By Natalie Shure
Pacific Standard, August 2, 2018

Upon finding out what residency programs they’d been matched with this spring, some 310 fourth-year medical students have taken the #MatchDayPledge, a social media campaign that invites the next crop of first-year residents to snap selfies alongside a signed commitment to fight for “improved Medicare for All.” The initiative was sponsored by Students for a National Health Program, or SNaHP—a single-payer advocacy organization with 1,400 members and chapters in over 60 medical schools—whose annual conference in New Orleans this March culminated in a demonstration on the steps of city hall, where they demanded an equitable health-care system financed by a single, public insurance pool.

Future physicians across the U.S. signed the #MatchDayPledge today, a commitment to advocate for universal health care through a #MedicareForAll system. Thanks to these @umnmedschool matchers, the future of health care looks bright! pic.twitter.com/Ozmu1yDBVx

— Augie Lindmark (@AugieLindmark) March 16, 2018

Such actions may not command outsized attention relative to the overall Medicare-for-All campaign, which grew considerably after Bernie Sanders’ 2016 primary run and counts among its supporters groups like National Nurses United, the AFL-CIO, the Democratic Socialists of America, and several national Democratic figures, including Congressman Keith Ellison and Senator Elizabeth Warren. But the heightened participation of medical students within the movement signals an apparent shift in the way that some future physicians interpret their public duties as they step into their new roles. As the Affordable Care Act teeters after a stormy few years of legal onslaught, volatile exchange markets, skyrocketing premiums, shrinking coverage options, and just-missed repeal efforts, young doctors stand to be a key bloc influencing the direction of American health-care reform, which voters cite as a top concern for 2018 mid-terms.

In recent years, left-of-center political activism among medical students has grabbed headlines across the country, including die-ins staged by the racial health justice group White Coats for Black Lives, and student-led ACA sign-up drives and gun-control demonstrations. If SNaHP’s recent growth (the group’s numbers are up 50 percent since 2016) is any indication, today’s students are poised to find themselves on the front lines of a protracted political battle over the future of a profit-driven health-care system that many of them intend to dismantle and fix from within.

It hasn’t always been this way: Medical school curricula can be notoriously divorced from the broader social and political context that shapes the lives of students’ future patients. Instructors often maintain an expressly apolitical posture toward political issues, and practicing physicians are encouraged to do the same; as Dr. Thomas S. Huddle put it in the journal Academic Medicine in 2011, “Advocacy on behalf of societal goals, even those goals as unexceptionable as the betterment of human health, is inevitably political. … Official efforts on behalf of advocacy will undermine university aspirations to objectivity and neutrality.” As I reported this story, a few dozen current and former medical students told me they’d received only minimal exposure in classrooms to material about health-care financing in general, let alone about single-payer specifically.

Augie Lindmark, a third-year at the University of Minnesota and a SNaHP board member, tells me that, as for most students, his introduction to these ideas was extracurricular. It wasn’t until attending a talk by Dr. Steffie Woolhandler, the co-founder of PNHP (Physicians for a National Health Program, of which SNaHP is the student arm), that he came to appreciate fully the dire state of health-care financing in the United States.

“To this day, I remember this one chart,” Lindmark recalls of a lecture slide. “The growth of [health-care system] administration, 3000 percent; growth of doctors, 100 percent.” For Lindmark, Woolhandler’s critique of administrative costs painted a picture of a health-care system that was at best incoherent and wasteful, and at worst unbearably cruel, preventing millions of patients from finding necessary care while funneling billions toward a byzantine administrative regime that denies claims based on technicalities, processes documentation for eligibility, and decodes complicated billing systems that differ from patient to patient. The political content, Landmark says, “was a complete 180 from the curriculum I’d gotten in school.”

Illness, Lindmark came to realize, results from the dynamics of capitalism as much as from germs or lifestyle. He was maddened by the lack of political content in his coursework, and at SNaHP, he found like-minded students convinced that they are witnessing real momentum toward the biggest health-care policy shift in American history. “These are people who are very excited, very disenchanted with the system as it is, and want to work under something else,” Lindmark says. “I think students are at the front lines of leading that push.”

