PNHP

Vaccine Rationing and the Urgency of Social Justice

Vaccine Rationing and the Urgency of Social Justice

Sponsored by PNHP-Oregon

Oregon Health Forum, February 25, 2021

COVID-19 has exacerbated racial disparities in disease and mortality. Should those racial groups hit hardest by the pandemic be given higher priority in vaccination distribution? Is favorable healthcare treatment of any racial group legal in the U.S.? Please join this important discussion between Harald Schmidt, PhD, Assistant Professor of Medical Ethics & Health Policy at the University of Pennsylvania and Kalpana Krishnamurthy, National Field and Policy Director at Forward Together, Portland. Together they will discuss the compelling issues raised in Dr. Schmidt’s JAMA opinion article, “Is It Lawful and Ethical to Prioritize Racial Minorities for COVID-19 Vaccines?”

Download slideshow HERE.

Kalpana Krishnamurthy is National Field and Policy Director at Forward Together, Portland. In addition to national policy work, she directs the organization’s state-based organizing and civic engagement program. She previously directed the racial justice and gender justice programs at Western States Center. She currently serves on the Advisory Board for the Philanthropic Initiative for Racial Equity.

Harald Schmidt, Ph.D. is Assistant Professor of Medical Ethics & Health Policy; Research Associate, Center for Health Incentives and Behavioral Economics; and Senior Fellow, Leonard Davis Institute at the Perelman School of Medicine, University of Pennsylvania. His research interest is improving opportunity and reducing disadvantage for marginalized populations in healthcare.

https://www.oregonhealthforum.org…

Stanford business professor discovers administrative sludge

The Staggering Costs of Health Insurance “Sludge”

A new study finds that dealing with health insurance administrators costs the U.S. economy billions in wasted work time and lost productivity.

By Edmund L. Andrews
Stanford Graduate School of Business, February 23, 2021

It’s no secret that health care in the United States is tangled in wasteful red tape. A study in 2019 estimated that administrative complexity was the single biggest source of waste in health care — bigger even than fraud or over-pricing — and imposes an annual cost of $265 billion.

The true extent of that waste, according to a new study led by Jeffrey Pfeffer at the Stanford Graduate School of Business, is even more shocking. Pfeffer and his colleagues found that administrative “sludge” in health care insurance costs employers and the economy billions of dollars in squandered work time, employee stress, absenteeism and reduced productivity.

Specifically, the researchers estimate, the economy loses $21.6 billion a year simply from the time employees spend on the phone with health insurance representatives. On top of that, the study estimates that companies lose $26 billion a year from extra absence on the part of employees who have to deal with health benefits administrators, and $95 billion from the reduced productivity that arises because people who spend time on the phone with health insurers are less satisfied with their jobs. All of those dead-weight losses to the economy could be diminished if employers held benefits administrators accountable for reducing administrative hassles in the system.

The Drain on Productivity

If that just sounds like grousing, it’s not. Pfeffer teamed up with researchers at Gallup, the polling company, to assess how much time employees spend on the phone with benefit administrators and how those encounters affect their work.

“Until now, most of the research on health care sludge has focused on the paperwork costs incurred by health care providers such as doctors and hospitals,” Pfeffer says. “Our new twist, which I can’t believe no one looked at before, is how much employee time is wasted and the measurable effect of that time on employee stress, burnout, increased absence, and diminished job satisfaction.”

The team began by polling people on how much time they had spent on the phone in the prior week with health insurance administrators. All told, the annual cost of lost work amounted to $21 billion — frittered away while talking on the phone with health insurance representatives.

The Impact on Worker Morale

The next step was to look at whether those encounters made people more dissatisfied and less engaged in their work.

Sure enough, the people who had talked with a benefits administrator were significantly less satisfied with their jobs and more likely to be absent from work.

Who’s Really to Blame?

Pfeffer says the fault lies less with insurance companies than with the companies that hire them and then fail to hold them accountable.

“CEOs are the ones who should care about this, but they’re only interested in how to reduce direct medical costs,” he says, “not realizing that the indirect costs of turnover, absenteeism, and diminished productivity are many times the direct costs of ill-health.

The upshot, Pfeffer continues, is that companies end up paying huge sums of money for employee health care benefits that don’t provide increased employee morale because of the burdens imposed by insurers.

“Companies say they offer health insurance to attract and retain talent, but they’re offering a benefit which is administered so that it often doesn’t feel like a benefit,” says Pfeffer. “If employers would select better-performing health insurers and get rid of those that are administratively inefficient, they would get more value for the money they are spending.”

https://www.gsb.stanford.edu…

Comment:

By Don McCanne, M.D.

So finally someone has discovered that private insurance companies not only waste a tremendous amount of health care funds on administrative excesses, but they also place a tremendous administrative burden on others – the health care delivery system, the business community and the employees insured by these firms. Professor Pfeffer says that he can’t believe that no one looked at the employee burden before, but, of course, they have.

More astonishing is the fact that Pfeffer says that the fault lies less with the insurance companies and more with the companies that purchase the private insurance plans and then fail to hold the insurers accountable. Accountable? Accountable for what?

The insurance companies are private businesses rather than public service organizations. They strive for business success by erecting barriers to spending money on health care. They spend a large amount of funds on accomplishing this – not only on their own administrative services that are designed to cut back on health care spending, but also by creating administrative burdens for the health care delivery system, and businesses and their employees.

That’s just good business. If they want efficient public service organizations whose job it is to assist patients in getting the care they need, they should advocate for a single payer Medicare for All program and then dismiss the private insurers and their inefficiency at obtaining beneficial health services.

But then isn’t it characteristic of market-oriented business schools like Stanford to place the blame on the consumers? We should be assisting the consumers of health care, not blaming them.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

Private equity investment in nursing homes

Does Private Equity Investment in Healthcare Benefit Patients? Evidence from Nursing Homes; NBER Working Paper 28474

By Atul Gupta, Sabrina T. Howell, Constantine Yannelis & Abhinav Gupta
National Bureau of Economic Research, February 2021

Abstract

The past two decades have seen a rapid increase in Private Equity (PE) investment in healthcare, a sector in which intensive government subsidy and market frictions could lead high-powered for-profit incentives to be misaligned with the social goal of affordable, quality care. This paper studies the effects of PE ownership on patient welfare at nursing homes. With administrative patient-level data, we use a within-facility differences-in-differences design to address non-random targeting of facilities. We use an instrumental variables strategy to control for the selection of patients into nursing homes. Our estimates show that PE ownership increases the short-term mortality of Medicare patients by 10%, implying 20,150 lives lost due to PE ownership over our twelve-year sample period. This is accompanied by declines in other measures of patient well-being, such as lower mobility, while taxpayer spending per patient episode increases by 11%. We observe operational changes that help to explain these effects, including declines in nursing staff and compliance with standards. Finally, we document a systematic shift in operating costs post-acquisition toward non-patient care items such as monitoring fees, interest, and lease payments.

