Contact:
Clare Fauke, Communications specialist, Physicians for a National Health Program, clare@pnhp.org, 312-782-6006
Dr. Adam Gaffney, Instructor in Medicine, Harvard Medical School; President, Physicians for a National Health Program; Division of Pulmonary and Critical Care Medicine, Cambridge Health Alliance; agaffney@cha.harvard.edu
The cost of Medicare-for-All reform — as recently projected in an economic analysis from Elizabeth Warren’s campaign — is contested by scholars and politicians. Some predict net savings, while others project that utilization of care would soar under single-payer, leading to runaway costs. However, a new study examining the implementation of universal coverage expansions in wealthy nations finds that projections of surging costs are likely in error, and that Medicare for All is more affordable than previously predicted.
The researchers examined all major coverage expansions in wealthy capitalist nations during the past 81 years. Their analysis encompassed 13 coverage expansions in 11 nations, beginning with New Zealand’s 1938 Social Security Act and extending through the 2010 Affordable Care Act in the U.S. They found that coverage expansions led only to small, or no, rise in system-wide utilization of care. However, in many cases, there were shifts in use — with increased use among those newly covered, balanced by slight decreases among the well-to-do.
The researchers examined changes in annual doctor visits and hospitalizations per capita. In most nations, coverage expansions were associated with either small (<10%) or no rise in service use for the overall population after universal coverage. For instance, in the Canadian province of Quebec, individuals had on average five doctor visits per year both before and after single-payer was implemented in 1971, with increased use among lower-income individuals offset by very small reductions among the well-off. A similar pattern was seen after the implementation of Medicare in the U.S. in 1966, the ACA in 2014, and in several other nations.
“Doctors stay busy,” noted study author Dr. Steffie Woolhandler, distinguished professor of public health at Hunter College and a lecturer at Harvard Medical School. “It makes sense that when coverage expands, doctors adjust their schedules to provide more care to those who are newly covered and in need, and slightly less low-value services to their well-off, healthy, and previously well-insured patients.”
Study author Dr. David Himmelstein, also a distinguished professor of public health at Hunter College and a lecturer at Harvard Medical School, noted that the finite number of hospital beds and nurses precludes a surge in hospitalizations after coverage expansions. “While coverage expansions usually lead to greater hospital use among the newly-covered, they generally produce small offsetting decreases among others. That probably reflects a small decline in elective and completely unnecessary hospital care for wealthy individuals, likely a benefit for both groups.”
“The idea that Medicare-for-All will lead to runaway costs due to an unaffordable surge in health care use is belied by the experience of the 13 coverage expansions implemented over the past century,” summarized lead author Dr. Adam Gaffney, a pulmonary and critical care physician at Harvard Medical School and the Cambridge Health Alliance. “Our findings indicate covering everybody is not only the right thing to do, it’s something we can afford to do.”
“The effect of large-scale health coverage expansions in wealthy nations on society-wide healthcare utilization,” Adam Gaffney, M.D., M.P.H.; Steffie Woolhandler, M.D., M.P.H; David U. Himmelstein, M.D. Journal of General Internal Medicine, published online Nov. 20, 2019. DOI: doi.org/10.1007/s11606-019-05529-y
Physicians for a National Health Program (www.pnhp.org) is a nonprofit research and education organization whose more than 23,000 members support single-payer national health insurance. PNHP had no role in funding or otherwise supporting the study described above.
