By Susanne L. King, M.D.
The Berkshire Eagle (Pittsfield, Mass.), Feb. 5, 2016
Sen. Bernie Sanders has opned a dialogue about single-payer health care in the presidential campaign by supporting “Medicare for All.” In response, single-payer critics have written analyses that misrepresent the costs of single-player health insurance, misleading the public.
A widely quoted analysis released last week by professor Kenneth Thorpe at Emory University claimed that single-payer health reform would be too costly. Ironically, Thorpe’s current analysis is at odds with his own previous analyses of the costs of a single-payer program in which he projected large savings. The facts have not changed, and his current analysis rests on a number of incorrect assumptions, distortions and missing data, which Drs. David Himmelstein and Steffie Woolhandler from Harvard Medical School and City University of New York School of Public Health have refuted.
Distortion: Single-payer would not save much in administrative costs. Thorpe based his calculations on Vermont’s program, which was never enacted and would not even have been a true single-payer system.
Fact: Drs. Himmelstein and Woolhandler published a study in the New England Journal of Medicine which found that administrative costs of insurers and providers in Canada, with a single-payer system, was 16.7 percent of total health expenditures, versus 31.0 percent in the United States, a difference of 14.3 percent. But Thorpe estimated administrative savings of only 4.7 percent, an underestimation of $327 billion in savings from single-payer annually.
False assumption: There would be significant increases in the utilization of health care if everyone were covered by single-payer. This would dramatically increase health care costs because previously untreated people would flock to receive care.
Fact: When Canada implemented single-payer health insurance there was no significant change in the number of doctor visits and hospitalizations. “Capacity constraints,” a limited supply of hospital beds and doctors, would limit a surge in utilization in the U.S. as well.
Missing data: Thorpe ignores the enormous tax subsidies from the federal government that currently support private insurance.
Fact: Tax subsidies totaled $326.2 billon last year, and are expected to almost double by 2024. Funding a single-payer program with these federal dollars, rather than subsidizing private insurance companies, would be a boon for us all.
Missing data: Cost savings for prescription drugs and medical devices could be realized under single-payer.
Fact: Other countries with single-payer systems have been able to lower their drug prices by about 50 percent, as has the VA system in the U.S, by negotiating with drug companies.
Thorpe’s analysis underestimates administrative savings, suggests an unlikely increase in health care utilization, doesn’t mention the huge tax subsidies currently filling the coffers of private insurance companies, and ignores the savings on drugs and medical devices realized by other countries with single-payer health care, all leading him to the inaccurate claim that single payer health care would be too costly for the U.S.
The majority of people and doctors support single-payer health care, unlike politicians who are beholden to private insurance companies and drug firms, with their lobbyists. Let’s make sure the facts are clear in the current discussion about the costs of a single-payer health care program.
Susanne L. King, M.D., is a Lenox-based practitioner.