This confrontational posture places these left-leaning students at odds with many of their historical predecessors, who have often prioritized professional and financial interests over reforming health-care financing. During the administration of President Harry Truman, the American Medical Association famously beat back a once-popular proposal for national health insurance by launching what was then the biggest lobbying campaign in American history. The AMA smeared the public plan as “socialized medicine,” and the organization’s successful campaign against Truman helped entrench the private, employer-based system that we’re still stuck with today. Just over a decade later, the AMA allied with industry representatives to try to defeat Medicare and Medicaid—only to pivot, enthusiastically, once it became clear just how conciliatory legislators intended to be in carving out lucrative roles for the private sector. While the AMA (and physicians more broadly) have been more supportive of reforms in the decades since, their endorsements have largely come with caveats to protect their autonomy and, above all, their salaries. This year, SNaHP led an effort within the AMA’s student wing to encourage the group to endorse Medicare for All.

It isn’t terribly hard to figure out why many U.S. physicians would resist transformative health financing reform, even if Medicare did end up being more of a cash cow than their propaganda in the 1960s had warned. For many decades, doctors were among the parties who derived the greatest advantages from commodified health care. The structural shortcomings of a piecemeal, for-profit system leave insurers unable to negotiate prices effectively, resulting in staggering medical cost inflation that has tended to benefit physicians. By covering all Americans in one unified insurance pool, single-payer systems—like those envisioned in bills sponsored by Sanders and Ellison—would leverage federal bargaining power to drive down reimbursements paid to providers. In peer countries that employ similar health-care cost controls, doctors earn some 40 percent less than their American counterparts—and, as Elizabeth Rosenthal notes in her book An American Sickness: How Healthcare Became Big Business and How You Can Take It Back, while most Americans have struggled to make do amid lackluster job prospects since 2009, doctors’ pay has risen steadily. And, given that the average U.S. medical student graduates with $170,000 in debt, there are strong incentives to protect the status quo even before becoming a part of it.

But there is evidence that this self-interest among doctors is changing too. Polls show that 56 percent of American doctors now support a single-payer health system, up from 42 percent in 2008. That shift may partly reflect the recent erosion of the traditional advantages that doctors long held within the system. Rampant industry consolidation has left more than 50 percent of doctors working for larger corporate entities, rather than owning their own practice, and physicians can expect to spend over twice the amount of time on the complicated administrative work our system demands than they’re able to spend with patients. And, of course, doctors see firsthand the harm that inadequate insurance coverage has done to their patients: Tens of thousands of Americans die each year because they don’t have insurance, even after the reforms of Obamacare.

“I’m banging my head against the wall every day just trying to get my patients the care they need in this broken system,” explains Dr. Richard Bruno, a family physician who co-founded SNaHP as a med student in 2011. The failures of that system can have grave effects on doctors themselves, among whom suicide rates are on the rise. Their anguish, many argue, is ascribable to the very system harming so many of their patients: “Doctors are just trying to survive day to day … they’re victims of the system too,” Bruno says.

Bruno is heartened by SNaHP’s growth: “I’ve never seen a more active group in all the orgs I work with…While they’re learning how to stop disease, they’re spreading their passion for health justice; it’s beautiful, really,” he says. Students do have a historic track record in helping to advance progressive movements: They can have the advantage of being able to shape institutions as they move through them, establishing new political norms from the get-go that stretch the boundaries of currently acceptable discourse within the profession. And given the AMA’s politically decisive role in knocking down a single-payer plan during Truman’s presidency, and the group’s critical roles in the health-care system overall, doctor buy-in will be essential to achieve Medicare for All. While the organization endorsed the ACA in 2009, it still maintains an official stance against single-payer—a decades-long position that Lindmark says SNaHP is pushing them to reject this summer.

Now that the message is taking hold among more and more students, Bruno says the next step is gaining electoral power. He’s running for the Maryland State House on a Medicare-for-All platform, and making his case directly to the people who he hopes will be his future constituents. “We’re knocking on doors every day,” he says. “They tell me their stories about scraping together $400 a month just to pay premiums before they get any care at all. They see the need for something better.”

https://psmag.com…

By David U. Himmelstein, M.D., and Steffie Woolhandler, M.D., M.P.H.
Physicians for a National Health Program, August 2, 2018

The Mercatus Center’s estimate of the cost of implementing Sen. Bernie Sanders’ Medicare for All Act (M4A) projects outlandish increases in the utilization of medical care, ignores vast savings under single-payer reform, and fails to even mention the extensive and well-documented evidence on single-payer systems in other nations – which all spend far less per person on health care than we do. But despite adopting a raft of faulty assumptions that inflate the estimated cost of implementing single payer, the Mercatus Center’s report concludes that universal first dollar coverage under Sen. Sanders’ bill would actually decrease the nation’s total health expenditures, saving the average American about $6,000 over ten years.

