Medicare For All Would Save Money And Lives, Say Epidemiology Nerds At Yale

Every time we get to talking about Medicare For All in this country, one question pops up, over and over and over again — sure, it would be nice for everyone to have health care, but how are we going to pay for it?

If you are anything like me, you just scream, "Oh my god, it saves money! We will be paying less than we are paying now! Not more! Why will no one listen to me?" into the void forever. But, if you are like the good people at Yale's Center for Infectious Disease Modeling and Analysis, you prove it.

If you're not familiar with CIDMA, their jam is figuring out the best and most cost-effective means of implementing public heath policies and they do a lot of interesting studies on vaccines and stopping the spread of infectious diseases.

In a study published this weekend in The Lancet, titled "Improving the prognosis of health care in the USA," CIDMA found that Medicare For All would save us 13 percent a year on health costs and save the lives of more than 68,000 people.

They found that:

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.

That sounds pretty awesome!

There will be a few added costs, of course. CIDMA adds $38 billion for eliminating the issue of people defaulting on their medical bills, and $191 billion for the cost of insuring those who were not previously insured or were underinsured.

However, their estimate shows that we will save a lot more. Improved fraud detection will subtract $102 billion from our yearly bill; reducing insurance overhead costs for billing and administration (which are 2.2 percent with Medicare but 12.4 percent with private insurance) will save us $219 billion; reducing pharmaceutical prices with negotiation will save us $188 billion; reducing reimbursement rates will save $100 billion; and eliminating avoidable emergency room visits as a result of improved primary care will save us $78 billion.

One of the more interesting ways CIDMA says Medicare For All will reduce costs is by regulating the cost of hospital services across the country, pointing out that most of the difference in cost is not attributable to cost of living differences or better quality of services.

The first set of savings could be achieved by applying the existing Medicare fee schedule across all hospital and clinical services. Hospital and clinical services constitute more than a third of health-care expenditure in the USA. Fees charged to private insurers are often inconsistent and incommensurate with the quality of services. For example, charges for an uncomplicated vaginal birth can be ten-times more expensive in some areas of California, USA, compared with others, and less than a third of this variation is attributable to location or the patient population. Moreover, hospital fees do not correlate with maternal and neonatal outcomes. The incongruity is even more pronounced when clinical outcomes and costs in the USA are compared with those in other countries. [...]

Similarly, appendectomy fees in the USA vary from $9332 to $33250, with an inverse correlation between cost and clinical outcomes. For instance, California has the highest median cost of appendectomies, but it also has higher rates of associated morbidity and perforation than any other state.

Well that certainly is very horrifying to think about!

Now, perhaps you are thinking, okay, this sounds very nice and all, but how does this actually translate to my costs as a human person or as an employer? CIDMA's data shows that, either way, you're gonna be paying less than you are currently paying now.

Isn't this lovely? We get to save 68,000 lives and pay less for our health care than we are spending now. Think of all the people who will not die or lose their house or their kid's college funds!

Now, the really cool thing about this is that CIDMA didn't just do research, say what they found, and expect you to believe them; they also made a neat interactive tool so you can really understand the research yourself, called SHIFT — the Single Payer Health Insurance Interactive Financing Tool. That way, you can see how much it costs if we do certain things and how much revenue we can get to pay for it all and from where.

I had a really good time with this, especially the part where I got to click on "modify the estate tax" and "eliminate the Gingrich-Edwards provision" (the loophole for rich people who want to get out of paying payroll taxes), and "remove preferential rates for capital gains." It was very cathartic.

And as you can see, I actually managed to get my revenue even higher than necessary, with only a 7.5% payroll tax (the payroll tax is employer-side by the way! It seems like people don't know that, so I just want to mention!) and ZERO household income tax.

So hey! Maybe you've been having some nerves about Medicare for All! Or maybe you don't know exactly how to explain that we will all actually be saving money (and also lives!) to your more skeptical friends and relatives. This is pretty helpful either way.

See? Maybe we can have nice things after all!

[The Lancet]

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Robyn Pennacchia

Robyn Pennacchia is a brilliant, fabulously talented and visually stunning angel of a human being, who shrugged off what she is pretty sure would have been a Tony Award-winning career in musical theater in order to write about stuff on the internet. Follow her on Twitter at @RobynElyse


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