Economist touts savings of single-payer health care
By Bennett Hall
Corvallis (Ore) Gazette-Times, May 13, 2014
Gerald Friedman is an economist, and when he crunches the numbers on health care, he comes up with what he believes is an inescapable conclusion: a single-payer system is the way to go.
Based on his analysis, he believes that extending coverage to all U.S. citizens under Medicare, the government-backed insurance plan for Americans 65 and over, would generate well over $500 billion in cost savings the first year and about $2 trillion over a decade.
“You cannot come up with an economic policy that would have such a large, immediate effect on the U.S. economy,” said Friedman, a professor of economics at the University of Massachusetts.
Friedman will be in Corvallis on Friday and will discuss his views in a pair of free, public talks (see box). His visit is part of a weeklong Oregon tour, sponsored by Health Care for All-Oregon, that also includes appearances in Portland, Pendleton, La Grande, Eugene, Bend and Ashland.
“It’s an economist’s confirmation of what we have been saying — that it’s possible to cover everybody and do it at less cost,” said Mike Huntington, a retired Corvallis physician who runs the speakers’ bureau for the statewide health care reform group.
Much of the savings, Friedman says, would come from eliminating unnecessary layers of administration and lowering prescription costs through bulk purchasing of drugs. At the same time, putting all Americans in a single risk pool would shift some of the cost burden off the sick and the poor and onto the healthy and wealthy, who can afford to pay more.
“Many American hospitals have more people doing billing than they have beds,” he said.
“It’s a win-win-win for everybody except the insurance companies and the pharmaceutical companies.”
Friedman, who has served as a consultant to single-payer health care campaigns in several states, estimates that Oregon could save $8.4 billion in health care costs if it implemented such a system next year. Even with a projected increase in utilization expenses of $2 billion, that’s still a net savings of more than $6 billion.
The new federal health insurance law that came online this year is making some headway, he said, but he thinks those gains will be short-lived.
“There will still be 20 million people left uninsured under the Affordable Care Act, and millions more will be left underinsured,” Friedman said. “And the Affordable Care Act does very little to control health care costs.”
Eventually, he believes, spiraling cost increases will spur Americans to demand that Congress take action and implement some sort of single-payer system.
“In five years it will be clear that the Affordable Care Act is not fulfilling its goals,” Friedman said. “Push will come to shove.”
Economist Gerald Friedman will give two free talks on the U.S. health care system in Corvallis on Friday, followed by an evening wine and cheese reception to benefit Mid-Valley Health Care Advocates. The schedule:
- “Best Health Care? A U.S.-International Comparison,” noon, Room 115, Oregon State University Hallie Ford Center, Southwest 26th Street and Campus Way
- “Can We Afford Health Care for All?,” 7 p.m., Dennis Hall, First Presbyterian Church, 114 S.W. Eighth St.
- Reception, Dennis Hall, First Presbyterian Church, 114 S.W. Eighth St., $15, advance tickets available at Grass Roots Books & Music, Winestyles and mvhca.org