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In reply to the discussion: The Urban Institute's Attack On Single Payer: Ridiculous Assumptions Yield Ridiculous Estimates [View all]ehrnst
(32,640 posts)74. OMG, a liberal think tank decided to take a closer look at the actual numbers.
And they had the NERVE to reply to the outrage over that.. WHAT SHILLS!!!
The Sanders campaign and David Himmelstein and Steffie Woolhandler reacted with sharp criticisms to our recent report, The Sanders Single-Payer Health Care Plan: The Effect on National Health Expenditures and Federal and Private Spending (Holahan et al. 2016). The campaign argues that we understated reductions in the cost of prescription drugs, understated administrative cost savings, and ignored the availability of state and local funds to finance the plan. Himmelstein and Woolhandler (hereinafter referred to as HW) argue that our ridiculous assumptions yield ridiculous estimates; specifically, they argue that we overstated administrative costs, ignored administrative cost savings for providers, understated reductions in drug spending, and overstated utilization increases.1
Our analysis was based on detailed modeling of acute care for the nonelderly, acute care for the elderly, and long-term care services and supports. It is impossible to wholly impose a new health care system in the United States that changes the way all residents receive and finance their health care, even one that may be successful in another country, without disrupting many existing institutions, such as insurance companies, integrated health systems, hospitals, physicians, and pharmaceutical manufacturers. To be politically acceptable, compromises would have to be made, and those compromises are reflected in our assumptions.
In this brief, we discuss our key assumptions in these areas of disagreement and highlight ways in which we may have actually underestimated overall costs of the Sanders proposal. By and large our assumptions are laid out thoroughly in the original paper, but here we use them to address the specific statements made by the campaign and HW, and we provide additional reliable evidence to counter some of HWs claims.
The increases in federal spending that we estimated ($32 trillion between 2017 and 2026) are so large because all current public and private spending would be transferred to the federal government, benefits would be expanded, and out-of-pocket costs to consumers would be eliminated.
Payment rates would have to be acceptable to providers. We assume a substantial reduction from current rates paid by private insurers and some increases over current rates paid by public programs. For example, the program would pay 25 percent less than current Medicare levels for prescription drugs, and physicians would be paid at Medicare rates. Both of these are increases relative to current Medicaid payment rates.
Utilization of health care services will increase if benefits are expanded and cost sharing is eliminated. Our estimates include modest increases in the use of services based on actuarial standards and the health economics literature. Contrary to HWs claim in their article, health care use and spending for the elderly population did increase substantially once the Medicare program was implemented in 1965.
We assume administrative costs of 6 percent. A new system would have a host of important administrative functions necessary to effective operations, such as rate setting for many different providers of different types; quality control over care provision; development, review, and revision of regulations; provider oversight and enforcement of standards; bill payment to providers; and other functions. We base our administrative cost estimates on Medicares costs to administer the entire Medicare program. But even if we have modestly overestimated the appropriate administrative load, the difference in costs for the federal government would be only about 1 percent of total added federal spending per percentage-point reduction, a tiny fraction of the additional $32 trillion in federal funding that we estimate would be needed to fully finance the Sanders health plan.
We provide estimates of current state and local spending on health care through the Medicaid program and on payments for uncompensated care. Requiring state governments to give the amount they currently spend on Medicaid to the federal government to help finance the single-payer system is of very uncertain legality given the Supreme Courts ruling in National Federation of Independent Business v. Sebelius.
We may have underestimated the costs of the Sanders plan in several important areas. These were described in the original paper and are summarized below.
Our analysis was based on detailed modeling of acute care for the nonelderly, acute care for the elderly, and long-term care services and supports. It is impossible to wholly impose a new health care system in the United States that changes the way all residents receive and finance their health care, even one that may be successful in another country, without disrupting many existing institutions, such as insurance companies, integrated health systems, hospitals, physicians, and pharmaceutical manufacturers. To be politically acceptable, compromises would have to be made, and those compromises are reflected in our assumptions.
In this brief, we discuss our key assumptions in these areas of disagreement and highlight ways in which we may have actually underestimated overall costs of the Sanders proposal. By and large our assumptions are laid out thoroughly in the original paper, but here we use them to address the specific statements made by the campaign and HW, and we provide additional reliable evidence to counter some of HWs claims.
The increases in federal spending that we estimated ($32 trillion between 2017 and 2026) are so large because all current public and private spending would be transferred to the federal government, benefits would be expanded, and out-of-pocket costs to consumers would be eliminated.
