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RAND analysis of the New York Health Act - a single payer proposal

RAND Corporation Study Confirms: New York Health Act "Could Expand Coverage While Reducing Total Health Spending"

Richard N. Gottfried, New York Assembly District 75
Chair, Assembly Health Committee

Gustavo Rivera, New York Senate District 33
Ranking Member, Senate Health Committee

August 1, 2018

State Senator Gustavo Rivera and Assembly Health Committee Chair Richard Gottfried, sponsors of the New York Health Act in the New York State Legislature, welcomed the findings of a study of the bill by the highly-regarded, independent, non-profit RAND Corporation. The study confirms that New York Health would reduce total health care costs, while increasing spending on actual care rather than administration and insurance company profit; provide full health coverage to every New Yorker; save substantial money for almost all New Yorkers; and generate a net increase in employment due to increases in disposable income. 

In December 2017, the New York State Health Foundation commissioned the RAND Corporation to assess the savings, costs, and feasibility of the New York Health Act. Using conservative estimates, the RAND study establishes that New Yorkers would use more health care services under the new single-payer plan than under the current system, even as total health care spending would be slightly lower in 2022 growing to a savings of $15 billion annually by 2031 due to administrative efficiencies. 

The study highlights that the majority of New Yorkers would pay less under the New York Health Plan – New Yorkers in the bottom 90% of household incomes would save an average of $2,800 per person annually – thanks to an equitable distribution of taxation based on the ability to pay. In addition, premiums, deductibles, copays, out-of-pocket payments, and out-of-network charges would be eliminated.

“This is an important validation of the New York Health Act by one of the most prestigious analytical firms in the country,” said Assembly Health Committee Chair Gottfried.  “RAND shows we can make sure every New Yorker gets the care they need and does not suffer financially to get it; save billions of dollars a year by cutting administrative costs, insurance company profit, and outrageous drug prices; and pay for it all more fairly.  Even though RAND thinks the net savings back in the pockets of New Yorkers will be less than I think we’d actually get, this is still a terrific deal for New York.  The study also shows it’s feasible to include long term care – home health care and nursing homes – in the bill.

“The RAND study makes it clear that the New York Health Act is not only feasible, but the most fiscally responsible option for our State”, said State Senator Gustavo Rivera, Ranking Member of State Senate Health Committee. "While we estimate that the benefits to New York State will be greater than those outlined in the study, we all agree that the implementation of the New York Health Act translates into more savings and jobs, while expanding critical health care coverage and access for all New Yorkers regardless of their wealth. I will continue to work with Assembly Member Gottfried and the many advocate organizations that support the bill as we stand up for what is right and work to implement an efficient and universal healthcare system in New York State.”

http://nyassembly.gov...

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Estimating the Effects of a Single-Payer Proposal in New York State

By Jodi L. Liu, Chapin White, Sarah A. Nowak, Asa Wilks, Jamie Ryan, Christine Eibner
RAND, Research Brief, August 1, 2018

Key Findings

1. The New York Health Act could expand insurance coverage in New York without increasing overall health spending, if administrative costs are reduced and growth in provider payment rates is restrained.

2. Health care would be financed by taxes rather than by premiums and patient out-of-pocket payments. Substantial new taxes would be required.

3. Depending on how progressive new tax rates are, health care payments would decrease among most residents and would increase among the highest-income residents.

RAND Research Brief (6 pages):
https://www.rand.org...

RAND Full Research Report (125 pages):
https://www.rand.org...

RAND News Release:

https://www.rand.org...

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Comment:

By Don McCanne, M.D.

This RAND study provides us with yet one more credible analysis that shows that single payer is a valid concept demonstrating that we can expand coverage to include everyone while controlling health care spending. This report should be particularly useful for health care reform advocates since it not only discusses single payer issues in general, but it also discusses the single payer concept as applied to one state, in this case New York.

Temporary political hurdles for New York include a Democrat in the state Senate who has shifted control to the Republicans by caucusing with them, and a CMS administrator in the Trump administration who has indicated that she will not cooperate with the waiver processes that would enable implementation of a single payer system at the state level.

Politics can change. It will be interesting to watch how New York does. But we must not let up on our efforts to enact a national single payer improved Medicare for all since our goal must remain one of achieving health care justice for all. If New York can get there first, then great for them. But let's try to get the job done nationally as soon as possible so the states won't have to act individually.

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