Single Payer Economics: Making Sense of Health Care Finance

1. Single Payer Economics: Making Sense of Health Care Finance Leonard Rodberg, PhD Urban Studies Dept., Queens College/CUNY and NY Metro Chapter, Physicians for a National Health Program

2. High Cost of Health Insurance Premiums: Even the Middle Class Can No Longer Afford It National Average for Employer-provided Insurance: Single Coverage $ 4,704 per year Family Coverage $12,680 per year Median household income = $50,233 Source: Kaiser Family Foundation/HRET Survey of Employee Benefits, 2008; U.S. Census Bureau, 2008

3. Private Insurers’ High Overhead International Journal of Health Services 2005; 35(1): 64-90

4. Billing and Insurance: Nearly 30% of All Health Care Spending

5. The Mandate ModelObama/Ted Kennedy/Jacob Hacker • The problem : Too many uninsured • The solution: Everyone should buy insurance • Employers should contribute or offer insurance • Continued reliance on private insurance, with the option of a public plan • “Keep what you have” • No regulation of insurance company premiums or reimbursement and denial practices

6. The Mandate Model Won’t Work • Won’t lead to 100% coverage • Private health insurance will be a continuing consumers nightmare (copay, deductible, denials) • Doesn’t address widespread underinsurance • Increases cost of the system by billions of dollars • Many payers remain, so the savings from a single funding source can’t be achieved. • There is no way to control costs as long as there are many separate plans. It treats the symptom – the uninsured – while ignoring the disease – private insurance.

7. A FALSE POLICY CHOICE Assertion: “Let’s first cover everybody. Then we can deal with the system’s inefficiencies.” Fact: We will never have enough money to provide everyone with decent coverage until we eliminate the principal sources of waste and inadequate coverage.

8. Conyers/Kucinich/et alExpanded and Improved Medicare for All“single payer national health insurance” HR 676 • Automatic enrollment - everyone receives a card assuring payment for all needed care • Doctors and hospitals remain independent, negotiate fees, budgets with public agency • Public agency processes and pays bills • Financed through progressive taxes

9. How We Pay for Health Care Today Source: Health Affairs, Feb. 2008; data for 2006

10. How Single Payer Could Be Paid For: One Example from a Recent Study of a California Plan

11. Covering Everyone with No Additional Spending Additional costs Covering the uninsured and poorly-insured +6.4% Elimination of cost-sharing and co-pays +5.1% Savings Reduced insurance administrative costs -5.3% Reduced hospital billing costs -1.9% Reduced physician office costs -3.6% Bulk purchasing of drugs & equipment -2.8% Primary care emphasis & reduce fraud -2.2% Total Costs +11.5% Total Savings -15.8% Net Savings - 4.3% Source: Health Care for All Californians Plan, Lewin Group, January 2005

12. Family Spending: Savings for Most Source: Health Care for All Californians Plan, Lewin Group, January 2005

13. Employer Spending: Savings for Those Currently Offering, Modest Cost for the Rest Source: Health Care for All Californians Plan, Lewin Group, January 2005

14. Why Health Care Is On the Agenda: Escalating Cost Average Annual Premiums for Single and Family Coverage, 1999-2008 * Estimate is statistically different from estimate for the previous year shown (p<.05). Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2008.

15. The Growth in Cost Must be Addressed if Any Plan is to Succeed Single payer offers real tools to contain costs – • Budgeting, especially for hospitals • Investment planning • Emphasis on primary care and coordination of care Mandate plans offer only hopes – • Computerization • Chronic disease management • Insurance company competition There is no data or experience to suggest that these will cut costs or limit the rise in cost.

16. Government Accounting Office Congressional Budget Office Congressional Budget Office Lewin Group Lewin Group Solutions for Progress Lewin Group & Solns for Progress Lewin Group Lewin Group Lewin Group Lewin Group Solutions for Progress Mathematica, Inc. Missouri Foundation for Health Lewin Group Kenneth Thorpe, Emory University Lewin Group US June 1991 US December 1991 US April, July, Dec 1993 New Mexico November 1994 Minnesota February 1995 Delaware April 1995 Massachusetts December 1998 Maryland June 2000 US (ANA Proposal) September 2000 Vermont August 2001 California April 2002 & January 2005 Rhode Island November 2002 Maine December 2002 Missouri October 2003 Georgia June 2004 US August 2005 Colorado August 2007 Studies of Single Payer Plans All reach the same conclusion: Everyone would be insured for comprehensive care for no more than we are now spending.

17. No Study (Yet) of HR 676! Blue Ribbon Task Force on Single Payer Health Reform – to oversee that study Blue Ribbon Task Force Rep. John Conyers (D., MI), Honorary Co-Chair Joel Alpert, MD Prof. of Pediatrics, Boston University School of Medicine Dean Baker, PhD Co-Director, Center for Economic and Policy Research Thomas S. Bodenheimer, MD Professor, Department of Family and Community Medicine, UCSF Olveen Carrasquillo, MD Assoc. Prof. of Med &Health Policy, Columbia Univ Medical Center Chunhuei Chi, PhD Assoc Professor, Dept. of Public Health, Oregon State University Rose Ann DeMoro Executive Director, California Nurses Assoc Oliver Fein, MD Prof of Clinical Med and Public Health, Weill Cornell Medical College Harvey Fernbach, MD Hugh Foy, MD Prof and Dir of Surgical Specialites Clinic, U Wash School of Med John Geyman, MD Prof Emeritus, Department of Family Medicine, Univ of Washington Kevin Grumbach, MD Prof and Chair, Department of Family & Comm Medicine, UCSF David Himmelstein, MD Cambridge Hospital/Harvard Medical School, Co-founder, PNHP James G. Kahn, MD Professor of Health Policy, UCSF Michael Lighty Dir of Public Policy, California Nurses Assoc Don McCanne, MD Senior Policy Fellow, PNHP David McLanahan, MD Rudy Mueller, MD David L. Rabin, MD, Co-Chair Rsch Prof of Family Medicine, Georgetown Univ Medical Center Edie Rasell, MD, PhD Minister for Workplace Justice, United Church of Christ Leonard Rodberg, PhD, Executive Director Professor and Chair, Urban Studies Department, Queens College Gordon Schiff, MD Ctr for Patient Safety Rsch&Practice, Brigham&Women’s Hosp Steven S. Sharfstein, MD Pres and CEO, Sheppard Pratt Health System Paul Sorum, MD PhD Prof of Internal Medicine and Pediatrics, Albany Medical College Jaime Torres, MD President, Latinos for Natl Health Insurance Walter Tsou, MD Former Commissioner, Department of Health, Philadelphia Steffie Woolhandler, MD Cambridge Hospital/Harvard Medical School,Co-founder, PNHP Quentin Young, MD, Co-Chair Natl Coordinator, PNHP, Past Pres, Amer Public Health Assoc

18. Will We Get Real Health Care Reform Before the Premium Takes All our Income? Today Source: American Family Physician, November 14, 2005