From the Conclusion

This paper studies PE buyouts in healthcare, an important sector where PE activity has increased dramatically, generating policy debate. Nursing homes are a useful setting because they have particularly high levels of for-profit ownership and subsidy and have experienced extensive PE investments. In an instrumental variables design incorporating facility fixed effects, we address both targeting and patient selection challenges to identification. We find that going to a PE-owned facility increases 90-day mortality by about 10% for short-stay Medicare patients, while taxpayer spending over the 90 days increases by 11%. Furthermore, we document declines in nurse availability per patient and in measures of compliance with Medicare’s standards of care. We also find a corresponding increase in operating costs that tend to drive profits for PE funds.

https://www.nber.org…

Comment:

By Don McCanne, M.D.

Private equity investment in health care raises some concerns since there can be a conflict between the business interests of the equity investors and the health care interests of the patients.

In this paper, private equity investment in nursing homes was associated with an increase in mortality for short-stay Medicare patients, an increase in taxpayer spending, a decrease in nurse availability, a decrease in compliance with Medicare’s standards of care, and an increase in operating costs that tend to drive profits for private equity funds. Ouch!

It appears that our health care system places a higher priority on business interests than it does on patients. Instead of advocating for a national program of social insurance, maybe we should be thinking about public ownership of the system since the interests of taxpayers and patients are one and the same. Just a thought.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

California’s new single payer bill

Nurses applaud introduction of CalCare bill to implement a single-payer system in California

By California Nurses Association
National Nurses United, February 19, 2021

Renewing its commitment to the larger fight for health care justice, the California Nurses Association (CNA) is pleased to sponsor Assembly Bill 1400 (Kalra), the California Guaranteed Health Care for All Act (CalCare), which would guarantee comprehensive, high-quality health care to all California residents as a human right. The establishment of the CalCare program is an improved Medicare for All-type health care system.

Despite the gains made under the Affordable Care Act, nearly 3 million Californians have no health insurance, while millions more have insurance that they can’t afford to use because their copays and deductibles are too high. Meanwhile, for-profit insurance companies are reporting record-breaking profits, even while the Covid-19 pandemic continues to ravage California and medical bankruptcies are at an all time high.

Sponsored by CNA and authored by Assemblymember Ash Kalra, AB 1400 will ensure that all Californians, regardless of employment, income, immigration status, race, gender, or any other considerations, can get the health care they need, free at the point of service.

“A single-payer health system represents the belief that health care is truly a human right. Our current system results in unjust outcomes and these inequities are underscored especially now, exacerbating economic downturns for working families who have lost their income and meaningful access to health care,” said Assemblymember Ash Kalra. “We will have a long fight ahead in fixing our broken system, but this bill will set us on a real path towards a single-payer system and affirms the policy that would save lives, decrease suffering, and improve public health in California.”

https://www.nationalnursesunited.org…

Assembly Bill No. 1400: AB-1400 Guaranteed Health Care for All. (2021-2022)

California Legislative Information, February 19, 2021

From the Legislative Counsel’s Digest

This bill, the California Guaranteed Health Care for All Act, would create the California Guaranteed Health Care for All program, or CalCare, to provide comprehensive universal single-payer health care coverage and a health care cost control system for the benefit of all residents of the state. The bill, among other things, would provide that CalCare cover a wide range of medical benefits and other services and would incorporate the health care benefits and standards of other existing federal and state provisions, including the federal Children’s Health Insurance Program, Medi-Cal, ancillary health care or social services covered by regional centers for persons with developmental disabilities, Knox-Keene, and the federal Medicare program. The bill would require the board to seek all necessary waivers, approvals, and agreements to allow various existing federal health care payments to be paid to CalCare, which would then assume responsibility for all benefits and services previously paid for with those funds.

This bill would prohibit a participating provider from billing or entering into a private contract with an individual eligible for CalCare benefits regarding a covered benefit, but would authorize contracting for a health care item or service that is not a covered benefit if specified criteria are met. The bill would authorize health care providers to collectively negotiate fee-for-service rates of payment for health care items and services using a 3rd-party representative, as provided. The bill would require the board to annually determine an institutional provider’s global budget, to be used to cover operating expenses related to covered health care items and services for that fiscal year, and would authorize payments under the global budget.

This bill would state the intent of the Legislature to enact legislation that would develop a revenue plan, taking into consideration anticipated federal revenue available for CalCare. The bill would create the CalCare Trust Fund in the State Treasury, as a continuously appropriated fund, consisting of any federal and state moneys received for the purposes of the act.

This bill would prohibit specified provisions of this act from becoming operative until the Secretary of California Health and Human Services gives written notice to the Secretary of the Senate and the Chief Clerk of the Assembly that the CalCare Trust Fund has the revenues to fund the costs of implementing the act.

Section 1.

(b) (2) It is the intent of the Legislature to work to obtain waivers and other approvals relating to Medi-Cal, the federal Children’s Health Insurance Program, Medicare, PPACA, and any other federal programs pertaining to the provision of health care so that any federal funds and other subsidies that would otherwise be paid to the State of California, Californians, and health care providers would be paid by the federal government to the State of California and deposited in the CalCare Trust Fund.

(3) Under those waivers and approvals, those funds would be used for health care coverage that provides health care benefits equal to or exceeded by those programs as well as other program modifications, including elimination of cost sharing and insurance premiums.

(4) Those programs would be replaced and merged into CalCare, which will operate as a true single-payer program.

Section 2. TITLE 23. The California Guaranteed Health Care for All Act

Chapter 7. Funding

Article 1. Federal Health Programs and Funding

100660. (b) (1) The board shall apply to the United States Secretary of Health and Human Services or other appropriate federal official for all waivers of requirements, and make other arrangements, under Medicare, any federally matched public health program, the Affordable Care Act, and any other federal programs or laws, as appropriate, that are necessary to enable all CalCare members to receive all benefits under CalCare through CalCare, to enable the state to implement this title, and to allow the state to receive and deposit all federal payments under those programs, including funds that may be provided in lieu of premium tax credits, cost-sharing subsidies, and small business tax credits, in the State Treasury to the credit of the CalCare Trust Fund, created pursuant to Section 100665, and to use those funds for CalCare and other provisions under this title.