We outline below some of the most glaring errors in the Mercatus Center analysis of Medicare for All, which was led by Charles Blahous.

1. Administrative savings, Part 1: Blahous assumes that insurance overhead would be reduced to 6 percent of total health spending from the current level of 13 percent in private insurance. Although overhead in Canada’s single payer system is only 1.8%, Blahous justifies his 6 percent estimate by citing Medicare’s current overhead, which includes the extraordinarily high overhead costs of private Medicare HMOs run by UnitedHealthcare and other insurance firms. However, Sen. Sanders’ proposal would exclude these for-profit insurers, and instead build on the traditional Medicare program, whose overhead is less than 3 percent. Moreover, by simplifying hospital payments by funding them through global budgets (similar to the way fire departments are paid), rather than the current patient-by-patient payments, a well-designed single-payer program could fully reduce overhead to Canada’s level of about 1.8 percent. Cutting insurance overhead to less than 2 percent (rather than the 6 percent that Blahous projects) would save approximately $2.9 trillion more than Blahous estimates over a 10 year period.

2. Administrative savings, Part 2: Blahous seems unaware of the extensive literature documenting the huge administrative burden – and resulting costs – borne by U.S. doctors and hospitals, and the savings that would be realized under a streamlined single-payer system. Every serious analyst of single-payer reform has acknowledged these savings, including the Congressional Budget Office, the Government Accountability Office, the Lewin Group (a consulting firm owned by UnitedHealth Group), and Prof. Kenneth Thorpe.

These provider savings on paperwork would, in fact, be much larger than the savings on insurance overhead. At present, U.S. hospitals spend one-quarter of their total budgets on billing and administration, more than twice as much as hospitals spend in single payer systems like Canada’s or Scotland’s. Similarly, U.S. physicians, who must bill hundreds of different insurance plans with varying payment and coverage rules, spend two to three times as much as our Canadian colleagues on billing.

Overall, these administrative savings for doctors and hospitals would amount to about $3.4 trillion over 10 years. Additional savings of almost $2.0 trillion from streamlined billing and administration would accrue to nursing homes, home care agencies, ambulance companies, drug stores, and other health care providers.

In total, the Blahous analysis underestimates administrative savings by about $8.3 trillion over 10 years.

3. Drug costs: Blahous projects that the only drug savings achievable through a single-payer plan would come from switching patients from brand name drugs to generics. He assumes that the prices of drugs – both generics and brand name drugs – could not be lowered through the price negotiations called for in Sen. Sander’s bill. Blahous claims that the savings achievable through negotiations cannot be estimated, ignoring the price reductions of about 40-50% that have been achieved by the VA and by many other nations that use the methods called for in the Sanders legislation.

Reducing drug prices to the levels currently paid by European nations would save at least $1.7 trillion more than Blahous posits over 10 years.

4. Utilization of care: Blahous projects a massive increase in acute care utilization, but does not provide detailed breakdowns of how big an increase he foresees for specific services like doctor visits or hospital care. However, it is clear that the medical care system does not have the capacity to provide the huge surge in care that he posits.

For instance Blahous’ figures for the increase in acute care suggest that Sanders’ plan would result in more than 100 million additional doctor visits and several million more hospitalizations each year. But there just aren’t enough doctors and hospital beds to deliver that much care. Doctors are already working 53 hours per week, and experience from past reforms tells us that they won’t increase their hours, nor will they see many more patients per hour.

Instead of a huge surge in utilization, more realistic projections would assume that doctors and hospitals would reduce the amount of unnecessary care they’re now delivering in order to deliver needed care to those who are currently not getting what they need. That’s what happened in Canada. Doctors and hospitals can adjust care to meet increasing demand, as happens every year during flu season.

Moreover, no surge materialized when Medicare was implemented and millions of previously uninsured seniors got coverage. Between 1964 (before Medicare) and 1966 (the year when Medicare was fully functioning) there was absolutely no increase in the total number of doctor visit in the U.S.; Americans averaged 4.3 visits per person in 1964 and 4.3 visits per person in 1966. Instead, the number of visits by poor seniors went up, while the number of visits by healthy and wealthy patients went down slightly. The same thing happened in hospitals. There were no waiting lists, just a reduction in the utilization of unneeded elective care by wealthier patients, and the delivery of more care to sick people who needed it.

