Single Payer System Cost?
April 2002: California
State Health Care Options Project
A study of nine options for covering California’s seven million uninsured by the conservative D.C.- based consulting firm of Lewin, Inc found that a single payer system in California would reduce health spending while covering everyone and protecting the doctor-patient relationship.
Three of the nine options analyzed by Lewin for their fiscal implications included single payer financing.
1.) A proposal by James Kahn, UCSF, Kevin Grumbach, UCSF, Krista Farley, MD, Don McCanne, MD, PNHP, and Thomas Bodenheimer, UCSF, would cover nearly all health care services including prescription drugs, vision and dental for every Californian through a government-financed system while saving $7.6 billion annually from the estimated $151.8 billion now spent on health care.
2.) A second proposal by Ellen Shaffer, UCSF- national health service- Would reform both financing of and the delivery system so that every Californian has a “medical home”, that is, a primary care physician with an ongoing relationship with that patient. Like the Kahn et al proposal, it saves about $7.5 billion through various efficiencies.
3.) The third by Judy Spelman, RN, and Health care for All, covers care for every Californian in a manner similar to the Kahn et al proposal but eliminates all out-of-pocket costs. Its cost savings are estimated at $3.7 billion.
All three proposals stabilize the health care system, reduce paperwork, and protect the doctor-patient relationship by eliminating the role of for-profit HMOs and insurers. The Kahn et al proposal envisions that the not-profit Kaiser Permanente, the state’s largest integrated health system, would continue.
Source: (Contact Sandra (916)654-3454 to get a copy of the full report)
(See also February 2005 report)
December 2002: Maine
Single Payer an economically feasible option for Maine
The June 2001 Maine legislature created a nineteen member Health Security Board to develop a single payer system for Maine. In July, the Board contracted with the consulting firm Mathematica Policy Research, Inc, (MPA) firm to study the feasibility of single payer in the state. The firm found that single payer would cost about the same amount as the current system, while covering all 150,000 uninsured residents. Depending on the benefits provided by the system, single payer would cost the same as current state health spending, or increase health spending by 5 percent. (Note, the consultants were very conservative when estimating administrative savings, which could more than offset the 5 percent increase).
“Estimates from the model indicate that, under current policy, health care spending in Maine will continue on a path of steady increase—rising by 37 percent between 2001-04 and by 31 percent between 2004-08. The model projects that a single-payer health system would produce a net increase in total health care spending under most benefit designs that MPA estimated, but this increase in spending would decline over time as the system realizes savings through global budgeting, reductions in administrative costs, and enhanced access to primary and preventive care.”
“By reducing administrative spending and increasing overall demand for health care, a single payer system would generate some change in employment in Maine… However a single payer plan would improve health sector productivity by redistributing jobs from administrative to clinical positions.”
“In summary, a single payer system appears to be economically feasible for Maine.”
Source: (Mathematica Policy Research, Inc, “Feasibility of a Single-Payer Health Plan Model for the State of Maine” Final report 12/24/03/, MPR Ref No: 8889-300, 80 pages. http://www.mathematica-mpr.com/PDFs/mainefeasibility.pdf)
November 2002: Rhode Island
Single Payer would save $270 million in Rhode Island
A study of single-payer in Rhode Island by analysts with Boston University School of Public Health and the consulting firm Solutions for Progress found that current health spending in Rhode Island is 21.5 percent above the national average and that incremental reforms cannot solve the state’s health problems.
Solutions for Progress studied two models of single payer reform one with consolidated financing alone, and one with consolidated financing combined with “professionalism within a budget.” They found that without health care reform, Rhode Island’s costs would continue to rise, while both models of single-payer could provide universal coverage while saving an estimated $270 million in the first year.
At first, the administrative and bulk purchasing savings have the largest impact. But over time, slowing the rate of inflation to 4 percent by making health professionals responsible for using resources prudently, (“professionalism within a budget”) has a larger impact. Over six years, they estimate that consolidated financing alone would save $4.4 billion, while single payer with “professionalism within a budget” delivery system reform would save over $6.6 billion. Again, both models of single payer would provide coverage for all the uninsured and improve coverage for all Rhode Islanders.
Source: (“Rhode Island Can Afford Health Care for All: A Report to the Rhode Island General Assembly” On-line at www.healthreformprogram.org. For copies of this report, please contact Alan Sager or Deborah Socolar or phone the Health Services Department at (617) 638-5042. )
October 2003: Missouri
Single Payer Would Save $1.3 billion in Missouri
Missouri Foundation for Health conducted a study on “health care expenditures and insurance in Missouri”.
A single payer health care plan in the state of Missouri would reduce overall spending by about $3 billion. “Assuming the universal health care plan adopted a benefit package typically found in the state, spending among the uninsured and underinsured would rise by nearly $1.3 billion when fully implemented. On the other hand, the use of a streamlined single claims and billing form (electronically billed) would reduce overall spending by about $3 billion. As a result health care spending would decline by approximately $1.7 billion.”