Article 3. CalCare Financing

100670. (a) It is the intent of the Legislature to enact legislation that would develop a revenue plan, taking into consideration anticipated federal revenue available for CalCare. In developing the revenue plan, it is the intent of the Legislature to consult with appropriate officials and stakeholders.

(b) It is the intent of the Legislature to enact legislation that would require all state revenues from CalCare to be deposited in an account within the CalCare Trust Fund to be established and known as the CalCare Trust Fund Account.

https://leginfo.legislature.ca.gov…

Comment:

By Don McCanne, M.D.

So California is once again attempting to enact and implement a state-level single payer system. As before, they run into the glitch as to how they are going to pay for it.

They are intensifying their efforts to obtain “waivers” for all federal sources of health care funds so that they can be deposited into California’s single payer CalCare fund. One barrier is that California cannot dictate to the federal government – Congress and the administration – the use of those funds, rather the federal government has to set up avenues through which those funds can be transferred. Some mechanisms already exist but there is considerable more work to be done to accomplish this task.

The CalCare program will also need the health care funds that are generated within the state, whether by individuals, businesses, or local governmental agencies. They will also need to generate any funds that might be required to provide additional care for those currently uninsured or underinsured. The amount is unknown especially since it is hoped that there will be considerable savings through elimination of administrative excesses and more efficient purchasing of health care products and services. As in previous California legislative attempts, this effort is addressed by stating in the legislation that it is the “intent” of the Legislature to enact legislation that would develop a revenue plan. In the last attempt, this caused a rather dramatic pulling of the bill with the claim that it was incomplete legislation.

Although a national single payer Medicare for All would be greatly preferred, we have a president that has threatened to veto any such legislation. We can be thankful for California and a few other states that are keeping the concept alive through their state efforts.

But we can no longer hide the issue of how we are going to pay for the program. Besides obtaining what federal funds are available, we are going to have to establish equitable, progressive taxes within the state, and we are going to have to let the people know just what that means. This situation requires transparency. We can no longer hide behind a vague “legislative intent” statement. We can develop a system that works well for all of the people, as long as the super wealthy recognize their obligation to return a modest portion of their rewards to society. But we are simply going to have to let the people know what that system is. Taxes are good when they enable beneficial, equitable societal goals.

In the meantime, let’s celebrate the fact that California has not given up.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

It’s time to uncouple insurance from employment

By Robert Funke, M.D.
Kingsport (Tenn.) Times News, February 21, 2021

We know the U.S. pays too much for health care, but who actually pays for it now and who will pay in the future? Economists say the answer to both is ultimately individuals and households. That simple, accurate answer only becomes complicated when we see the different ways we simultaneously pay for health care today.

About half the current national health expenditure (NHE) flows through various payroll, state and local taxes. We send over a third of NHE through private insurance companies. We pay the remainder directly out of our pockets in deductibles, copays and non-covered expenses. The 35 million currently uninsured pay everything out of pocket — and taxes.

Many Americans send additional payment through their employers. It’s worth recalling this peculiarly American arrangement began accidentally due to a World War II wage freeze. Employers were prohibited from offering higher wages to attract needed workers, so they paid their workers’ insurance premiums instead.

Although this amounted to a hidden tax in employees’ paychecks each month, it became accepted practice and was particularly popular with employers who reaped tax benefits. It was considered bad policy at the time but acceptable as a temporary work-around.

Now it’s just bad policy that doesn’t work well for either and will worsen as automation ends factory jobs, self-driving vehicles end truck-driving jobs, and artificial intelligence disrupts white-collar jobs. Consequently it’s short-sighted, and indeed harmful, to keep tying our health insurance to jobs.

Most politicians, including President Biden, still tout market-based plans despite 70 years of the market’s failure to control costs or provide access to all who need health care. I’m reminded of the saying that insanity is repeating the same action while expecting different results. Never mind that economists have shown health care markets don’t behave as other competitive markets. Just last month after a three-year effort, our elite businesses JP Morgan Chase, Amazon and Berkshire Hathaway gave up and admitted defeat on Haven, their bold quest to deliver better market-based health care.

The business model for profitable health insurance is to “cherry-pick” the healthy population with gym memberships and “lemon-drop” those needing expensive care by keeping desired hospitals and doctors out of network and inadequately covering critical medications. The industry essentially works on a commission, keeping 20% of premiums for their own use and profit. Thus their financial incentive is for the NHE to grow, not shrink. Comparatively, remember Medicare’s overhead is only 4%.

As an individual and household, I want my health care money flowing into the one, single most efficient pool with leverage for lower yet fair prices. That would be one pool for all Americans, everybody in, nobody out — ever. Experts estimate switching to single payer will save $500 billion in wasteful administrative costs alone. Copays, deductibles and out-of-pocket expenses have not lowered health care costs, so eliminate them to save the expense of billing and collecting them.

Cover everyone, then doctors and hospitals will be fairly paid for all their work. Large employers could compensate employees with raises equivalent to what they previously paid in insurance premiums, about $15,000 annually for a family of four per the Kaiser Family Foundation. The 50% of small employers who currently provide insurance will have lower expense per employee and more incentive to create additional jobs at higher wages. Aspiring entrepreneurs can leave unfulfilling jobs and flourish without the burden of buying expensive insurance.

Private health insurance may go the way of the Oldsmobile, but just like when you trade in an old clunker for a new car, you’re buying a better, safer, more dependable ride for the future.

We pay enough today to afford Medicare for everyone. Some journalists point to Congressional Budget Office projections of higher taxes, apparently not realizing the CBO only deals with current federal government revenues. They don’t consider the elimination of premium purchases and out-of-pocket spending, which are designed to offset the tax increases for individuals and households. Some will spend less overall on health care than now.

Medicare-for-All bills exist now in both houses of Congress, and detail summaries are available for review. There are provisions to protect individual job disruption through retraining and a phased-in transition. In the larger economy, lost administrative jobs will be replaced by hands-on clinical jobs to care for those previously uninsured.

Despite what we hear, it‘s not socialized medicine or government-run health care. It’s publicly financed insurance — Medicare, but without the middlemen and supplemental policies. Doctors will still be private, still paid by Medicare but not through hundreds of additional insurance plans. Public spending on the health and safety of Americans is not overreach, it is the appropriate role of government large or small.

