California State Capitol
Sacramento, CA April 12, 2002
John Sheils, Vice President of The Lewin Group, in his concluding remarks on the micro-simulation of the nine health care reform proposals:
“This next table (Change in Total Health Spending under Coverage Expansion Plans) is kind of interesting. It summarizes the impact of these plans on total health spending in the state. Now this is total health spending for everybody, regardless of who’s writing the check, regardless of who’s paying. This is the total amount spent for health care, including administration. We expect it to be $151.8 billion (for California) in the year 2002, this year.
“Under all of the plans here, there is an increase in costs, reflecting the fact that you’d have more insured people using more health services, and that represents some increase in costs. But, interestingly, under the single payer program, we show that there is a net reduction in spending. We actually spend less, in the aggregate, on health care. The reason for this is that there are very large administrative savings that are realized through using a simple, single program to pay for health care. There are also some bulk purchasing savings which we believe could be quite substantial.
“Now, one of the major claims of the single payer advocates for a long time has been that we could cover more people, for more services, for less money. Our study is showing that, for these very carefully designed plans, that’s true. To the best of our ability to estimate it, that’s true. So I think that’s an important finding.
“I don’t want to sound like I’m favoring one program over another at all, of course, because ‘all of our children are above average.'”