“Even if the state would adopt a more generous benefit package-one more generous than 75 percent of all private insurance benefits in the state-overall spending would decline. Overall health care spending would likely decline by $ 1.3 billion under the streamlined administrative structure.”
Source: ( “A Universal Health Care Plan for Missouri”, the full report can viewed at http://www.mffh.org/ShowMe3.pdf)
June 2004: Georgia
Single Payer in Georgia would reduce healthcare spending
A fiscal study by the Virginia-based Lewin Group found that Single Payer health would cover all Georgia residents and save $716 million annually.
The “SecureCare” program would offer residents a comprehensive benefits package that includes long-term care and prescription drug coverage. It would be financed by replacing health insurance premiums with a combination of payroll and income taxes as well as modest new tobacco, alcohol and sales taxes. ” Nearly all Georgia families would pay less for health care than they are today for much better coverage.
Source: (The Lewin Group, Inc. “The Georgia SecureCare Program: Estimated Cost and Coverage Impacts” Final report 10/21/03)
(Full text of the study available online at:
http://www.pnhp.org/news/lewinanalysis.pdf)
February 2005: California
California could save $344 billion over 10 years with single payer
A study by the Lewin Group, finds that singlepayer would save California $343.6 billion in health care costs over the next 10 years, mainly by cutting administration and using bulk purchases of drugs and medical equipment.
The bill’s author, Sen. Sheila Kuehl, D-Santa Monica, said the report “demonstrates that we can do it. We need the will to do it. It makes insurance affordable for everybody.”
Lewin Group Report
The Health Care for All Californians Act: Cost and Economic Impacts Analysis
January 19, 2005
Fact Sheet
* The Lewin report, prepared by an independent firm with 18 years of experience in healthcare cost analysis, affirms that we can create a fiscally sound, reliable state insurance plan that covers all Californians and controls health cost inflation.
* The Lewin report shows that all California residents can have affordable health insurance; and that, on average, individuals, families, businesses and the state of California, all of whom are now burdened with rising insurance costs, will save money.
* In February, State Senator Sheila Kuehl (D-23) will introduce the California Health Insurance Reliability Act (CHIRA), based on these findings. CHIRA, based on the Lewin Report model will insure every Californian and allow everyone to choose his or her own doctor.
Savings Overall
The Lewin report model would achieve universal coverage while actually reducing total health spending for California by about $8 billion in the first year alone. Savings would be realized in two ways:
1. The Act would replace the current system of multiple public and private insurers with a single, reliable insurance plan. This saves about $20 billion in administrative costs.
2. California would buy prescription drugs and durable medical equipment (e.g., wheelchairs) in bulk and save about $5.2 billion.
Savings for State and Local Governments
* In addition, state and local governments would save about $900 million, in
the first year, in spending for health benefits provided to state and local
government workers and retirees.
* Aggregate savings to state and local governments from 2006 to 2015 would
be about $43.8 billion.
Savings for Businesses
* Employers who currently offer health benefits would realize average savings of 16% compared to the current system.
Savings for families
* Average family spending for health care is estimated to decline to about $2,448 per family under the Act in 2006, which is an average savings of about $340 per family.
* Families with under $150,000 in annual income would, on average, see savings ranging between $600 and $3,000 per family under the program in 2006.
Cost Controls
* By 2015, health spending in California under the Act would be about $68.9
billion less than currently projected. Total savings over the 2006 through 2015 period would be $343.6 billion.
* Savings to state and local governments over this ten-year period would be
about $43.8 billion.
Comprehensive Benefits
* The Lewin Report assumes an insurance plan that covers medical, dental and
vision care; prescription drug; emergency room services, surgical and recuperative care; orthodontia; mental health care and drug rehabilitation;
immunizations; emergency and other necessary transportation; laboratory and
other diagnostic services; adult day care; all necessary translation and interpretation; chiropractic care, acupuncture, case management and skilled
nursing care.
Efficiencies
* The Lewin Report shows that efficiencies in the system make these superior
benefits available while generating savings.
Freedom to Choose
*The Lewin Report model assumes the consumer’s freedom to choose his or her
own care providers. This means that each Californian will be free to change jobs, start a family, start a business, continue education and or change residences, secure in the knowledge that his or her relationships with trusted caregivers will be secure.
For more information please go to the below link:
http://democrats.sen.ca.gov/senator/kuehl/
August, 2005
The National Coalition on Health Care
Impacts of Health Care Reform: Projections of Costs and Savings
By Kenneth E. Thorpe, Ph.D.
This fiscal analysis of the impact of four scenarios for health care reform found that the single payer model would reduce costs by over $1.1 trillion over the next decade while providing comprehensive benefits to all Americans. The other scenarios would be improvements over the status quo, but would not reduce costs as dramatically or provide the same high-quality coverage to all.
