaid program. So, Arkansas is essentially abolishing government’s role in Medicaid.”

“We are concerned that as we press for waivers, we not open the box for states to do worse things,” Himmelstein said.

Himmelstein also warned that “the political power of corporations is highly portable.”

“Vermont offers the best case scenario,” Himmelstein said. “It’s one of the reasons we’ve been so happy to see the work in Vermont. As Governor Shumlin said, they seem the best positioned to resist an avalanche of outside money. And it’s partly because there has been such exemplary activism and grassroots efforts there. But it’s partly because the scale of political activity in the state allows for person to person influence that would be very difficult in a state like New York or a state like California where media plays such a major role.”

Himmelstein said that most large employers are self insured and the federal ERISA law precludes states from regulating employee benefits.

“It’s legally a little bit tricky on whether we can get them to participate in this [Vermont] plan,” Himmelstein said. “If you have a universal tax, you can get employers to pay it. Almost certainly, an individual income tax would stand up to federal court scrutiny. But [in a state single payer plan] you can’t prohibit employers from offering parallel private coverage. That’s almost certain. And parallel private coverage is a real problem.”

Himmelstein said while that one can make “substantial and important progress” at the state level, and politically the state efforts can be extremely important to the movement, “actually implementing single payer and achieving the full benefits of what can be achieved requires Washington’s work.”

“As we think about the relationship between state and national work, these have to be part of the same effort. They are inseparable. The state work can certainly feed our national efforts. It certainly can’t go forward over the long term without the national efforts to support them.”