Dr. Robert Funke is a retired Kingsport family physician and member of Physicians for a National Health Program.

https://www.timesnews.net…

Are Medicare Advantage plans going to take over the food industry?

Examining the bidirectional relationship between food insecurity and healthcare spending

By Karl T. Johnson, B.A.; Deepak Palakshappa, M.D.; Sanjay Basu, M.D., Ph.D.; Hilary Seligman, M.D., M.A.S.; Seth A. Berkowitz, M.D., M.P.H.
HSR, Health Services Research, February 17, 2021

From the Discussion

In this study of nationally representative data, we found support for both directions of the relationship between food insecurity and healthcare expenditures—food insecurity is associated with greater health care expenditures, and greater health care expenditures are associated with food insecurity. However, the strength of these associations appears to be unequal. Though we found a statistically significant association between health care expenditures and subsequent food insecurity, the difference in odds was small—about 1% greater risk of food insecurity per $1000 difference in health care expenditures. When examining the association between food insecurity and subsequent health care expenditures, the difference in expenditures between food insecure and food secure participants was relatively larger—approximately 25% greater expenditures for those who were food insecure. This suggests that upstream efforts that seek to address food insecurity may have greater impact than downstream efforts that seek to address health care expenditures directly.

Expenditures for prescriptions made up the largest share of the difference in health care spending between those who were food insecure and those who were food secure. Furthermore, with regard to the relationship between health care expenditures (as predictor) and food insecurity status (as outcome), we found evidence that greater health care expenditures may be an indicator of underlying poor health status. In models that adjusted for both indicator health care expenditures and indicators of poor health (eg, disability) the association between health care expenditures (as predictor) and food insecurity status (as outcome) was weakened, while the association between disability and subsequent food insecurity was strong. This suggests that high health care expenditures may be associated with food insecurity risk because they indicate poor health (which can impair the ability to work), rather than because they drain household resources directly. The finding that out‐of‐pocket expenditures is not associated with food insecurity risk also supports this idea.

The results of this study have several implications. First, the confluence of comorbidities, health care expenditures, and food insecurity suggests that attempting to address food insecurity without paying attention to comorbidity could limit the effectiveness of the intervention. Rather than viewing food insecurity as one standalone issue to address, it may be more effective to think of addressing food insecurity as one aspect of a more comprehensive disease management plan. Relatedly, given that the strength of the association appears larger when food insecurity is the predictor and greater health care expenditures is the outcome (compared with when these roles are reversed), disease management plans, which target the upstream determinants of food insecurity and general poor health, may be more efficacious at breaking this cycle than interventions that merely offset the cost of disease management. Thirdly, the category of prescription expenditures stands out in our analyses. One reason for this may be that if food insecurity increases the risk for the development or worsening of chronic conditions, it could lead to increasingly complicated medication regimens, with attendant costs. Finally, the lack of association between out‐of‐pocket expenditures and food insecurity, coupled with a strong association between medical debt and food insecurity, warrants closer attention. Current insurance benefit design often considers out‐of‐pocket expenditures (eg, yearly out‐of‐pocket maximums set at an absolute number) without considering medical debt. More nuanced design that takes into account an individual’s ability to match resources to expenditures (eg, yearly out‐of‐pocket maximums set as a percentage of income or assets) may better protect individuals from the consequences of out‐of‐pocket costs.

The presence of these relationships sets up the potential for a self‐reinforcing “vicious cycle” whereby food insecurity worsens health and worse health increases the risk for food insecurity. Given the different directional associations, however, interventions targeted at addressing food insecurity as a part of chronic disease management may be a more promising way to break this cycle and improve health for disadvantaged individuals.

https://onlinelibrary.wiley.com…

MA Enrollment in Plans with Extra Benefits for Chronically Ill Tripled in 2021

By Robin Duddy-Tenbrunsel, Shruthi Donthi, Joanna Young, Thomas Kornfield
Avalere, February 5, 2021

Over 3 million Medicare Advantage (MA) beneficiaries are enrolled in plans providing additional supplemental benefits to individuals with chronic illnesses, compared to just over 1 million in 2020.

Starting in 2020, the Creating High-Quality Results and Outcomes Necessary to Improve Chronic Care Act of 2018 permits plans to also target non-primarily health-related supplemental benefits to beneficiaries with chronic illnesses (e.g., diabetes, asthma). By allowing SSBCI, policymakers gave MA plans more flexibility to address social and environmental factors that may impact beneficiary health.

In 2021, the second year that plans can offer SSBCI, 787 plans are offering at least 1 SSBCI, which is more than triple the number in 2020, when 239 plans offered these benefits. As shown in Table 1 (see at link below), among the plans offering SSBCI, the most commonly offered benefits are meals (45% of plans, enrolling 1.5 million beneficiaries), food and produce (43% of plans enrolling 1.9 million beneficiaries), and pest control (25% of plans enrolling 1.4 million beneficiaries).

https://avalere.com…

Comment:

By Don McCanne, M.D.

We’ve long known that food insecurity is a major problem that can have a significant impact on a patient’s health. This HSR study shows that food insecurity is associated with higher health care expenditures. That certainly should catch the attention of the private health insurers, and it has.

Avalere reports that private Medicare Advantage plans are now offering “non-primarily health-related supplemental benefits to beneficiaries with chronic illnesses.” The most commonly offered benefits are meals (45% of plans, enrolling 1.5 million beneficiaries), and food and produce (43% of plans enrolling 1.9 million beneficiaries).

We have continued to sit back and watch the private insurance industry take over significant portions of the health care delivery industry. Now are we going to continue to sit back as we watch them take over the food industry as well?

I’d say that enacting and implementing a single payer system of improved Medicare for All has become an emergency, lest the out-of-control steamroller wipes out more of us.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

On public policy and health in the Trump era: A scathing indictment

Interview with Dr. Steffie Woolhandler

February 19, 2021

One year ago this month, America lost its first life to the coronavirus. Since then, nearly 500,000 Americans have succumbed to the pandemic, and many more have lost their family, their classrooms, and their livelihoods.

No person has been more widely reviled for dooming our response than former President Donald Trump. But a new report published in the British medical journal The Lancet finds that as damaging as were Trump’s actions and his antagonism toward science, they represented merely the extension of a long tradition of harmful policies stretching back decades, which collectively left the United States acutely vulnerable to the pandemic: and resulting in the deaths of 461,000 Americans, in 2018 alone.