Bizarrely, despite projecting a $2.213 trillion increase in total payments to providers over 10 years, Blahous claims that the program would lead to massive financial losses for doctors and hospitals (top of page 19).

5. Long Term Care: The original version of Blahous’ report estimated that the Sanders bill would increase expenditures for long term care by $1.849 trillion over 10 years. He was apparently unaware that the Sanders bill would not immediately implement major changes in the long term care financing system. When informed of this error he deleted this section of the report, and recalculated his figures.

In summary, Blahous grossly underestimates the administrative savings under single payer; projects increases in the number of doctor visits and hospitalizations that far exceed the capacity of doctors and hospitals to provide this added care; and posits that our country would continue to pay much more for drugs and medical equipment than people in every other nation with national health insurance. His thus overestimates national health expenditures by about $10 trillion over 10 years.

Blahous also neglects to mention that massive savings would accrue to businesses, households, and state and local governments that would no longer be saddled with health insurance premiums or out-of-pocket costs. These savings would more than compensate for the increased federal government expenditures. The Sanders bill would, in reality, shift spending from private to public sources, and from state and local governments to the federal government. Over 10 years, our nation would surely pay less overall under Sen. Sanders bill than under current arrangements.

Moreover, despite overestimating new costs and underestimating savings Blahous admits that Sanders’ program would cover all of the uninsured, and upgrade coverage for the vast majority of Americans who currently have private insurance or Medicare, while decreasing total health expenditures by $2 trillion over ten years.

Blahous’ biased, anti-single payer estimate inadvertently bolsters the evidence that a single payer reform would greatly increase the efficiency and fairness of the U.S. health care system. 

Drs. Himmelstein and Woolhandler are distinguished professors of health policy at the City University of New York at Hunter College and lecturers in medicine at Harvard Medical School. The opinions expressed do not necessarily reflect those institutions’.

By Shefali Luthra
Tonic, August 1 2018

When the American Medical Association—one of the nation’s most powerful healthcare groups—met in Chicago this June, its medical student caucus seized an opportunity for change.

Though they had tried for years to advance a resolution calling on the organization to drop its decades-long opposition to single-payer healthcare, this was the first time it got a full hearing. The debate grew heated—older physicians warned their pay would decrease, calling younger advocates naive to single-payer’s consequences. But this time, by the meeting’s end, the AMA’s older members had agreed to at least study the possibility of changing its stance.

“We believe healthcare is a human right, maybe more so than past generations,” says Brad Zehr, a 29-year-old pathology resident at Ohio State University, who was part of the debate. “There’s a generational shift happening, where we see universal healthcare as a requirement.”

The ins and outs of the AMA’s policy making may sound like inside baseball. But this year’s youth uprising at the nexus of the medical establishment speaks to a cultural shift in the medical profession, and one with big political implications.

Amid Republican attacks on the Affordable Care Act, an increasing number of Democrats—ranging from candidates to established Congress members—are putting forth proposals that would vastly increase the government’s role in running the health system. These include single-payer, Medicare-for-all, or an option for anyone to buy in to the Medicare program. At least 70 House Democrats have signed on to the new “Medicare-for-all” caucus.

Organized medicine, and previous generations of doctors, had for the most part staunchly opposed to any such plan. The AMA has thwarted public health insurance proposals since the 1930s and long been considered one of the policy’s most powerful opponents.

But the battle lines are shifting as younger doctors flip their views, a change that will likely assume greater significance as the next generation of physicians takes on leadership roles. The AMA did not make anyone available for comment.

Many younger physicians are “accepting of single-payer,” says Christian Pean, 30, a third-year orthopedic surgery resident at New York University.

In prior generations, “intelligent, motivated, quantitative” students pursued medicine, both for the income and because of the workplace independence—running practices with minimal government interference, says Steven Schroeder, 79, a longtime medical professor at the University of California-San Francisco.

In his 50 years of teaching, students’ attitudes have changed: “The ‘Oh, keep government out of my work’ feeling is not as strong as it was with maybe older cohorts,” Schroeder says. “Students come in saying, ‘We want to make a difference through social justice. That’s why we’re here.’”