Payment rates would have to be acceptable to providers. We assume a substantial reduction from current rates paid by private insurers and some increases over current rates paid by public programs. For example, the program would pay 25 percent less than current Medicare levels for prescription drugs, and physicians would be paid at Medicare rates. Both of these are increases relative to current Medicaid payment rates.
Utilization of health care services will increase if benefits are expanded and cost sharing is eliminated. Our estimates include modest increases in the use of services based on actuarial standards and the health economics literature. Contrary to HWs claim in their article, health care use and spending for the elderly population did increase substantially once the Medicare program was implemented in 1965.
We assume administrative costs of 6 percent. A new system would have a host of important administrative functions necessary to effective operations, such as rate setting for many different providers of different types; quality control over care provision; development, review, and revision of regulations; provider oversight and enforcement of standards; bill payment to providers; and other functions. We base our administrative cost estimates on Medicares costs to administer the entire Medicare program. But even if we have modestly overestimated the appropriate administrative load, the difference in costs for the federal government would be only about 1 percent of total added federal spending per percentage-point reduction, a tiny fraction of the additional $32 trillion in federal funding that we estimate would be needed to fully finance the Sanders health plan.
We provide estimates of current state and local spending on health care through the Medicaid program and on payments for uncompensated care. Requiring state governments to give the amount they currently spend on Medicaid to the federal government to help finance the single-payer system is of very uncertain legality given the Supreme Courts ruling in National Federation of Independent Business v. Sebelius.
We may have underestimated the costs of the Sanders plan in several important areas. These were described in the original paper and are summarized below.
https://www.urban.org/research/publication/response-criticisms-our-analysis-sanders-health-care-reform-plan
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The Urban Institute's Attack On Single Payer: Ridiculous Assumptions Yield Ridiculous Estimates [View all]
melman
Sep 2017
OP
That says "industry funders are Cigna and Pfizer", it doesn't say how much. Plus...
George II
Sep 2017
#46
At least yours is reasonably current, not six years old, and has no mention of Cigna or Pfizer...
George II
Sep 2017
#87
Wait...Keynsian ecomomics is now a hall-mark of "the conservative wing of the Democratic party?"
Expecting Rain
Sep 2017
#61
How did you do that? I typed out the breakdown of their funding below (sans last two, got tired!!!)
George II
Sep 2017
#36
If the information being provided is inaccurate, it would sound that way. But...
George II
Sep 2017
#59
But if a corporation touches anything, it becomes impure! Unless it has been blessed of course
Ninsianna
Sep 2017
#113
Your link provides no evidence of significant funding. No dollar amounts, and no corporate donors
pnwmom
Sep 2017
#68
It doesn't sound like Himmelstein is just picking numbers to fit his preference.
dgauss
Sep 2017
#13
The ACA is a renamed "Romney care" that the GOP called Obamacare to play to the racism
guillaumeb
Sep 2017
#45
No, the ACA is the ACA, nicknamed "Obamacare". Has nothing to do with Romneycare except...
George II
Sep 2017
#47
Most countries do it with multi-payer system, some of which use private insurance companies to
ehrnst
Sep 2017
#97
Obama also said that it would not be wise to go directly to Single Payer from our current system
ehrnst
Sep 2017
#98
He did. He also pushed for a public option, which a couple Senators killed.
Warren DeMontague
Sep 2017
#102
I guess that he didn't actually think it was the "only moral, fiscal" solution.
ehrnst
Sep 2017
#104
it's a "rabbit hole" to point out that the ACA has its origins in a Heritage Foundation proposal?
Warren DeMontague
Sep 2017
#89
Do you folks forget that between Reagan and Bush (not sure which, probably the first) were...
George II
Sep 2017
#65
I really don't. It connected the ACA with Presidents Reagan and Bush, which occurred almost....
George II
Sep 2017
#72
When people go see the doctor for checkups and get regular dental care
Warren DeMontague
Sep 2017
#52
And someone who doesn't understand that when you pay for something with cash
Warren DeMontague
Sep 2017
#88
And a Single Payer System isn't going to magically create more health care spending.
Warren DeMontague
Sep 2017
#91
"People do worry about their health and they will use more care if it is free"
Warren DeMontague
Sep 2017
#96
Actually, the increase in the number of people using health care is a cost issue in implementation
ehrnst
Sep 2017
#108