So how much will single payer health care actually cost us?

[Solon]

Note, this could be considered a cross post, but doesn't require any context, from this thread:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=1130748&mesg_id=1137232

I decided, after over an hour of tracking down figures and staring at zeros for so long that I think I turned cross-eyed, that this warrants its own thread. My motivation is that I want people to double check my figures, I could have forgotten to carry a 1 or miscounted zeros, so please, double check the math. For those interested, according to my calculations, Americans would save about 200 dollars a month in a single payer system compared to Insurance Premiums, to a tune of a little less than 100 dollars a month. So here's the post:

Total health care expenditures in 2005(latest data I could find), was 2 trillion dollars...

Source:

http://www.nchc.org/facts/cost.shtml

These equals about 6,700 dollars for everyone within the United States. OK, so, where are the inefficiencies in the system? Let's look, shall we?

First are administrative costs, which, for our private system is about 30%. This is money that doesn't go into medical care at all, but is eaten up by pencil pushers in the hundreds of different insurance companies, hospitals, etc. that exist in the United States. Contrast this with Medicare, with a 3% or so of overhead, and you can see where some savings can come in for a publicly funded system. In comparison, Canada's administrative costs are about 1.2%.

Source:

http://www.pnhp.org/news/2003/august/administrative_costs.php

So, let's cut 27%(30-3) off the 2 trillion dollars. So that reduces the cost to about 1,460 Billion dollars. Some progress, but not enough to alleviate some of the worse cost increases. So, let's continue...

The next big money item would be perscription drug costs, which account for about 11% of medical expenditures in the United States. Source is here:

http://www.kaiseredu.org/topics_im.asp?id=352&parentID=68&imID=1

Now, the big difference between the United States and other developed nations is that the government cannot negotiate prices nor are any price controls implemented. Compared to Canada, U.S. drug prices are about 67% more expensive on average, source here:

http://www.aarp.org/research/international/perspectives/jul_03_rxprices_canada.html

So, we take the original health care cost in my subject line, and find out what 11% of that is, which is 220 billion dollars. Now, under a Single Payer plan, I would think it would be a good idea to implement a drug pricing policy similar to Canada, so we should see similar savings. So take the 220 billion, and subtract 67% off its costs, and you reduce the drug costs to 72.6 Billion dollars, that's a savings of 147.4 Billion Dollars. This is chump change, that much is true, but then again, every little bit helps.

So far we reduced the total expenditures to about 1,312.6 billion dollars. On a per capita basis, this is about 4,375.33 dollars per person. Still not as low as Canada, which is at about 3,165 dollars per person. There are other factors that can reduce overall United States health care costs. Most lower income working families now, not being able to afford co-pays or deductibles, even if they have insurance, do not go to the doctor for regular checkups, and therefore increase total costs of health care when they don't come in until problems arise. Preventative care can be encouraged, reducing costs even more. Other ideas include negotiation, not only for drugs, but also services as well, which can contribute to other costs savings. Unfortunately, its hard to find figures for what the difference of these would be, so, as of right now, I will not claim any more savings in my current figure.

Let's compare this total Single Payer system with what we spend now, right now, combined, Medicare and Medicaid cost about 670.9 Billion dollars when taken together. Now, since the 2 trillion already takes these two systems into account, we are seeing, basically, a doubling of the Medical Health Care budget in the United States. The question now is where do we get this extra money. Well, I already mentioned taking at least some of it from the Pentagon, which has a budget of 699 Billion dollars, as of 2007. Now, we don't have to take all of it, a 2/3rds cut in the budget seems reasonable, I think they can deal with having fewer V-22 Ospreys, don't you think?

So that equals an additional 466 Billion dollars in the single payer system, add that to the current budget of 670.9 billion dollars and you get 1,136.9. Oh shit, we are short some money, the Health budget doesn't balance, a deficit, in this program, of about 175.7 Billion dollars. OK, so let's say we raise taxes to make up the difference, that would equal about 585.67 dollars that each person in the country will have to pay a year. Let's double that, to account for children and unemployed, to 1,171.33 dollars that each working person will have to pay a year. This is assuming a "flat tax" on FICA, which doesn't necessarily be the case. So, let's break it down by Month, divide by 12 and you get 97.61 dollars.

