By Adam Gaffney, M.D., M.P.H.
The Guardian, December 11, 2018
If you can’t undercut a popular proposal as undesirable, make it sound impossible. That, in any event, has been the tack of opponents of single-payer healthcare, also called improved “Medicare-for-all”.
“[W]e got to get away from these falsehoods and start talking about the truth …” opined billionaire Starbucks CEO Howard Schultz on CNBC last June, while contending that single-payer healthcare was economically infeasible. “I think a lot of the analysis has shown it’s unaffordable,” claimed Seema Verma, head of the Centers for Medicare & Medicaid Services, last summer, quoted by Kaiser Health News.
Yet casting Medicare-for-all as an economic impossibility is becoming a sisyphean pursuit: a slew of studies – including one released just the other week – are confirming that, yes, we can afford real universal healthcare in America. But if that’s the case, why haven’t we already achieved it? Well, the real stumbling block is not that single-payer advocates’ arithmetic is poor, it’s that American politics are dominated by the rich.
Still, the numbers matter. On 30 November, a team of economists with the Political Economy Research Institute (Peri) at the University of Amherst published a highly credible, nearly 200-page economic analysis of Senator Bernie Sanders’ single-payer bill. The Peri study received essentially none of the media coverage lathered on the last such analysis – a flawed piece of work published by the conservative Mercatus Center last summer. But here’s the funny thing: though these two analyses came from economists from opposite ends of the political spectrum, they shared a similar finding: single-payer would reduce our nation’s healthcare spending bill by trillions of dollars over a decade (around $2tn and $5tn, respectively).
The numbers are big, but they shouldn’t come as a surprise. Yes, single-payer imposes some new costs: when people don’t have to worry about ruinous medical bills or ravenous debt collectors, they tend to use more healthcare, increasing costs. But such rises in utilization are likely to be modest (even more modest than these analyses predict). There are only so many doctors and hospital beds, which limits theorized surges in utilization. Anyway, there are hundreds of billions in potential savings in moving to single-payer, such as slimming down on the massive administrative bloat of the privatized American healthcare system and bringing down our sky-high drug prices.
Going back decades, studies have found that, at worst, these costs and savings will balance out under a Canadian-style single-payer reform. “In Canada, each provincial plan provides for universal insurance coverage with no deductibles or copayments, controls on provider reimbursement, and administration by a single, public payer,” the United States General Accounting Office noted in an analysis of a single-payer bill way back in 1992. “We found that if these features were applied in the United States, the administrative savings could offset the added costs.”
In a review of the Peri study that I co-authored with Professors David Himmelstein and Steffie Woolhandler at the City University of New York, we commended the robustness of the team’s much-needed and highly thorough analysis, while offering differing opinions on some of the specific assumptions. We also contended that it would be prudent to cautiously assume that overall healthcare spending would remain roughly stable (rather than fall) shortly after implementation.
But here’s the thing: a single-payer system allows cost growth to be directly controlled over time in a way that’s not possible with a privatized system. So even if a Medicare-for-all system only allows us to keep overall healthcare spending where it is today (as a proportion of the US economy), a quick back-of-the-envelope calculation using figures from the National Health Expenditures accounts shows that it would still save some $2tn over a decade.
To be clear, even as we reduce overall health spending by trillions, new taxes will be needed to replace most of the private spending – eg premiums, copays, and deductibles – that suddenly and permanently evaporate. To this end, the Peri analysis proposes a sensible mix of taxes, including payroll taxes paid by businesses, a sales tax on non-essentials, and a wealth tax on the richest among us. It would also treat capital gains like ordinary income. In exchange, we would have a healthcare system that covers everyone in the nation, without copays or deductibles, with comprehensive benefits, with no insurance networks or interruptions in coverage – and a permanent end to the soul-sucking hassle of medical bills.
There is another benefit of this system, albeit one that helps explain why we haven’t achieved it yet. A more progressive system of healthcare financing can, over time, reduce inequalities not only in health, but in wealth, helping to close our nation’s disastrous economic divide. It’s not surprising, then, that billionaires don’t much like it. Nor is it unexpected that the corporate behemoths that have the most to lose are already sharpening their swords, pouring cash into a new anti-single-payer lobbying group that, as the Intercept recently reported, is maneuvering to “influence Democratic party messaging and stymie the momentum toward achieving universal health care coverage”.
So as important as rigorous analyses and funding proposals are, we miss the forest for the trees if we see this mainly as a fight among policy wonks or dueling funding proposals. This is a struggle against the “economic royalists”, as Franklin D Roosevelt once termed them, of our day – and for the interests of ordinary working people. Good numbers do not a political movement make.