The system would be funded in part by the savings obtained from replacing today’s welter of inefficient, profit-oriented, private insurance companies – and the system-wide administrative waste they generate – with a single streamlined, nonprofit public payer. Such savings, estimated in 2017 to be about $500 billion annually, would be redirected to patient care.

Existing tax revenue would fund much of the system. According to a 2016 study in the American Journal of Public Health, tax-funded expenditures already account for about two-thirds of U.S. health spending. That revenue would be retained and supplemented by modest new taxes based on ability to pay, taxes that would typically be fully offset by the elimination of today’s premiums and out-of-pocket expenses for care. The vast majority of U.S. households – one study says 95 percent – would come out financially ahead.

The system would also reap savings from its powerful bargaining clout, e.g. its ability to negotiate with drug and medical supply companies for lower prices.

It would also save money by giving hospitals annual lump-sum (“global”) budgets to run their operations, rather than have them bill for every Band-Aid, and by regulating hospitals’ capital expenditures (new buildings, major equipment) on the basis of community need. All hospitals would be required to transition to nonprofit status, another source of the system’s savings.

Over the past several decades, more than two dozen independent analyses of federal and state single-payer legislation by agencies such as the Congressional Budget Office, the General Accountability Office, the Lewin Group, and Mathematica Policy Research Group have found that the administrative savings and other efficiencies of a single-payer program would provide more than enough resources to provide first-dollar coverage to everyone in the country with no increase in overall U.S. health spending.