Though “single-payer” healthcare was long dismissed as a left-wing pipe dream, polling suggests a slim majority of Americans now support the idea—though it is not clear people know what the term means.

A full single-payer system means everyone gets coverage from the same insurance plan, usually sponsored by the government. Medicare-for-all, a phrase that gained currency with the presidential campaign of Senator Bernie Sanders of Vermont, means everyone gets Medicare, but, depending on the proposal, it may or may not allow private insurers to offer Medicare as well. (Sanders’ plan, which eliminates deductibles and expands benefits, would get rid of private insurers.)

Meanwhile, lots of countries achieve universal healthcare—everyone is covered somehow—but the method can vary. For example, France requires all citizens to purchase coverage, which is sold through nonprofits. In Germany, most people get insurance from a government-run “public option,” while others purchase private plans. In England, healthcare is provided through the tax-funded National Health System.

American skeptics often use the phrase “socialized medicine” pejoratively to describe all of these models.

“Few really understand what you mean when you say single-payer,” says Frank Opelka, the medical director of quality and health policy for the American College of Surgeons, which opposes such a policy. “What they mean is, ‘I don’t think the current system is working.’”

But the willingness to explore previously unthinkable ideas is evident in young doctors’ ranks.

Recent surveys through LinkedIn, recruiting firm Merritt Hawkins and trade publication NEJM Catalyst indicate growing support. In the March NEJM survey, 61 percent of 607 respondents said single-payer would make it easier to deliver cost-effective, quality healthcare.

Delving further, that survey data shows support is stronger among younger physicians, says Namita Mohta, a hospitalist at Brigham and Women’s Hospital and clinical editor at NEJM Catalyst.

But it’s unclear whether these findings reflect young doctors’ feelings about the policy or whether they are tapping in to broader frustrations with the American health system.

Much like the general public, doctors often use terms like single-payer, Medicare-for-all, and universal healthcare interchangeably.

“Our younger generation is less afraid to come out and say we want universal healthcare,” says Anna Yap, 26, an emergency medicine resident at UCLA, who served as a medical student delegate to the AMA until this past June. “But how? It’s different in what forms we see.”

Younger doctors also pointed to growing concern about how best to keep patients healthy. They cited research that broadly suggests having health insurance tracks with better health outcomes.

“Medical students, I would say, are very interested in public health and improving social determinants of health—one of them being access to health insurance,” says Jerome Jeevarajan, 26, a neurology resident at the University of Texas-Houston, referring to non-medical factors that improve health, such as food or housing.

Some of the shift in opinion has to do with the changing realities of medical practice. Doctors now are more likely to end up working for large health systems or hospitals, rather than starting individual practices. Combined with the increasing complexity of billing private insurance, many said, that means contracting with the government may feel like less of an intrusion.

The debate is, at this point, still theoretical. Republicans—who control all branches of the federal government—sharply oppose single-payer. Meanwhile, single-state efforts in California, Colorado, and New York have fallen flat.

Also, doctors represent only one part of the sprawling healthcare industrial complex. Other healthcare interests—including private insurance, the drug industry, and hospital trade groups—have been slower to warm to catch phrases like single-payer or universal healthcare, all of which would likely mean a drop in income.

But increasingly physicians seem to be switching sides in the debate, and young physicians want to be part of the discussion.

“There’s tremendous potential…to be at the table if single-payer becomes a significant part of the political discourse, and create a system that is more equitable,” Pean says.

https://tonic.vice.com…

By Jeff Stein
The Washington Post, July 31, 2018

Congressional Republicans seized on a new study Monday estimating that a universal health-care plan by Sen. Bernie Sanders (I-Vt.) would cost the federal government $33 trillion by 2031, arguing that it proves Democrats have moved too far left.

Sanders, looking at the same study, says it shows his “Medicare for All” proposal would save Americans $2 trillion.

What’s going on here?

Republicans such as House Speaker Paul D. Ryan (R-Wis.) are correct that enacting Sanders’s single-payer plan would add trillions to government books, by placing all Americans on one government health insurer, according to both the study’s author and Sanders himself.

But Sanders is right that the study concludes that his plan would reduce overall spending on health care in the United States. Most U.S. spending on health care is done through the private sector. Sanders’s plan would transition virtually all of that spending to the public sector, dramatically increasing government expenditures on health care while also reducing national health-care spending overall, according to the report.