This sounds expensive, until you realize that the average payment of premiums in 2006 was 11,500 dollars for a family of four, or 4,200 dollars for an individual annually. This means that insurance premiums cost individuals an average of 350 dollars a month, more than 3 times more than a public system. Please bear in mind that the Medicare and Medicaid that people already pay will be replaced by this new tax system of a little less than 100 dollars a month. In addition, since this system is a replacement of private insurance, that means individuals will save over 200 dollars a month in premiums. This can increase spending by said people, either for luxuries, or for needs, but in either case, it would be enough money saved to help the economy overall.

The figures for the above paragraph come from the first link in this post, and the figures for the budget come from Wikipedia. One other thing to bear in mind is that the total cost for the single payer system could be less than I calculated here, as I said, preventative care, and negotiation for services can both reduce costs, possibly by a lot. So call it a "worse case" scenario, where we still couldn't be quite as cheap as Canada, but got close. The big question mark is, would we be willing to sacrifice all the pork in the Defense budget to help fund this system? That's the only thing I haven't figured out yet. But considering that we will still outspend pretty much everyone else in the world in military spending, I don't think reducing the budget by this amount would risk our National Security.

In fact, we could further reduce the Pentagon budget to help pay for Port Security, Airline safety and Security, and to increase disaster relief funding, which always needs more money, and better administration! All of these would further increase our National Security without huge, over budgeted, boondoggles that the Pentagon loves. Hell, increase pay for the troops, and get rid of the VA medical funding, our Vets would be treated like all other citizens, and since the MAJORITY of folks will be in a single-payer system, they will be the check on government waste and neglect.

OK, so there it is, it may be a little hard to read, if it is, I'm sorry, I just get into these modes, and it may seem complicated, hence why I want it double checked.

[2Design]

1. a whole hell of lot less than the republiks war machine has cost us and the world

We could pay for it probably with one week salary of halliburton

[barb162]

2. You're missing an important component of cost

And that's the people who don't get care now. Unions and others have reported this problem in regard to certain lines of coverage, like dental. There are people who avoid or delay care when they don't have insurance even if they have the money. Say people with tendonitis or bursitis of the shoulder or hip who can get along. But if they get covered, they have an operation right away. There's a lot of that going on right now in our country.

[Solon]

6. Actually, I'm one of those people that has a pinched nerve in my left shoulder...

I require surgery, and there is no way in hell I can afford it. So I thought about it, the problem was that there are no figures for this to begin with, so I can't really calculate the cost. Just like I can't really say how much preventative care would save us money. But, I believe that after the system is implemented, it would suffer from a "spike" in medical usage by American people that want treatable illnesses and conditions cured. At worse, I imagine the deficit will increase for the year, maybe an additional year after that, at worse, to pay for this spike, then things will calm down, and we will begin to see savings.

Over time, the savings pays for itself, as people don't fear paying prohibitively expensive co-pays and such, a doctor's office visit will still be a hell of a lot cheaper than going to the emergency room for every ailment. Besides, this will be one of those unavoidable costs to begin with, there are millions of Americans who need medical care now, I think its best to treat them as soon as possible, and find other ways to make up for the deficit afterwards.

[Hekate]

13. The sin is, our country HAS the money.But we spend over 50% of the budget on WAR.Not just this war

The total amount of military spending in the US -- research, development, contracts, equipment, the military forces, and the actual fighting -- comes to over 50% of the total budget.

We never did get our peace dividend from the fall of the Soviet Union. Never.

But the illusion is that if we spend money on universal health care then we have to stop providing our schools with books and classrooms.

Hekate

[barb162]

16. No, actually the country doesn't have the money.

Economically, we're just about in free fall; we're in a very dangerous spot. I am all for national health insurance except I can't figure how the country can pay for it. I think the CBO did a study about a year or two ago on it. We don't have the money. Now if taxes got raised drastically we could do it. That doesn't bother me at all; the deficit spending has to stop.

[Solon]

19. I disagree...

What we need to do is shuffle around the budget a little bit, the big bog down in our budget is the Military, which, in its current form costs far more than any side benefits the citizens could ever get out of it. Do that, increase the amount of tax on Medicare, modestly, and we can afford Single Payer. Even better, we can reduce the Pentagon's budget even further, and pay down the debt with that money that is "left over" in addition to rolling back the Bush tax cuts.