Summary of the Coalition’s Specifications:
1. Health Care Coverage for All
2. Cost Management
3. Improvement of Health Care Quality and Safety
4. Equitable Financing
5. Simplified Administration
Reform Models studied:
Scenario 1: employer mandates (supplemented with individual mandates as necessary)
Scenario 2: expansion of existing public programs that cover subsets of the uninsured
Scenario 3: creation of new programs targeted at subsets of the uninsured (FEHBP model)
Scenario 4: establishment of a universal publicly financed program (single payer)
Colorado, August 2007
The Lewin Group
Technical Assessment of Health Care Reform Proposals (Proof Report)
August 20, 2007
Prepared for: The Colorado Blue Ribbon Commission for Health Care Reform
The Lewin Group was engaged by the Colorado Blue Ribbon Commission for Health Reform to assist in developing and analyzing alternative proposals to expand health insurance coverage and reform the Colorado
health care system.
Single Payer Results, Excerpt:
COLORADO HEALTH SERVICES SINGLE PAYER PROGRAM
The Colorado Health Services (CHS) Program is a single payer plan that would provide coverage to all residents of the state, including state and local workers, and residents currently covered under Medicare, Tricare, Veteran’s Health, Indian Health Services and Federal Health Benefits programs. The program would provide all people with comprehensive health care benefits that cover the same list of services now covered by the Colorado Medicaid benefits package. Consumers would have their choice of providers and hospitals within the state.
0 - number remaining uninsured
$1.4 billion - decline in health spending
All Other Plans, Results, excerpt:
BETTER HEALTH CARE FOR COLORADO
Better Health Care for Colorado provides a path to universal health care through a public program expansion and access to private insurance coverage with low-income subsidies through a Health Insurance Exchange. Individuals eligible for public programs would receive benefits under those programs, and individuals who purchase private coverage would have access to a limited core set of benefits, with premiums copays.
467,200 - number remaining uninsured
$595 million - increase in health spending
SOLUTIONS FOR A HEALTHY COLORADO
Solutions for a Healthy Colorado provides coverage to all Colorado residents under a Core Limited Benefit Plan in the private sector and expands coverage under Medicaid and Child Health Plus (CHP+). People who are low income but who would not be eligible for the government programs would receive a premium subsidy.
133,400 - number remaining uninsured
$271 million - increase in health spending
A PLAN FOR COVERING COLORADO
A Plan for Covering Coloradans provides coverage to Coloradans through a public program expansion and a mandatory private pool for all residents not eligible for the public program. It provides a minimum benefits package in a private pool and premium assistance based on income for those who cannot afford insurance. All plans would provide a comprehensive minimum benefits package, and differ mainly on cost-sharing amounts.
106,500 - number remaining uninsured
$1.3 billion - increase in health spending
Source:
Lewin’s Technical Assessment of Health Care Reform Proposals (230 page report):
http://www.colorado.gov/cs/Satellite?c=Page&childpagename=BlueRibbon%2FRIBBLayout&cid=1178305890619&p=1178305890619&pagename=RIBBWrapper
Comment by Dr. Don McCanne, PNHP Senior Health Policy Fellow:
Once again, fiscal analysis shows that the models of reform that build on our highly flawed, fragmented system of financing health care actually increase health care spending while falling far short on the goals of reform. In contrast, the single payer model would provide truly comprehensive care for absolutely everyone while significantly reducing health care spending.
December, 2007: Kansas
Single Payer would save $869 million
The Kansas Health Policy Authority hired the consulting firm of Schramm-Raleigh to do a fiscal analysis of five options for expanding coverage. They found that single payer (“the Mountain plan”) would cover all the uninsured and reduce state health spending by $869 million annually. The other plans would cover a portion of the uninsured and would raise costs between $150 million to $500 million in the state.
A link to the Schramm-Raleigh Report “Kansas - Pricing the Roadmap to Reform” is located on the web site of the Kansas Health Policy Authority :
www.healthfund.org/reportspubs/11012007fdn_report_khpa.php
July, 2009: New York
The New York State Department of Health and Department of Insurance contracted with the Urban Institute to compare 4 options for health reform in the state, including single payer (“Public Health Insurance for All”). The results of the two-year study showed that single payer was the only plan that would cover everyone and was the most effective plan at controlling costs. The report found that the savings from single payer would substantially increase over time. By 2019, the Urban Institute analysis showed that single payer would save $20 billion annually compared to the present system. Single payer would cost $28 billion less annually than an individual mandate plan and $19 billion less annually by 2019 than an expansion of Family Health Plus.
The press release with a link to the full study is here: http://www.pnhp.org/news/2009/july/advocates_call_on_go.php
Major fiscal consulting groups:
The Lewin Group, Washington DC (703) 269-5500 [Owned by the giant insurer, UnitedHealth Group]
Mathematica Policy Research Group (609) 799-3535
Health Reform Program, Boston University (617) 638-5042
Solutions for Progress (215) 972-5558