Sanders’s plan would also give health insurance to about 30 million Americans who lack it, while eliminating deductibles and premiums charged through private insurance.

“A Medicare-for-All health-care system would save the average family significant sums of money,” Sanders said in an email to The Washington Post. “Yes, an individual may pay more in taxes, but that family of four that is spending $28,000 a year for health care today will no longer pay premiums, co-pays or deductibles to private insurance companies.”

From 2019 to 2028, the federal government would spend an average of 2.8 trillion more per year on health care if Sanders’s plan were fully in place, according to the study, published by the Mercatus Center, a libertarian-leaning think tank. The study — written by Charles Blahous, a former official in President George W. Bush’s administration — notes that this price tag would not be covered by doubling what the government currently takes in through individual and corporate taxes.

Sanders’s plan calls for transitioning everyone in the United States onto the government health plan over the course of four years. In the first year, the federal government would drop the Medicare eligibility age from 65 to 55 — a proposal also backed by many centrist Senate Democrats — as well as enrolling everyone currently on Medicare and everyone younger than 18. It would then slowly add the rest of the population over the next three years, while offering insurance that charges no premiums or deductibles.

These changes would lead the U.S. government to control virtually all health spending in the United States — Sanders’s plan would also cover dental care and vision care — in what may be the biggest increase in federal expenditures in history, according to Blahous.

“The primary effect here is the expansion of the federal government,” Blahous said. His report questions whether it would be “desirable or practicable” for the federal government to so dramatically increase its spending on health care, given that the increase would dwarf many of the government’s other spending priorities.

But to single-payer advocates, there is no obvious difference to the average American between sending their money to a private insurer through premiums and sending it to the government through higher taxes.

And, they say, putting all Americans on one insurer would create a large-enough pool to force private health-care providers to charge less, while eliminating private insurers’ spending on marketing and administrative overhead that do not improve health outcomes.

On its current trajectory, the United States is projected to spend $7.65 trillion annually on health care by 2031, according to the Mercatus study. That number would drop to $7.35 trillion if Sanders’s plan were implemented, the study found. Over time, that adds up to a net savings of about $2.1 trillion.

“It’s a surprisingly positive view of Medicare for All from a very conservative research institute,” Larry Levitt, a health-care expert at the Kaiser Family Foundation, said of the Mercatus report. “According to the analysis, you could provide universal coverage with no patient cost-sharing and actually spend less on health care than we would under the status quo.”

Asked about the projected drop in national health spending, Blahous said the rise in government health-care spending was the significant finding of his report, not the change in overall national health spending. He also said that long-term pricing projections are inherently volatile and that he made generous assumptions about Sanders’s cost savings, also noting that in some other scenarios he analyzed, net health spending would go up.

“I’ve made all the favorable assumptions with respect to the author’s intent,” Blahous said in an interview. “The striking number people have to grapple with is whether the federal government could take on something of this magnitude.”

But Adam Gaffney, an expert at the Harvard Medical School who supports single payer, said Blahous is underestimating by billions of dollars the savings Sanders’s plan would create, by reducing spending on prescription drugs and administrative overhead.

Whether the U.S. political system could stomach the scale of these changes is another question altogether. Single-payer systems in many European countries demonstrate that they can reduce overall national health spending, but that does not mean that a Democratic administration could implement one without incurring an immense political backlash, said Harold Pollack, a health-care expert at the University of Chicago.

“I don’t look at this report and say it is a partisan hack job: The basic idea the Sanders plan would require a substantial increase in federal budget outlays is correct,” Pollack said. “But over the long run, the Sanders people are very correct that you could implement a system like this that would be more disciplined, more economical and more fair than the current U.S. health system.”

https://www.washingtonpost.com…

By Ryan Grim and Zaid Jilani
The Intercept, July 30, 2018

A new study from the Mercatus Center at George Mason University is making headlines for projecting that Independent Vermont Sen. Bernie Sanders’s “Medicare for All” bill is estimated to cost $32.6 trillion — a number that’s entirely in line with 2016 projections, and is literally old news. But what the Associated Press headline fails to announce is a much more sanguine update: The report, by Senior Research Strategist Charles Blahous, found that under Sanders’s plan, overall health costs would go down, and wages would go up.

The study, which came out of the Koch-funded research center, was initially provided to the AP with a cost estimate that exceeded previous ones by an incredible $3 trillion — a massive error that was found and corrected by Sanders’s staff when approached by AP for comment.

