Savings from M4A. I don’t buy it and I’m not even an expert…maybe that’s a good thing.

The following sounds quite rosey, even attractive. Why wouldn’t we want this? The Lancet is a very respected, credible source.

I especially like this projection, “The entire system could be funded with less financial outlay than is incurred by employers and households paying for health-care premiums combined with existing government allocations.”

So, what we have is large savings and no additional cost beyond what we now pay. And we do that while adding significant new coverage, tens of millions more individuals and with no out-of-pocket costs for any patient.

There is only one thing you can count on with a universal health care system; the universal coverage part.

Unfortunately, you can’t get access to the assumptions used in this report. However, from previous studies they include administrative savings and lower fees paid for health care of all types. Below it does talk about “efficiency of American health-care services.”

Don’t believe for one second that all the projected savings can be achieved through administration. How, where, when, how often and what we pay for each service must change. That certainly does not mean the implied no interference between you and your doctor.

What it does mean is paying less for less health care, but don’t get me wrong. That’s not necessarily bad, but it is different than what most Americans have come to expect, to meet these projections, very different.

Employers spend about 8% of payroll on health benefits, but that is for far less in benefits than proposed for M4A including mostly high deductible plans and no long-term care. How M4A could be financed as claimed is nothing less than amazing…and doubtful IMO.

Most Americans get their health coverage through their employer (most self-insured) or some existing government program such as Medicare or Medicaid. If this analysis compared existing Medicare to the private system there might be savings as claimed, but M4A is not Medicare for all.

Although health care expenditure per capita is higher in the USA than in any other country, more than 37 million Americans do not have health insurance, and 41 million more have inadequate access to care. Efforts are ongoing to repeal the Affordable Care Act which would exacerbate health-care inequities. By contrast, a universal system, such as that proposed in the Medicare for All Act, has the potential to transform the availability and efficiency of American health-care services. Taking into account both the costs of coverage expansion and the savings that would be achieved through the Medicare for All Act, we calculate that a single-payer, universal health-care system is likely to lead to a 13% savings in national health-care expenditure, equivalent to more than US$450 billion annually (based on the value of the US$ in 2017). The entire system could be funded with less financial outlay than is incurred by employers and households paying for health-care premiums combined with existing government allocations. This shift to single-payer health care would provide the greatest relief to lower-income households. Furthermore, we estimate that ensuring health-care access for all Americans would save more than 68 000 lives and 1·73 million life-years every year compared with the status quo.

HEALTH POLICY| VOLUME 395, ISSUE 10223, P524-533, FEBRUARY 15, 2020 The Lancet

But let’s accept that we can save a net 13%. As I have said before, then what? Back in the 1980s there were claimed initial savings for HMOs. Some materialized but then costs increased like everyone else. Medicare routinely raises deductibles and has cut fees more than once and then reinstated some after protests. In 2020 premiums for Part B are increasing 7%. What do people think will happen over time in a system with coverage for any and all health care services and zero out-of-pocket costs for patients? What happens if the federal M4A budget calls for an increase of 5% and costs actually increase by 7%?

Here is what CMS says about current Medicare:

Medicare spending growth is projected to have accelerated to 5.9 percent in 2018 from 4.2 percent in 2017. Contributing to this acceleration is faster per enrollee growth (3.1 percent in 2018 versus 1.7 percent in 2017) from higher private health plan payments, as well as higher spending growth for hospital care and prescription drugs. In 2019, Medicare spending growth is projected to accelerate again to 7.1 percent related to higher fee-for-service payment rates. Over 2020-27, Medicare spending is projected to grow by 7.6 percent per year on average, or 0.5 percentage point more rapidly on average than in 2019, reflecting the expectation of a continued rebound in growth in the volume and intensity of Medicare services to rates more similar to the program’s long-term historical experience.

The expectations for and projected savings for M4A are unrealistic which is not to say some form of universal coverage is not desirable.

2 comments

  1. The first year numbers are misleading as well. For the tens of millions who lack health insurance today, there is pent up demand. For those underinsured, the other group with the uninsured that supposedly dies because they deny themselves care, there is even greater pent up care demand. Bernie, this week, claimed there were 87 million in the two groups.

    As they say, if you think health care is too expensive today, just wait until it is FREE!!!!!

    Like

  2. “This shift to single-payer health care would provide the greatest relief to lower-income households.”

    On its face this is BS. Low income households qualify for state and federal programs to help pay for healthcare.

    Medicaid & CHIP coverage. Medicaid and the Children’s Health Insurance Program (CHIP) provide free or low-cost health coverage to millions of Americans, including some low-income people, families and children, pregnant women, the elderly, and people with disabilities.

    Many hospitals have trust accounts to pay for low income families bills. I live in a small (60,000 people) city in Montana and the local hospital covered my wife’s bill of $4500 after the insurance paid their part. We only had $16,000 of income at the time. Many people are treated at the emergency room or local county health department and very little or nothing is paid by the patient.

    Like

Leave a Reply to BenefitJack Cancel reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s