Posted on April 10, 2002

Providing Health Insurance to All Could Save Billions on Health Costs


Don McCanne, MD (949) 493-3714
Carla Woodworth (510) 832-7134
Quentin Young, MD (312) 782-6006

Providing Health Insurance to All Could Save Billions on Health Costs

Lewin Study Finds Single Payer Saves Money, Protects Doctor-Patient Relationship

A study of nine options for covering California's seven million uninsured by the conservative D.C.-based consulting firm of Lewin, Inc. finds that a single payer system of government financing of health care in California would actually reduce health spending while protecting the doctor-patient relationship. The study will be officially released by the California Health and Human Services Agency this Friday, April 12.

"This study shows single payer is the only system that guarantees that every one of the 34 million Californians would get the health care they need when they really need it--and does so at a savings to us all," said Don McCanne, MD, President of Physicians for a National Health Program (PNHP). "The findings apply equally to other states as to California."

"As physicians, we know that protecting the doctor-patient relationship is at the core of providing good care. The Lewin study demonstrates again that a system with government financing like Medicare stabilizes care for patients. The current system that treats health care as a commodity to be bought and sold disrupts care incessantly while driving up costs," said McCanne.

Single payer financing saves billions by reducing waste on paperwork and overhead. A 1991 study by the U.S. General Accounting Office predicted administrative savings of 10% of health spending with a national single payer system (over $140 billion in 2002).

Three of the nine options studied proposed a government-financed system.

A proposal by James Kahn, UCSF; Kevin Grumbach, UCSF; Krista Farey, 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.

A second proposal by Ellen Shaffer, UCSF, would reform both financing of health care 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.

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 non-profit Kaiser Permanente, the state's largest integrated health system, would continue.

"Only those proposals with single payer financing guarantee that every Californian will get the health care they need when they really need it---and do so at reduced costs," said Dr. Quentin Young. "California is pointing the way to a national solution."

The Lewin study will be posted on Friday after its official release.


Dr. Don McCanne is President of PNHP and co-author of the Kahn et al. proposal for reform.

Contact information for the study's other authors may be obtained from Carla Woodworth, Executive Director of PNHP's California Chapter, the California Physicians Alliance (CaPA).

Dr. Quentin Young is a Past President of the American Public Health Association and National Coordinator of PNHP. He is in private practice, internal medicine (773) 493-8212.

Physicians for a National Health Program (PNHP) is an organization of over 9,000 physicians that supports a single payer national health insurance program. PNHP is based in Chicago with chapters across the U.S. For local contact information, call (312) 782-6006,