But despite that correction, the report actually yields a wealth of good news for advocates of Sanders’s plan — a remarkable conclusion, given that Blahous is a former Bush administration economist working at a prominent conservative think tank.

Blahous’s paper, titled “The Costs of a National Single-Payer Healthcare System,” estimates total national health expenditures. Even though his cost-saving estimates are more conservative than others, he acknowledges that Sanders’s “Medicare for All” plan would yield a $482 billion reduction in health care spending, and over $1.5 trillion in administrative savings, for a total of $2 trillion less in overall health care expenditures between 2022 and 2031, compared to current spending.

In order to arrive at this number, Blahous looked at how “Medicare for All” could lower administrative costs and provide savings in areas like drug spending. He concluded that by empowering the secretary of Health and Human Services to negotiate for lower drug prices, Sanders’s plan would add “$846 billion in additional savings over the 2022-2031” period. These savings, and others, are offset by certain other costs, like those which come from higher “utilization,” or the increased amount health care services used once everyone is insured.

Blahous’s report also acknowledges some substantial benefits to eliminating employer-sponsored insurance. He writes that these changes “should increase worker wage net of employer-provided health benefits,” while also “relieving individuals, families, and employers of the substantial health expenditures they would experience under current law.” The report even admits that the Sanders bill would serve as a boon to states, freeing them from most Medicaid obligations.

But despite the explicit benefits acknowledged by the Blahous study, health policy experts and single-payer advocates David U. Himmelstein and Steffie Woolhandler, who reviewed the Mercatus study, argue that Blahous actually significantly undercounts savings that could result from “Medicare for All.”

“The Mercatus Center’s estimate of the cost of implementing Sen. Bernie Sanders’ Medicare for All Act (M4A) projects outlandish increases in the utilization of medical care, ignores vast savings under single-payer reform, and fails to even mention the extensive and well-documented evidence on single-payer systems in other nations – which all spend far less per person on health care than we do,” Himmelstein and Woolhandler explain. 

In a written analysis shared with The Intercept, Himmelstein and Woolhandler write that Blahous’s report undercounts administrative savings by more than $8.3 trillion over 10 years. Taking those savings into account would lower Blahous’s estimate from $32.6 trillion to $24.3 trillion.

Additionally, the policy experts believe that Blahous underestimates savings from drug prices; for example, ignoring the success the U.S. Veterans Administration, the Canadian government, and certain European governments have had in negotiating for lower drug prices. If the United States paid European prices, they conclude, another $1.7 trillion would be trimmed from Blahous’s total cost estimate, bringing it down to $22.6 trillion over 10 years.

Himmelstein and Woolhandler also claim that Blahous grossly overestimates how much extra care would be utilized as a result of expanding insurance coverage. Using Blahous’s projections, they note that he is essentially arguing that once every American is covered, there will be 100 million additional doctor visits and several million more hospitalizations each year. But Himmelstein and Woolhandler say that’s wildly off the mark. From their written analysis:

[T]here just aren’t enough doctors and hospital beds to deliver that much care. Doctors are already working 53 hours per week, and experience from past reforms tells us that they won’t increase their hours, nor will they see many more patients per hour.

Instead of a huge surge in utilization, more realistic projections would assume that doctors and hospitals would reduce the amount of unnecessary care to those who are currently not getting what they need. That’s what happened in Canada. Doctors and hospitals can adjust care to meet increasing demand, as happens every year during flu season.

Moreover, no surge materialized when Medicare was implemented and millions of previously uninsured seniors got coverage. Between 1964 (before Medicare) and 1966 (the year when Medicare was fully functioning) there was absolutely no increase in the total number of doctor visit in the U.S.; Americans averaged 4.3 visits per person in 1964 and 4.3 visits per person in 1966. Instead, the number of visits by poor seniors did go up, but the number of visits by healthy and wealthy patients went down slightly. The same thing happened in hospitals. There were no waiting lists, just a reduction in the utilization of unneeded elective care by wealthier patients, and the delivery of more care to sick people who needed it.

Blahous explained the $3 trillion error in an email to The Intercept.

