January 26, 2021
Have health economists been underestimating supply-side constraints when making predictions regarding cost and utilization for universal health coverage programs, such as Medicare For All? That’s certainly what Dr. Adam Gaffney, a pulmonary specialist from Cambridge Health Alliance and Harvard Medical School, and colleagues posit in aĀ new policy paper published in the January 2021 issue ofĀ Health Affairs.
As Gaffney and co-authors note in their paper, “focusing only on the impact of health care reform on government expenditures is short-sighted.” On the supply side, there’s a natural limit to doctor and nurses’ time as well as the number of hospital beds in a given facility.
Their analysis suggest that while first-dollar universal coverage expansion would increase ambulatory visits by about 7-10% and hospital use by about 0-3%, modest administrative savings could offset the costs of these increases.
On this episode of A Health Podyssey, Alan Weil and Adam Gaffney take listeners through health reform economics 101 before sharing the implications of the paper, ultimately questioning whether health reform is too focused on a demand-side framework.