Sen. Sheila Kuehl on the LAO report
LAO Confirms Single Payer Reduces Health Care Spending, Contains Annual Growth
by State Senator Sheila Kuehl
California Senator Sheila Kuehl
June 16, 2008
The new LAO report did not actually analyze SB 840
Although the LAO’s report clearly showed the kinds of savings a single payer plan would provide for the State, workers, employers and private individuals, it was not an assessment of SB 840. SB 840, now awaiting a hearing in the Assembly Appropriations Committee, does not contain details concerning taxes, premiums, expenses or other financial matters, but rather constructs a Blue Ribbon Panel, made up of statewide officers, to research and propose the actual funding mechanism and put it out for a vote of the people, along with the entire health insurance plan.
What the LAO found
The LAO study confirmed that a single payer health care system saves money and lowers the rate at which health care costs grow each year.
Generally, the LAO report agreed with the findings of the Lewin Group study of 2006 with regard to the impact of single payer on the growth in health care spending and found that Lewin’s projections for the legislation’s impact on health care spending were reasonable. Like Lewin, the LAO analysis identified substantial savings on administrative costs, bulk purchasing of drugs and durable medical equipment, and confirmed that it would lower the rate at which costs grow every year.
Need for Single Payer greater than ever
The main lesson of the Analyst’s report is that the people and employers of California are continuing to pay escalating healthcare costs while wages and payrolls are flatlining. Those costs are a drain on our already shaky economic outlook. SB 840 will bring stabilization to the healthcare crisis and, since the Blue Ribbon Panel will have flexibility to adjust the details of premium proposals, single payer is still our best answer.
Comment:
By Don McCanne, MD
When you hear criticisms of single payer based on this report, keep in mind the facts. The Legislative Analyst did not find any significant problems with the single payer model. It would provide all essential services for everyone while slowing increases in health care costs. What it did show is that delaying reform is increasing costs by tens of billions of dollars, and the failure to address our flat wage scales is creating the need to use even more progressive methods of financing health care.
Current proposals to use an expansion of private plans will fall short on universality and comprehensiveness, and will be even more expensive because of the failure to adopt the cost efficiencies of the single payer model.
The LAO study shows that the failure is not in the single payer model - it works - but the failure in containing costs is due to not yet having enacted the single payer model.
You think health care reform would cost a lot now. Just wait until it’s expensive.