As you might imagine, any draft study like this is shown to many people along the way (at least 20 in this case) and goes through multiple rounds of re-estimation, editing and redrafting.  Estimates in prior drafts were revised in both directions (higher and lower) in subsequent drafts on the way to final publication. One of the more recent drafts before final publication was shown to the Sanders office,” he said. “That draft contained an estimate of long-term care costs reproduced from another study, which was cited because this study had no long-term care model to draw upon.  That previously-published study predated the introduction of the Sanders bill, the language of which the Sanders office asserted was not intended to increase federal financing of long-term care service utilization.  In reality there probably would be some increase in long-term care utilization under M4A because its broader coverage expansion would enable more people to make use of long-term care benefits already authorized under current law through Medicaid.  But rather than attempt to estimate that, I concluded the right thing to do was to reflect the language’s intended effect as represented by the primary sponsor, as was done throughout the study with the other provisions of M4A.  I was very pleased to receive and incorporate their input.

Even using Blahous’s numbers — which may be off by roughly $15 trillion according to Himmelstein and Woolhandler’s estimates  — the conclusion is plain: “Medicare for All” would cover more people, increase the quality of coverage, and cost less than is currently being spent on health care. “Blahous admits that covering the uninsured and upgrading coverage for most others could be achieved at virtually no additional cost through a single payer reform,” Himmelstein and Woolhandler conclude.”Altogether, the increase in federal health spending is dramatic and certainly significant, but the change in projected national health expenditures really isn’t,” he told The Intercept. Especially given the source of the report, that’s news.

https://theintercept.com…

By Matt Bruenig
Jacobin, July 30, 2018

The US could insure 30 million more Americans and virtually eliminate out-of-pocket health care expenses while saving $300 billion in the process, according to a new report about Medicare for All released by the libertarian Mercatus Center.

In the report, Charles Blahous attempts to roughly score Bernie Sanders’s most recent Medicare-for-All bill and reaches the somewhat surprising (for Mercatus) conclusion that, if the bill were enacted, the new costs it creates would be more than offset by the new savings it generates through administrative efficiencies and reductions in unit prices.

The report’s methods are pretty straightforward. Blahous starts with current projections about how much the country will spend on health care between 2022 and 2031. From there, he adds the costs associated with higher utilization of medical services and then subtracts the savings from lower administrative costs, lower reimbursements for medical services, and lower drug prices. After this bit of arithmetic, Blahous finds that health expenditures would be lower for every year during the first decade of implementation. The net change across the whole ten-year period is a savings of $303 billion.

When talking about Medicare for All, it is important to distinguish between two concepts: national health expenditures and federal health expenditures. National health expenditures refer to all health spending from any source whether made by private employers, state Medicaid programs, or the federal government. It is national health expenditures that, according to the report, will decline by $303 billion.

Federal health expenditures refer to health spending from the federal government in particular. Since the federal government takes on nearly all health spending under Medicare for All, federal health expenditures will necessarily go up a lot, $32.6 trillion over the ten-year period according to Blahous. But this is more of an accounting thing than anything else: rather than paying premiums, deductibles, and co-pays for health care, people will instead pay a tax that is, on average, a bit less than they currently pay into the health care system and, for those on lower incomes, a lot less.

At first glance, it is strange that the Mercatus center, which is libertarian in its orientation and heavily funded by the libertarian Koch family, would publish a report this positive about Medicare for All. The claim that “even the Koch organizations say it will save money while covering everyone” provides a useful bit of rhetoric for proponents of the policy.

But the real game here for Mercatus is to bury the money-saving finding in the report’s tables while headlining the incomprehensibly large $32.6 trillion number in order to trick dim reporters into splashing that number everywhere and freaking out. This is a strategy that already appears to be working, as the Associated Press headline reads: “Study: ‘Medicare for all’ projected to cost $32.6 trillion.”

Messaging strategy aside, there is room to quibble with Blahous’s positive findings. He assumes administrative costs will only drop from 13 percent to 6 percent for those currently privately insured. But, according to the Kaiser Family Foundation, Medicare’s administrative costs have consistently been below 2 percent. He assumes utilization of health services will increase by 11 percent, but aggregate health service utilization is ultimately dependent on the capacity to provide services, meaning utilization could hit a hard limit below the level he projects.

But even if you take the report’s headline figures at face value, the picture it paints is that of an enormous bargain. We get to insure every single person in the country, virtually eliminate cost-sharing, and save everyone from the hell of constantly changing health insurance all while saving money. You would have to be a fool to pass that offer up.

Matt Bruenig is the founder of People’s Policy Project.

https://jacobinmag.com…