Tag Archives: studies

Health Costs And Benefits

Americans have been arguing over health care (actually, health insurance) for my entire life–and as I frequently mention, I’m old. Every time the federal government has extended access to health insurance, conservative politicians have insisted that America cannot afford it.

“Medicare for All” proposals invariably meet with outrage–and disinformation. In addition to insistence that universal health care would bankrupt the country,  opponents used to warn that extending access would ruin what they say is the “best medical care in the world.”

That claim that “we’re number one” has diminished considerably, as more people have recognized that we’re actually number thirty-seven or thirty-eight, and that the only people who receive the “best” medical care are people who have lots of money. But Republicans have continued to insist that America just can’t afford universal coverage.

Which brings me to a very interesting report in The Hill, titled “22 Studies Agree: Medicare for All Saves Money.”

The evidence abounds: A “Medicare for All” single-payer system would guarantee comprehensive coverage to everyone in America and save money.

Christopher Cai and colleagues at three University of California campuses examined 22 studies on the projected cost impact for single-payer health insurance in the United States and reported their findings in a recent paper in PLOS Medicine. Every single study predicted that it would yield net savings over several years. In fact, it’s the only way to rein in health care spending significantly in the U.S.

All of the studies, regardless of ideological orientation, showed that long-term cost savings were likely. Even the Mercatus Center, a right-wing think tank, recently found about $2 trillion in net savings over 10 years from a single-payer Medicare for All system. Most importantly, everyone in America would have high-quality health care coverage.

The studies found that Medicare for All would eliminate three-quarters of the estimated $812 billion the U.S. now spends on health care administration. Administrative costs in the United States are so high because insurance companies–and there are hundreds, if not thousands of them– individually negotiate benefit rules and rates with thousands of hospitals and doctors. They also require different billing procedures , use different forms and have different rules for submitting claims.

The studies estimate that savings from Medicare for All would be about $600 billion per year. And that’s not including savings on prescription drugs, estimated to be another $200 or $300 billion a year if we paid about the same price as other wealthy countries pay for their drugs.

Even more savings are possible in a Medicare for All system because, like every other wealthy country, we would have a uniform electronic health records system. Such a system generates additional savings because system problems would be easier to detect and correct. A uniform claims data system helps reduce health care spending for fraudulent services. In 2018, total U.S. health care costs were $3.6 trillion, representing 17.7 percent of GDP.

The “cherry on top” of these calculations? Savings were calculated assuming the elimination of deductibles and out-of-pocket expenses.

The article also pointed to something that is not widely understood: government already pays approximately two-thirds of all American health care costs. A few years ago, when I participated in a multi-disciplinary study, the calculation was that some seventy percent of all health costs were being paid for by some unit of government– not just via Medicare and Medicaid, but also through the VA, CDC awards of research dollars,  federal, state and local health care programs, coverage for government employees (including thousands of employees of public schools and universities), and ACA tax subsidies for private insurance.

A more expansive and accurate cost/benefit analysis would also include things like the decline in bankruptcies–some 50% of personal bankruptcies are due to medical costs not covered by insurance.–and evidence that crime and other forms of social discord decline sharply when social safety nets improve.

Here’s my question: if Medicare for All improves health care and costs less, what is the real reason so many Republicans oppose it?