This report, published by the Lancet Commission on Public Policy and Health in the Trump Era, offers an unsparing assessment of the many and overlapping failures of the US health care system, as well as of the social mores and policy choices that fueled and have perpetuated those failures over four decades.

Here to discuss their findings, and what they mean for a nation still struggling to move forward, is Dr. Steffie Woolhandler, co-chair of the Lancet Commission and distinguished professor in the CUNY School of Public Health at Hunter College. Dr. Woolhandler is a practicing primary care physician as well as a co-founder and board member of Physicians for a National Health Program, the only national physician organization dedicated to implementing a single-payer health program in the United States — now encompassing more than 20,000 members. She has authored over 150 journal articles, chapters, and books on health policy and continues to guide the national debate as a staunch champion of Medicare for All.

For more about the Lancet Commission, check out:

  • its landing page, with links to the full text as well as graphics and associated editorials
  • the report itself, at 49 pages an excellent weekend read

Follow Dr. Woolhandler on her Twitter page.

And learn more about Civic Rx at civic-rx.org.

https://civic-rx.org…

Why Medicare-for-All is good for our towns

By Jane Katz Field, M.D.
Brattleboro (Vt.) Reformer, February 18, 2021

Town Meeting is coming up, and Putney residents will have a chance to join the groundswell of support for a single-payer national health plan. Article #12 on the Town Meeting warning calls on senators Leahy and Sanders and Representative Welch to work vigorously to enact emergency legislation to ensure everyone gets the care they need during the pandemic, as well as federal legislation that provides universal, comprehensive health care coverage, with no deductibles, copays, or other out-of-pocket costs.

Even before the COVID-19 pandemic, 30 million people in the U.S. had no health insurance, and about 50 million were underinsured. The pandemic has caused millions more to lose coverage because of losing their jobs. Indeed the pandemic has given us perspective on an array of injustices in our health care delivery system — including the lack of an adequate public health infrastructure, the racial disparities in access to care, the rationing of care based on ability to pay, and hospitals’ concentration on lucrative cardiac and orthopedic services rather than mental health and primary care.

The U.S. spends twice as much per capita on health care as other high-income countries that provide universal coverage, and yet our health outcomes are worse. Life expectancy in the U.S. is lower than that in 30 other countries. Our infant mortality is three times higher than it is in economically comparable countries.

This past November, the Vermont Medical Society, representing 2,400 Vermont physicians and physician assistants, became the second state in the nation to formally endorse universal access to high quality health care through a publicly financed, single-payer national health program. This endorsement builds on the growing movement among physicians and other health professionals towards single-payer reform, also known as Medicare-for-All.

In December, the Congressional Budget Office reported that Medicare-for-All would extend coverage to everyone, yet would save $650 billion each year, by 2030. Putney voters can add their town to the more than 50 municipalities which have passed resolutions endorsing Medicare-for-All, including Philadelphia, Detroit, Knoxville and New Orleans. In New Hampshire, voters in Hanover, Grantham, Peterborough and Holderness have passed similar resolutions.

The issue of health care reform has an enormous impact on the town of Putney and its residents. Under a single-payer health care system, all our residents would be covered for medical needs in a comprehensive way, with no out-of-pocket expenses. The health of our community would benefit tremendously under this system, and disparities would be lessened. Moreover, our town would realize tremendous savings; in 2021, the town of Putney will spend $197,000 on health care costs for its 10 employees, but under Medicare-for-All, the town’s cost would drop to about $45,000 — an annual savings of around $150,000. In addition, the 2020 health care costs for Putney Central School employees were $475,000, much of which is paid for by property taxes; under Medicare-for-All, the only expense for health care coverage would be an 8 percent employer-side tax on employees’ salaries, amounting to about $140,000, yielding significantly lower property taxes for residents of Putney.

Getting everyone in the U.S. covered for their health care needs is vital to achieving health, economic and racial justice. The passage of Medicare in 1965 not only provided health insurance for the elderly, it also eliminated segregation in hospitals and helped decrease racial disparities. Only the top executives of the highly profitable insurance and pharmaceutical corporations benefit from the current health care system. But health is not a marketable product; just like education and fire protection, it is a “public good.” Our democracy and our economy are strengthened if everyone is healthy and educated. Medicare-for-All is the only way to control costs, achieve equity and fairness, and improve outcomes. Passing Resolution #12 on the Putney warning is part of the nationwide political momentum to guarantee health care for all, regardless of race, income, or employment status.

Dr. Jane Katz Field is a retired local pediatrician. She is vice president of the Vermont Chapter of the Physicians for a National Health Program.

https://www.reformer.com…

‘Choosing Wisely’ has been disappointing

Trends in Low-Value Health Service Use and Spending in the US Medicare Fee-for-Service Program, 2014-2018

By John N. Mafi, M.D., M.P.H.; Rachel O. Reid, M.D., M.S.; Lesley H. Baseman, B.A.; Scot Hickey, M.S.; Mark Totten, M.S.; Denis Agniel, Ph.D.; A. Mark Fendrick, M.D.; Catherine Sarkisian, M.D., M.S.P.H.; Cheryl L. Damberg, Ph.D.
JAMA Network Open, February 16, 2021

Key Points

Question: Have low-value care use and spending decreased over time with increasing focus on reducing waste in the US health care system?

Findings: In this cross-sectional study of more than 21 million individuals with fee-for-service Medicare, the percentage receiving any of 32 measured low-value services decreased marginally from 2014 to 2018. Claim line–level spending on low-value care per 1000 individuals did not decrease substantially over this period.

Meaning: This study found that among individuals with fee-for-service Medicare receiving any of 32 measured services, low-value care use and spending decreased marginally from 2014 to 2018, despite a national education campaign to address low-value care and increased attention on reducing health care waste.

https://jamanetwork.com…

Comment:

By Don McCanne, M.D.

It is disappointing, but not surprising, that programs such as “Choosing Wisely” have not had much impact on reducing low-value care, but that is the nature of medicine. Only a relatively small percentage of care produces major improvement in outcomes, and much of the rest is of marginal benefit. Some is of no value and may be harmful, but other factors play a role such as in this study showing opioid use for back pain and antibiotic use for upper respiratory viruses actually increased, sometimes to the detriment of the patient.

What do we do about it? Care that is of no value or even detrimental simply should not be covered. Care that is of low-value but not of no value is much more difficult since it may have some value for some individuals. Perhaps low-value care should be paid at rates so low that the benefit of serving the patient would be the primary reward, whereas care that has such a low benefit that it is not worth the time or effort might preferentially be avoided.

