Posted on July 28, 2009

Advocates Call on Governor Paterson to Highlight Savings from Single Payer Health Care for All -- Projected to Save $20 Billion annually by 2019


Groups Want State Lawmakers to Hold Hearings on Long-Delayed Universal Health Care Study

July 28, 2009
For More Info: Mark Dunlea, 518-434-7371 xt 1#
Dr. Richard Propp, 518-482-0420

(Albany, NY) Universal health care advocates today called upon the State Legislature and the Governor to organize a series of public forums and hearings around the state on the recently released study of the most cost-effective way to provide health care to all New Yorkers.

The groups also called upon the Governor to propose a single payer universal health care system for New York. The Governor was a long time sponsor of single payer as a State Senator.

The long awaited study, released late last Friday, concludes that a single payer Medicare for All type program is the most cost-effective way to provide health care to all New Yorkers. (A copy of the report is at There will be a rally in DC this Thursday, July 30th, the 44th birthday of Medicare, to call for a national single payer plan. Groups in Albany will rally at 5 PM at 90 State St., the offices of the state insurance lobby group.

“While we believe this report understates the savings from single payer and overstates the benefits from the public-private hybrid models, we are pleased that it finds that single payer is the most cost-effective approach to provide quality health care to all New Yorkers. We hope the Governor will widely publicize its findings to influence the national debate. Unlike the recent studies by the Congressional Budget Office, this report examined the impact of health care proposals on all segments, namely, taxpayers, consumers and employers,” said Mark Dunlea, Executive Director of Hunger Action Network and Co-Chair of Single Payer New York.

Hunger Action Network, along with Rekindling Reform, led the NY Universal Health Care Options Campaign that sought state funding to study the costs associated with various approaches to universal health care.

The report found that savings from single payer substantially increase over time. By 2019, the Urban Institute concludes that single payer would save $20 billion annually based on the report’s projected 6% annual increase in baseline health care cost ($130 billion for single payer vs. $150.25 billion for present system). Single payer would cost $28 billion less annually than the public-private hybrid (e.g., expand public programs like Medicaid, a small public option, and a mandate to obtain insurance). The hybrid model had been a favorite of Governor Spitzer and his health care advisors.

Single payer would also cost $19 billion less annually by 2019 than the NY Health Plus proposal by Assembly Health Committee Chair Richard Gottfried. NY Health Plus would automatically enroll all New Yorkers in Family Health Plus; however, employers could decide to opt out to purchase private insurances and a tax subsidy would be provided.

A similar report by the Lewin Group for the State of California concluded that a state single payer system would reduce spending below projected levels by an average of $34 billion annually over a ten-year period. Studies done in five other states also found that single payer was the most cost-effective approach to universal health care.

“The Urban Institute report clearly shows that adequate health care for every New Yorker is achievable. Now we need the will to make it happen,” said Robb Smith, Executive Director of Interfaith Impact of New York State. “Health care for everyone is a fundamental moral issue. It is a human right that gets at the very foundation of what it means to be human and live in community.”

“The effort to guarantee quality health care to all Americans is a daunting challenge that has defeated Presidents and Congress a half-dozen times over the last sixty years,” noted Dr. Richard Propp, Chair of the Capital District Alliance for Universal Health Care. “Trying to re-organize and improve one-sixth of the national economy is a complicated task. It is important that health care reform be a transparent and participatory process, where New Yorkers can find out what is going on and have their voices heard. We call upon the Governor, Assemblymember Gottfried, Senators Breslin and Duane, to hold hearings in the next few months across this state on this important report,” he added.

The groups want Congress to adopt a national single payer health care system this year such as HR 676 (Conyers) or S703 (Sanders). If Congress fails to act, they want the state to be able to start its own single payer system. The Canadian single payer system initially started at the province level. Ten Congress members from New York are single payer sponsors. More than half of the State Assembly and a majority of State Senators have sponsored single payer legislation. Both houses recently passed resolutions calling upon Congress to enact HR 676.

The Urban Institute estimated a single payer / public health insurance for all (excluding senior citizens) would cost an additional $2.4 billion in its first year, while the other expansion models would cost around $6 billion extra. Total cost in the first year for single payer would be $86.3 billion. While government spending would increase, employers and individuals would save an equal amount while covering everyone.

Even though single payer was found to be the most cost effective, advocates contend that the study underestimated savings. The study estimated that the administrative savings from single payer would only be 10% over 10 years- the same percentage it estimated for the much smaller public option model under the hybrid model. No basis is given for this and other assumptions. Single payer advocates say savings should be much higher, especially if the program includes all residents including Medicare and elderly Medicaid participants. The Lewin group study for California estimated administrative savings of $20 billion annually. The study appears to ignore the tremendous savings and cost reductions that would be available to doctors and hospitals under a single payer plan since they would no longer have to deals with scores of insurance companies and their conflicting policies and paperwork. Even though the study did not include Medicaid under single payer, it decided to charge both single payer and NY Health Plus 18% higher premiums for Medicaid participants; while somewhat higher payments would be expected, no such cost allocation appears to have been charged to the hybrid proposals.

The Lewin group study in California also found more savings from the bulk purchasing of prescription drugs under a single payer system

. The study also appears not to factor in the reduction of health care costs that would result from having a health care system that covers everyone. Especially combined with preventive care, other countries have shown that it is much cheaper to operate a health care system that focuses on keeping healthy rather than on the American approach of spending more money to cure the sick. In addition, having a health care system that automatically covers everyone would also reduce the cost of other programs that deal with health care costs, such as automobile insurance (e.g., for bodily injury), workers compensation and medical malpractice.

The report admitted that most of the public-private hybrid models (18 variations were studied) that focuses on incremental changes would not achieve universal health care. However, the Urban Institute did claim 100% coverage when expansion of eligibility and subsidies for existing programs were combined with an insurance mandate and public option. Other studies by the CBO and the Lewin group of such models have all found uninsurance rates of at least 3 to 4%, with the real numbers of uninsured significantly higher (which impacts on emergency room care) due to excluded populations such as legal immigrants and undocumented workers.

President Obama stated at his health care national press conference last week that single payer was the only system that would provide 100% health care coverage.” Now, the truth is that unless you have a what’s called a single-payer system, in which everybody’s automatically covered, then you’re probably not going to reach every single individual,” said Obama.

“We waited two years for this report, more than 14 months than initially predicted. Just because the results didn’t support the positions of certain administrative officials wasn’t a legitimate reason to try to bury the findings by releasing it late on the Friday after the Senate’s two day end of session marathon. When the Governor’s office first held the hearings, they admitted they were stunned to find that most of the hundreds of consumers, doctors, nurses and researchers who spoke said single payer was best. Even though they directed the Urban Institute to study a dozen variations of their favorite approach, single payer came out best. We need the Governor to stand with the people and do what is best in providing quality health care to all New Yorkers,” added Mark Dunlea.

The report estimates that 10.5 million people (61.1% of the population) have health insurance coverage through employer-sponsored insurance. Medicare / CHIP / FHP covers 3.7 million people or 21.4%. About 250,000 (1.4%) are covered by the non-group market (including Healthy NY). An estimated 2.7 million are uninsured.