The best benefits to a Single Payer system is the side benefits. Saving people money on an individual level will give them more buying power. Separate insurance, permanently, from employment, and people will have job mobility again. In addition to this, costs to EMPLOYERS themselves are also reduced, saving them money, which will encourage them to hire more Americans, because we will be competitive with Canada and all other developed nations. Combine this with fair trade agreements, and we may actually be able to recover our economy. This will increase revenues to the government, so that they can invest in making this nation a zero-carbon dependent nation in a timely manner.

I could go on, but I'm tired, and going to bed, good night!

[barb162]

24. I agree with most of your points, especially about separating

insurance from employment. Especially in these days of middle class people losing their high paying jobs, being off-shored and working low wage part-time sales jobs. If this insane government of ours would GET RID of these damned free trade agreements and get some FAIR TRADE agreements in, maybe we could do something. But you know what? I think China and India have already "bought our lunch." They own our debt.

[Hekate]

25. Yes! I can't figure out why more employers aren't pressuring the government on this issue.

Every one of the points you made about employment mobility, the burden on employers, etc. is right.

Hekate

[Cleita]

3. Go to this website and read their proposal for single payer

universal health care. They have done the math for you and checked and double checked their figures. http://www.pnhp.org. You need fret no longer nor get sucked into the complicated actuarial math that the insurance companies and GAO both get caught up in. Simply, health care for all can be delivered for one third less cost per person than it costs now. And it covers everyone 100%. There is no need for copays or deductibles. A combination of payroll taxes and sales taxes can accomplish it like they do in Canada.

On edit: this is the actual proposal. http://www.pnhp.org/physiciansproposal/proposal/Physicians%20ProposalJAMA.pdf

The suggested methods of funding are on the last pages.

[Solon]

10. Only one-third? HA! I rule!

Me, an amateur, setup a system that does the exact same thing, but with a 2/3rds savings for individuals, and with close to a 40% cost savings. I rule! :)

[Cleita]

12. You rule! One-third less is conservative. In time it can probably

be delivered for half of what it is now. Now go convince the naysayers.

[Solon]

15. You know, I won't put a hard number on it, but...

Savings from preventative care, increased doctor visits, and negotiating for medical services from the federal government may lead to an addition 10 to 20% in cost reductions, making the system even more efficient, that would be almost a 60 percent reduction over our current 2 trillion dollar spending. But this is just a guesstimate based partly on my figures.

[Cleita]

17. Not only that but the website, which is run by physicians and

for physicians estimate that mal-practice suits would go down too cutting the cost of delivering medical care.

[Solon]

20. I know, being physicians, they would emphasize that, but lawsuits account for .62% of medical costs.

I didn't even bother factoring that in.

[Cleita]

23. I think you are wrong. Malpractice insurance has been a big

budget item for health care providers. I don't have any figures right now but remember reading about it in the past as part of a big problem of the cost of medical care, which the physicians have to pass on to the patient.

[Solon]

31. Nope, total cost of 6.5 billion, or .46% of total health care costs...

Source:

http://content.healthaffairs.org/cgi/content/abstract/24/4/903

[Princess Turandot]

26. Just an FYI

Medicare payments for inpatient hospital, nursing home, outpatient services and physician care are already set by the federal government; providers participate and thus accept the rates.* There's really no negotiations involved beyond industry lobbying. Payment amounts for similar Medicaid services while partially federally funded are set at the state level, once again (AKAIK) on a take it or leave basis. That's definitely the case in NYS. (I believe that in the case of Medicaid NYS, pharmacy payments are similarly set.) The Medicare pharmacy benefit (Part C) is an abberation in this regard. (The so-called Medicare HMOs do negotiate rates with hospitals and physicians, but that is separate and apart from what the feds pay the HMOs.)

*There are "non-participating" physicians who will see Medicare patients; the impact of this is on the patient, not Medicare, which does not pay any more than it would to a 'participating' physician. The majority of MDs who see Medicare patients are participating & accept payment assignment from Medicare because of cash flow.

[Cleita]

27. If NHC is implemented the way that the crafters of the plan envision,

physicians would be able to negotiate with the government on a yearly basis for their fees at a rate that is acceptable to both sides. Now it's one-sided, being what Medicare or Medicaid will pay for a procedure that is way behind the times these days as the fee schedules have not been updated with our wonderful Republicans in charge. Canada and other countries negotiate fees with health care providers on a yearly basis to keep up with the cost of living index.