The authors suggest ACOs or capitation as possible solutions. Those issues are more complex and other considerations may outweigh those approaches. Under a fee-for-service system low prices or no price seems more appropriate.

Of course, research to identify best practices will provide the continuing guidance that we need for higher value care. If you think back through the decades, medicine has changed and mostly for the better.

What about single payer Medicare for All? It would change the financing from catering to the medical-industrial complex to a system that caters primarily to the patient instead. Just introducing that attitude would give us a great restart in improving our management of low value care.

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Support single-payer Medicare for All

By Jay Brock, M.D.
The (Fredericksburg, Va.) Free Lance-Star, Letters, February 17, 2021

Most Americans are fed up with skyrocketing health care costs. We pay way more than any other advanced nation—and get worse results.

Our bureaucratically bloated health insurance system manages to not only waste $600 billion health care dollars a year just in administrative costs, but also manages to leave one in four Americans with inadequate coverage or none at all. In our system, if you lose your job, you lose your insurance—so it could happen to anyone.

Each year, an estimated 68,000 Americans die because they cannot afford timely medical care. No wonder so many of us feel our health care system is just one big ripoff.

So it was refreshing to hear President Biden pledge in his inauguration speech that he would “make health care secure for all.”

The surest way to do that would be to transition to a single-payer Medicare for All, a health care system that is publicly funded, but in which care is still privately delivered. Hopefully Mr. Biden has finally abandoned the fiction that “building on the Affordable Care Act” would help. It won’t. All it would do is perpetuate a dysfunctional system that for many decades has failed to be affordable or to cover everyone.

I hope Mr. Tim Kaine and Mr. Mark Warner, our two U.S. Senators, join in the effort to ensure that finally “health care is secure for all,” and support real health insurance reform by supporting single-payer Medicare for All.

https://fredericksburg.com…

CBO report on Medicare for All

How CBO Analyzes the Costs of Proposals for Single-Payer Health Care Systems That Are Based on Medicare’s Fee-for-Service Program; Working Paper 2020-08

By CBO’s Single-Payer Health Care Systems Team
Congressional Budget Office, December 2020

Abstract

In this paper, CBO describes the methods it has developed to analyze the federal budgetary costs of proposals for single-payer health care systems that are based on the Medicare fee-for-service program. Five illustrative options show how differences in payment rates, cost sharing, and coverage of long-term services and supports under a single-payer system would affect the federal budget in 2030 and other outcomes. CBO’s projections of national health expenditures under current law are a key basis for the estimates.

CBO projects that federal subsidies for health care in 2030 would increase by amounts ranging from $1.5 trillion to $3.0 trillion under the illustrative single-payer options—compared with federal subsidies in 2030 projected under current law—raising the share of spending on health care financed by the federal government. National health expenditures in 2030 would change by amounts ranging from a decrease of $0.7 trillion to an increase of $0.3 trillion. Lower payment rates for providers and reductions in payers’ administrative spending are the largest factors contributing to the decrease. Increased use of care is the largest factor contributing to the increase.

Health insurance coverage would be nearly universal and out-of-pocket spending on health care would be lower—resulting in increased demand for health care—under the design specifications that CBO analyzed. The supply of health care would increase because of fewer restrictions on patients’ use of health care and on billing, less money and time spent by providers on administrative activities, and providers’ responses to increased demand. The amount of care used would rise, and in that sense, overall access to care would be greater. The increase in demand would exceed the increase in supply, resulting in greater unmet demand than the amount under current law, CBO projects. Those effects on overall access to care and unmet demand would occur simultaneously because people would use more care and would have used even more if it were supplied. The increase in unmet demand would correspond to increased congestion in the health care system—including delays and forgone care—particularly under scenarios with lower cost sharing and lower payment rates.

https://www.cbo.gov…

Congressional Budget Office Scores Medicare-For-All: Universal Coverage For Less Spending

By Adam Gaffney, David Himmelstein, Steffie Woolhandler
Health Affairs Blog, February 16, 2021

For the first time in a quarter century, the Congressional Budget Office (CBO) has undertaken an economic analysis of single-payer health care reform, also known as Medicare for All. The more than 200-page working paper, released last month, includes a rich explanation of methodology together with cost projections for 2030 and will no doubt serve as an important reference for years to come.

The report makes many sound assumptions but also some questionable ones that are overly pessimistic. Yet, overall, its bottom-line estimates should reassure those concerned about the economic feasibility of single payer: The CBO projects that such reform would achieve universal coverage, bolster provider revenues for clinical services, and eliminate almost all copayments and deductibles—even as overall health care spending fell.

We discuss below (see article at link) the CBO’s estimates of single payer’s overall effects on national health spending, the implications of the estimates for providers, and the concerns the analysts raise about worsened “provider congestion” under a single-payer health care system. Throughout, we point out instances where the CBO’s assumptions differ from previous, widely publicized analyses, or from provisions included in the Medicare for All legislation currently in Congress.

The Economics Of Single-Payer Financing: CBO’s Bottom Line

Overall, the CBO report provides one of the most detailed explorations to date of the economics of single-payer financing. As we have noted, it makes many sound assumptions, particularly about payer- and provider-side administrative savings. At the same time, it adopts some unfavorable assumptions about the structure of single-payer reform (including some that conflict with key provisions of the Medicare for All bills in Congress), projects excessive windfalls for some providers, and asserts clinically nescient portrayals of “unmet demand.” Nonetheless, the bottom line of the CBO analysis—that universal coverage can be affordably achieved even as benefits are expanded and cost sharing all but eliminated—should reinvigorate debate over such reform.

https://www.healthaffairs.org…

Comment:

By Don McCanne, M.D.

The CBO report discusses the potential impact of various models of a single payer system not only on the federal budget, but also on national health expenditures. In considering these theoretical changes, it is fully expected that assumptions may be made that are not shared by all in the policy community. In their Health Affairs blog, single payer experts Adam Gaffney, David Himmelstein and Steffie Woolhandler explain the deviations from more widely accepted single payer analyses and what impact these revised assumptions would have.

Since we are more interested in an analysis of a preferred model of single payer Medicare for All, the 200 plus page CBO report should be read only in conjunction with the brief Health Affairs article. You will find that single payer is potentially even better than the favorable CBO analysis.

