Why Single-Payer Health Care Saves Money

❝ Lingering uncertainty about the fate of the Affordable Care Act has spurred the California legislature to consider adoption of a statewide single-payer health care system.

Sometimes described as Medicare for all, single-payer is a system in which a public agency handles health care financing while the delivery of care remains largely in private hands.

Discussions of the California measure have stalled, however, in the wake of preliminary estimates pegging the cost of the program as greater than the entire state government budget. Similar cost concerns derailed single-payer proposals in Colorado and Vermont.

❝ Voters need to understand that this cost objection is specious. That’s because, as experience in many countries has demonstrated, the total cost of providing health coverage under the single-payer approach is actually substantially lower than under the current system in the United States. It is a bedrock economic principle that if we can find a way to do something more efficiently, it’s possible for everyone to come out ahead.

❝ By analogy, suppose that your state’s government took over road maintenance from the county governments within it, in the process reducing total maintenance costs by 30 percent. Your state taxes would obviously have to go up under this arrangement.

But if roads would be as well maintained as before, would that be a reason to oppose the move? Clearly not, since the resulting cost savings would reduce your county taxes by more than your state taxes went up. Likewise, it makes no sense to oppose single-payer on the grounds that it would require additional tax revenue. In each case, the resulting gains in efficiency would leave you with greater effective purchasing power than before.

❝ Total costs are lower under single-payer systems for several reasons. One is that administrative costs average only about 2 percent of total expenses under a single-payer program like Medicare, less than one-sixth the corresponding percentage for many private insurers. Single-payer systems also spend virtually nothing on competitive advertising, which can account for more than 15 percent of total expenses for private insurers.

The most important source of cost savings under single-payer is that large government entities are able to negotiate much more favorable terms with service providers. In 2012, for example, the average cost of coronary bypass surgery was more than $73,000 in the United States but less than $23,000 in France.

Although Republicans and Conservative Democrats have blocked civilians from the opportunity – so far – the essential benefit that produces lower cost insurance for our military and military veterans is just such negotiations.

Liars lie. That’s what they are paid to do. From Congressional politicians down to their state-level peers, media hacks, foundations chartered by conservative dollar$ – earn a significant chunk of their payola providing lies about the cost of universals insurance, class-conscious education, policing responsive to the needs of citizens instead of gun lobbies. No doubt, anyone thoughtful enough to look at lobbying practices in the United States can add to the list.

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