[Princess Turandot]

28. That's true..

I was responding to the OP's comment about the potential for reducing healthcare costs by putting Medicare in a position to negotiate with providers. My impression is that many folks do not know that Medicare/Medicaid already largely set the prices that they pay. I'm completely in favor of a single payor plan but outside of the Medicare HMO/Pharmacy boondoggles I'm not sure if large savings can be achieved via changing Medicare payment amounts. Many MDS who do 'primary care' such as internists/family care doctors do believe that the high fees that are given to procedure-based MDs such as certain cardiologists, GI docs etc. are the root of much of Medicare's problem since well-care rates suffered in comparison and because the temptation is there to do tests like cardiac catheterizations. (The fee schedule system goes back to the mid-90's, I believe.)To me, that would suggest more of a resource reallocation that cost reduction is in order.

[barb162]

18. "payroll taxes and sales taxes "

There's the fallacy I think. With more jobs being offshored, etc., companies will increase offshoring even more and then the cost will all go to sales tax. Sales tax is regressive. Do you see where I'm going?

[Cleita]

22. Yes, but since payroll taxes have traditionally been taken

for Medicare, this will probably continue. Also, the money that companies and unions paid into health plans would be diverted instead into an employer payroll tax to fund this. It's reapportioning the money that would go to health insurance companies and HMOs to fund this. I think it's unavoidable. Since Canada partially funds their plan with sales tax, it seems that likely we will follow.

Look at it this way, it doesn't have to be a regressive tax if only items that are not of the necessity type are taxed, like recreational and luxury purchases, instead of food, clothing and such. Also, one thing that doesn't get taxed is services. I think it's time since services are used by the well off like pool services, landscapers, lawyers, accountants etc. Let's slap a sales tax on them.

[mmonk]

4. We can't pay for their plan to garrison the world

and rule it by force for privitization and take care of our citizens adequately by modern standards. That's what we're faced with.

[Hekate]

5. LA Times Health section today has a good article comparing US & other nations

...on money paid and care received. I recommend it. At the end of this lengthy article there are separate tables listing all presidential candidates' statements on their proposals to fix our system, and a comparison of annual cost per citizen for the US and 5 other countries. We pay 2 to 3 times as much per person as anyone else, and are dead last among this group in overall quality delivered.

Hekate

http://www.latimes.com/features/health/la-he-global18jun18,1,1444274.story?coll=la-headlines-health&ctrack=1&cset=true

[Hekate]

9. Third World nations have top-notch care for those who can afford it.So do we....

That's one valid basis of comparison for wour situation. Even in countries where the overall level of health care is beyond primitive, those with money can buy the best. In this country, if you lose your job you lose your health care insurance, and for all Blue Cross or George Bush care, you can die in an alley from your untreated diabetes or breast cancer.

When a significant portion of bankruptcies in the US follow on the heels of a catastrophic illness in the family, you know something is vastly wrong.

However, members of Congress and the very wealthy have nothing to fear. They have access to the best.

Just like a Third World nation.

Hekate

[barb162]

21. Yes, our system is quite broken.

How to fix it? I have no idea.

[IChing]

7. The buy-out or integration (nationalization) of the health insurance

industry is not considered, for if they were to function at all for a transition
some of their personnel would have to be integrated into the new system, mostly
the paper pushers without the power of oversight on profit.

[TahitiNut]

8. After-tax dollars, deductible dollars, and tax dollars

They're all different. The working poor often pay for health insurance with incomes that aren't high enough to be subject to income tax and, thus, bear the full costs without a tax benefit. The wealthy, on the other hand, can deduct many medical expenses (including insurance) and get a 'subsidy' equal to their marginal tax rate. Employees receiving medical insurance as a benefit (mostly salaried white collar) pay usually no tax on the effective income. People currently on Medicare pay 25% of the premium - deducted from their Social Security benefit.

It seems clear that many of those with higher incomes don't want the working poor to get the same bargains they get.

The "hidden" bonus would be the cost savings to employers, imho. Benefits administration isn't cheap. It'd be interesting to see how much of their savings would be passed on equitably to their employees. In the simplest sense, the "HI" tax (currently 1.5%) would be increased to cover everyone and not just SS recipients. OASDI/HI isn't currently deductible for the employee. (It is, of course, deductible as a business expense for the employer.) It'd be interesting to see if it stays that way.