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Congressional Budget Office Scores Medicare-For-All: Universal Coverage For Less Spending

By Adam Gaffney, M.D., M.P.H.; David Himmelstein, M.D.; and Steffie Woolhandler, M.D., M.P.H.
Health Affairs Blog, February 16, 2021

For the first time in a quarter century, the Congressional Budget Office (CBO) has undertaken an economic analysis of single-payer health care reform, also known as Medicare for All. The more than 200-page working paper, released last month, includes a rich explanation of methodology together with cost projections for 2030 and will no doubt serve as an important reference for years to come.

The report makes many sound assumptions but also some questionable ones that are overly pessimistic. Yet, overall, its bottom-line estimates should reassure those concerned about the economic feasibility of single payer: The CBO projects that such reform would achieve universal coverage, bolster provider revenues for clinical services, and eliminate almost all copayments and deductibles—even as overall health care spending fell.

The CBO models costs under five different variants of single payer. The first four envision universal coverage of all services other than long-term care, while the fifth incorporates a large expansion of long-term services and supports (LTSS) for people with disabilities of all ages. The scenarios vary by patient cost sharing and provider payment level. Low cost-sharing has no copays or deductibles for medical services and minimal cost sharing for prescription drugs; under high cost-sharing, patients with incomes above 150 percent of poverty would bear about 7.5 percent of costs out of pocket. Low payment rates to providers would set rates slightly higher than Medicare’s; high rates would be equivalent to the current average of the rates paid by private insurers and government programs. The five variants (or scenarios) are summarized in exhibit 1.

Exhibit 1: Congressional Budget Office’s five single-payer scenarios

Source: Congressional Budget Office’s (CBO’s) Single-Payer Health Care Systems Team. How CBO analyzes the costs of proposals for single-payer health care systems that are based on Medicare’s fee-for-service program. Washington (DC): CBO; 2020 Dec.

We discuss below the CBO’s estimates of single payer’s overall effects on national health spending, the implications of the estimates for providers, and the concerns the analysts raise about worsened “provider congestion” under a single-payer health care system. Throughout, we point out instances where the CBO’s assumptions differ from previous, widely publicized analyses, or from provisions included in the Medicare for All legislation currently in Congress.

CBO’s Estimates Of Single Payer’s Effects On National Health Expenditures

The CBO projects that variants 1–4 of single-payer reform would reduce national health expenditures (NHE) despite substantial increases in the use of care triggered by expanded and upgraded coverage. If a vast new program covering LTSS for all US residents were included (scenario 5), the CBO estimates that NHE would rise by 4.4 percent above currently projected spending levels. Exhibit 2 summarizes the CBO’s spending estimates for the three low cost-sharing scenarios, which are similar to the Medicare for All bills in Congress.

Exhibit 2: Congressional Budget Office estimates of effect of single payer on health spending in 2030: low cost-sharing scenarios

Source: Authors’ analysis of the Congressional Budget Office’s (CBO’s) Single-Payer Health Care Systems Team. How CBO analyzes the costs of proposals for single-payer health care systems that are based on Medicare’s fee-for-service program. Washington (DC): CBO; 2020 Dec. Note: “Net change in provider payments” reflects combined effect of rate setting and increased use.

How can the use of care rise even as spending falls? Mostly, according to the CBO, through greater administrative simplicity. As the CBO notes, traditional Medicare’s administrative overhead accounts for approximately 2 percent of its total revenue, compared to the 12 percent overhead of private insurers. Under single payer, the CBO projects, administrative spending would fall accordingly; overall overhead for the Medicare for All system is estimated by the CBO at below 2 percent. As shown in exhibit 2, this translates into around $400 billion annually (more than $1,000 per capita) in savings under all of the single-payer variants.

Of note, these evidence-based projections clash with the analyses by the Urban Institute and the RAND Corporation, which perplexingly assumed much higher administrative overhead under a single-payer system than under the current traditional Medicare program or under universal systems abroad.

Implications For Provider Overhead And Revenue

The CBO appropriately projects substantial administrative savings for providers, again unlike many previous analyses. US hospitals and physicians waste money and time contending with multiple payers, each with its own complex and varying coverage rules and payment procedures, formularies, and so forth. The CBO projects that the share of revenues that hospitals spend on administration would fall from 19 percent at present to 12 percent under single payer; that physicians’ administrative overhead would fall from 15 percent to 9 percent; and that the administrative expenses of other medical providers (for example, dentists, home health agencies, and hospices) would fall from 9 percent to 6 percent. In addition, it estimates that physicians and nurses would spend less time on administrative activities, freeing up 4.8 percent of physicians’ work hours and 18.4 percent of nurses’ work time. These assumptions build on a large evidence base showing high administrative overhead among US health care providers relative to other nations.

The CBO assumes that single payer would allow providers to keep these savings on administration and billing, and use the resources freed up to provide more care. Hence, providers’ administrative savings do not appear as savings in exhibit 2. In effect, the CBO interprets these efficiencies as reductions in providers’ costs that would enable them to deliver a greater quantity of services for a given amount of revenue.

Consequently, the “net change in provider payments” shown in exhibit 2 doesn’t fully account for the extra resources made available to hospitals, doctors, and other providers under Medicare for All. In contrast, exhibits 3 and 4 present our estimates of single payer’s financial impacts on physicians and hospitals, incorporating CBO projections of providers’ savings on administrative spending and physicians’ and nurses’ time.

As exhibit 3 demonstrates, payments to clinicians would rise in all five scenarios according to CBO estimates. We estimate this translates into an additional $39,816–$157,412 in revenue per practicing physician. At the same time, physicians’ practice overhead would shrink under single payer, increasing practices’ take-home income. Such a windfall, in our view, may be excessive, at least for some providers. (Disclosure: The authors are all physicians).

Exhibit 3: Modeling Congressional Budget Office’s low-cost sharing scenario: ramifications for physicians

Source: Authors’ analysis of the Congressional Budget Office’s (CBO’s) Single-Payer Health Care Systems Team. How CBO analyzes the costs of proposals for single-payer health care systems that are based on Medicare’s fee-for-service program. Washington (DC): CBO; 2020 Dec. Note: *Based on Association of American Medical Costs estimate of 840,000 practicing physicians in 2030 and the assumption that physician payments account for 77.78 percent of payments in the “Physician and other Clinical Service” category, as they did in 2018 according to the National Health Expenditure Accounts.

