How We Know Single-Payer Won't Lower Health Care Costs

You’ve heard the US spends twice as much on health care as the rest of the developed world. Yet we’re not twice as healthy.

We’re mentally ill for sure because we keep rejecting a “single-payer” system like sensible countries have. Don’t you know, Citizen, that Medicare for All would drive huge efficiencies and slash costs? Yet you and other Americans have resisted it since the Roosevelt administration.

Do we delight in hearing of our uninsured neighbors’ bankruptcies? Do we get an extra thrill from skiing knowing a broken leg would mean financial ruin?

Perhaps some do. But some of us dispute the savings claims.

Where We’ll Save

Bernie Sanders promises Medicare for All would be about 20 percent cheaper. Others claim 60 percent. And they have a list of costs to trim, starting with reclaiming insurers’ outrageous profits.

Unfortunately, outrage buys fewer tongue depressors than one might hope. The top health insurers averaged 4.1 percent profit in 2017 (per Yahoo Finance). That’s taken on half (at most) of spending for-profit insurers handle. Eliminating those profits would save about 2 percent. Since health care gets 4.5 percent more expensive every year, that would in effect roll prices back to last August.

Then there are prescription drugs. Bernie Sanders assures us “the government will finally have the ability to stand up to drug companies and negotiate fair prices.” Perhaps he imagines Medicare boss Seema Verma holding America’s seniors hostage for a better deal from Pfizer.

The rest of the list rests on similarly questionable assumptions: lower administrative costs, assuming Medicare’s paperwork burden would stay the same despite its patient pool changing; slashed marketing costs, assuming public health organizations don't advertise; fewer ER visits, assuming treatment cost depends on which door you use into the hospital.

The industry is riddled with waste, just not in pockets big enough to spot from Capitol Hill and fix with laws. It must be found with a magnifying glass and extracted with tweezers.

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