[IChing]

11. Since we our 37th in the world we have 37 choices

that were better than ours.

The next system could have even a better solution
that would put us in the top 10

or we could work our way to 36th.

[JCMach1]

14. We don't have to take a dime from anywhere else

the pie is just sliced differently... The system as we know it MUST end... and all the jackals will fight until they are dead..

[Vinca]

29. Less than a war. nt

[Solon]

30. Kicking this to the top because I'm an asshole. n/t

[Cleita]

32. No you're not.

Another :kick:

[Rosemary2205]

33. IMHO you need to budget the whole $2Trillion.

First off, medicare's payouts are awful and so many doctors are dropping it like a hot rock it's incredible. Medicare is in deep cheese. The payouts to doctors are going to have to be higher than what medicare currently pays, or else doctors will have to cram so many patients it to make it worth being at work that it will suck for patients and doctors both. The HMO's already tried using Nurses and physicians assistants to cut costs but the costs actually went up because people didn't get right care soon enough and ended up needing more extensive medical care.

Plus you are adding millions of poor Americans to the medical care system that currently are avoiding obtaining care. A lot of them are going to have expensive healthcare needs right off the bat because of years of neglect.


I don't think single payer universal care will save us any money but it will cover more people for the same amount of money and hopefully give a higher quality of care. IMHO expecting to save a lot of money by cutting out so much profit taking is unrealistic. Just MHO.

[and-justice-for-all]

34. I difference between the US and other countries..

...is how capital is distributed and what the priorites are.

It obvious that the US has their priorities in the wrong place, which is done so intentionally. All the other countries who do have a NHC system has gone through some major termoil at one point in time, like a adoloesents so to speak. The US is the youngest nation on Earth, immature, bullying other countiers to get what it wants at the expense of its citizens.

War is no longer important, the US and a few third world nations are all the continue with this war mongering barbarianism, pointless behavior of ignorance and blantent stupidity. The 'wealthiest' nation on the planet is also one of the most ignorant and selvish; not so much its average citizen, but those who scheme their way to doministic positions. 'IN GREED WE TRUST' is what should be on the currancy..

I saw SiCKO and just about vomited with disgust with how we are treated and all for just a few. This country has some major fucking problems that no one gives a shit about, greedy fucking suits who bleed the rest of us dry.

There is no excuse for the States not having a NHC system, the UK established theirs after WWII for fucks sake and there is not a damn good reason why it should NOT be established in the States! This country is fucked!

I think I will look into moving to the UK were they actully treat their citizens like people and not dirt.

[cooolandrew]

35. Basically remove the profit and save a fortune and also jobs...

... a lot of jobs move over seas due to th overheads of healthcare and workers with ailments, so once you fix that you fix a myriad of other problems.

[rasputin1952]

36. One system to go by is already in existence, Medicare...

and 50 others as well....Medicaid.

Under Medicaid, fraud is rampant, to the tune of billions of dollars. Healtcare professionals, from Dr. to hospital sccountants are ripping off the system at an incredible rate. (So are insurance companies, but they'd be out of the picture under UHC).

Another aspect is hat life saving, preserving and other situations would take priority. If certain procedures, like most cosmetic surgeries were dropped from the equation, and personal payment is required, it would cut into the cost as well. Cosmetic surgery for burn or accident victims is one thing, but breast/penis enlargement are something else entirely.

I( have no problem w/people making a profit, but I do have a problem when profit overrides accessibility to health care.

Another aspect of cost reduction is that 50 Medicare systems would essentially be wiped out, and that money allocated would bolster a federal program. Cracking down on military fraud and abuse would add hundreds of billions more. Just getting rid if "Star Wars" and it's subsidiaries that haven't produced viable results would be beneficial. Medicare would be eliminated as a separate entity, providing cost savings, and drug corps would be forced to fall into line by the introduction of new regulations and registration/patent laws. One should not get an extra 15 years on maintaining a med as proprietary because they chang the color of a pill, or change from cornstarch to soy starch as a binder.

There are a lot of ways costs could be reigned in w/o damaging healthcare, in fact if just fraud was reigned in, healthcare would actually become healthcare instead of a cash cow.