For hospitals, the CBO estimates that gross revenue would fall by $187 billion under the “low pay” scenario but rise by $144 billion under the high-payment scenario. Again, these figures do not give the full picture of the impact on hospitals’ bottom lines, given the CBO’s projections that single-payer reform would shrink hospitals’ spending on administration and would also free up substantial amounts of nursing time that is currently devoted to payment-related tasks. The CBO’s estimates suggest that hospitals would save $143 billion to $166 billion on administration and an additional $59 billion on freed-up nursing time, resources that could be redirected to clinical care (exhibit 4). Overall, building on the CBO’s projections, we estimate that hospitals’ clinical funding would change little (rising by $15 billion) under the low-payment scenario or increase substantially, by $369 billion, under the higher-payment one.

Exhibit 4: Modeling Congressional Budget Office’s low cost-sharing scenario: ramifications for hospitals’ revenues and clinical operating budgets

Source: Authors’ analysis of the Congressional Budget Office’s (CBO’s) Single-Payer Health Care Systems Team. How CBO analyzes the costs of proposals for single-payer health care systems that are based on Medicare’s fee-for-service program. Washington (DC): CBO: 2020 Dec. Notes: **Based on the CBO estimate that hospitals’ spending on administration (excluding registered nurse (RN)and licensed practical nurse (LPN) time spent on administration) would be reduced from 19 percent to 12 percent of hospital revenues. ***Based on (1) Bureau of Labor Statistics estimate of number of RNs and LPNs employed in hospitals and average RN and LPN wages in 2019; (2) the assumption that benefit costs equal 20 percent of wages; (3) the assumption that nursing costs would rise at the same rate as overall hospital costs; and (4) CBO’s estimate that RNs and LPNs devote 23 percent of time to administration and that single payer would reduce that time by 80 percent.

The large increase in hospital funding that the CBO projects under the high-payment scenario would, in our view, give an appropriate boost to many struggling rural and safety-net hospitals but would be excessive for hospitals that are currently realizing large annual profits.

Additionally, the fee-for-service hospital financing modeled by the CBO differs from what is envisioned in the Medicare for All bill in the House of Representatives. The House bill proposes paying hospitals, nursing homes, and other institutional providers using “global budgets,” that is, lump sums to cover all of their operating activities. This is the model used by Canada and the US Veterans Health Administration. Global budgeting could allow even greater reductions in administrative spending by eliminating the need for per-patient billing altogether. It would also allow payments to match current operating budgets and facilitate the gradual redistribution of funding among hospitals, directing more resources to communities most in need.

The global budgeting approach, however, would require separate financing of capital expenditures (as in Canada and some European nations), which again is an approach explicitly included in Medicare for All bills in Congress but not in the CBO report. Such regulated capital financing, in turn, could help regulate cost growth in the longer term by avoiding investments in duplicative but profitable high-tech facilities that encourage the delivery of low- or no-value care.

Hence, the CBO’s decision to model a system that used fee-for-service payments for hospitals and other institutional providers rather than global budgets with separate capital financing leads it to underestimate single-payer savings in the short term and to ignore potential longer-term savings and improvements in the distribution of hospital infrastructure. That caveat aside, an important takeaway from the CBO’s analysis is that, overall, providers would see stable or even increased funding for patient care under single payer, even while overall health spending fell.

Provider Congestion?

While the CBO report foresees greatly improved financial access to care under single payer, it raises the specter of “provider congestion,” that is, greater difficulty making appointments or rising waiting times under single payer. Because such reform would newly cover the uninsured and improve coverage for most other people, the CBO projects large increases in the demand for care, and hence use. However, it projects that not all of the demand could be met because of supply constraints, for example, the finite number of doctors, nurses, and hospital beds. Consequently, the report predicts increased “provider congestion” that would cause some foregone care.

This prediction, however, is out of touch with clinical reality, an issue we recently explored in Health Affairs. The CBO’s approach to supply constraints is only half right. There is little question that, as the CBO assumes, a finite supply of health care providers constrain utilization increases after coverage expansions: As we have demonstrated, in nation after nation, universal coverage expansions have led to modest, or even no, societywide increases in use. Increased use by the newly covered has usually been partially or fully offset by small reductions in use among the well-covered or well-off.

Yet, these small reductions appear to be mostly due to the reduced provision of low-value care. Two econometric studies found that offsets after coverage expansion reflect reductions in the amount of wasteful care provided to the already insured. Similarly, studies by the Dartmouth Group indicate that the volume of elective and low-value care increases when the supply of doctors and hospital beds rise—a phenomenon called supplier-induced demand. In other words, faced with an increase in demand for care, providers prioritize their time and services, delivering more high-value care while reducing the provision of low- or no-value services.

Characterizing such offsets as “unmet demand” or “congestion” is hence misleading. It mirrors previous forecasts of “patient pileups” when Medicare was first implemented—forecasts that proved incorrect. In the US today, nearly one-third of all health care delivered is unnecessary or wasteful. Overprovision is common. If coverage expansion leads to some attenuation in supplier-induced demand, all the better.

A Notable Omission

Finally, while the CBO projects reductions in health spending in four out of five single-payer scenarios, as noted, it projects substantial increases in federal spending that would replace all private insurance premiums and nearly all out-of-pocket health care costs. Yet, there are also substantial savings for state and local governments with single-payer reform. The CBO’s brief mention of the savings likely to accrue to these governments (and their taxpayers) omits probable savings from no longer having to bear the costs of public employees’ health insurance (projected to total $318 billion in 2030), as well as about $162 billion in savings on other health programs. These, together with savings on Medicaid (which the CBO does remark on), would bring state and local governments’ total savings from single payer to about $800 billion in 2030 alone, reductions that provide important context for the CBO’s estimates of increased federal government expenditures.

The Economics Of Single-Payer Financing: CBO’s Bottom Line

Overall, the CBO report provides one of the most detailed explorations to date of the economics of single-payer financing. As we have noted, it makes many sound assumptions, particularly about payer- and provider-side administrative savings. At the same time, it adopts some unfavorable assumptions about the structure of single-payer reform (including some that conflict with key provisions of the Medicare for All bills in Congress), projects excessive windfalls for some providers, and asserts clinically nescient portrayals of “unmet demand.” Nonetheless, the bottom line of the CBO analysis—that universal coverage can be affordably achieved even as benefits are expanded and cost sharing all but eliminated—should reinvigorate debate over such reform.

Drs. Gaffney, Himmelstein, and Woolhandler have served as leaders of Physicians for a National Health Program, a nonprofit organization that supports single-payer health care reform.

https://www.healthaffairs.org…