how will universal health care reduce medical costs

A key factor driving the slight reduction in savings compared to 2017 is the increase in the number of Americans who are underinsured from 41 million (63) to 45 million (13). performed research; A.P.G. HHS Vulnerability Disclosure, Help The math produces an inescapable conclusion. Using the same methods detailed in Quantifying lives that could be saved by universal healthcare in nonpandemic conditions for age-specific elevations in mortality among the uninsured, we estimated the mortality impact specifically among those who experienced pandemic-driven job loss. An official website of the United States government. We combined the age distribution of 11,832,077 [95% uncertainty interval (UI): (10,586,595, 13,077,559)] estimated hospitalizations through 12 March 2022 (68, 69) (SI Appendix), age-specific insurance coverage by type, and age-specific probability of ventilation given hospitalization to estimate the proportion of hospitalizations in each age group that were reimbursed at each different cost level (SI Appendix, Table S5). Anderson K. E., McGinty E. E., Presskreischer R., Barry C. L., Reports of forgone medical care among US adults during the initial phase of the COVID-19 pandemic, Risk factors associated with delay in diagnosis and mortality in patients with COVID-19 in the city of Rio de Janeiro, Brazil. Mitchell J., Covid-19 surge ends seven months of U.S. jobs growth. Incorporating both the widening and then contracting insurance gap, we estimated 2,784 lives lost over the course of the year. Conversely, job loss may be associated with the loss of insurance for an entire family, potentially resulting in separate enrollments into Medicaid or CHIP for each family member. Patrick signs health care bill. Dartmouth Atlas of Health Care. Although hospital fees nationwide would be reduced by Medicare for All, applying Medicare rates across the board would actually increase support to those rural hospitals which currently serve substantial populations of Medicaid and uninsured patients (53). FOIA Electronic health records limited successes suggest more targeted uses. Each insurance company develops its own programs for utilization management, prior authorizations, and evidence-based drug formularies to compel the use of that plans preferred vendors and pharmaceuticals, consuming resources but adding little proven value to health outcomes. COVID-19 Cases and Deaths, Metropolitan and Nonmetropolitan Counties Over Time (Update). Kaiser Family Foundation, 2020 Employer Health Benefits SurveySummary of findings (2020). The impact of cost-sharing on health care prices, quantities, and spending dynamics, Report to the Congress: Medicare Payment Policy. 2 That administrative excess currently amounts to. prices for identical products or services in the U.S. tend to be, on average, twice or more than the prices of the same products and services paid in other countries. Increasingly, these costs are being borne by patients and government, driving personal bankruptcies and ever more austere public policies [3, 4]. Ayanian J. Per patient, private insurance overhead exceeds that of Medicare, Medicaid, and the VA combined. The average expenditure incurred by patients in low- and middle-income countries (LMICs) for the diagnosis and treatment of TB ranges from US$ 55 to US$ 8198. Although pharmacy benefit managers work within the boundaries of medical evidence, they also consider the prices they have negotiated and the local drug market shares on their formulary selections. Streamlined administration, negotiated pharmaceutical prices, and application of the Medicare fee schedule throughout the healthcare system are major reforms that would achieve substantial reductions in national medical costs (SI Appendix). Yet a child's chance of survival is still dependent on where they are born: worldwide, 15,000 children under five still die every day. wrote the paper. The Coronavirus Aid, Relief, and Economic Security (CARES) Act subsidizes all testing and medical bills for the uninsured with COVID-19. To determine the changes in coverage by insurance type over the course of 2020, we combined data on monthly Medicaid/Childrens Health Insurance Program (CHIP) enrollment (15), monthly employment (16, 17), and employer-sponsored health insurance plan participation rates (18), as well as insurance exchange enrollment during both the standard (19) and special enrollment periods (20). At the moment, only a handful of states have fully committed to implementing exchanges [6]. Removing financial obstacles to care can accelerate diagnosis. National Library of Medicine We spend more but use less of most services [21] than other member nations of the Organization for Economic Cooperation and Development. A statewide healthcare program that diverted all the money we currently spend on insurance premiums and out-of-pocket payments into a single agency that paid for comprehensive healthcare for everyone would cost less than we spend now. Furthermore, CARES Act provides financial assistance for only one disease. We can too., Pricing Universal Health Care: How Much Would The Use Of Medical Care Rise? by Adam Gaffney, M.D., M.P.H., David U. Himmelstein, M.D., Steffie Woolhandler, M.D., M.P.H., and James G. Kahn, M.D., M.P.H. The medical evidence behind the formulary selections is the same in Florida and Alaska, yet the drug lists are sometimes as different as the geography. Using 2019 estimates for age-specific coverage and updating with 2020 population growth (27), we estimated that there were 77,675 excess deaths and 2,099,133 excess years of life lost in 2020 due to lack of insurance without including repercussions from the pandemic (which we calculate below in Quantifying lives that could have been saved by universal healthcare during the COVID-19 pandemic). About $300 billion ($3.3 billion in Oregon). Divorcing capital from operating budgets eliminates the ongoing pressure to reap future capital growth by limiting reimbursement to clinicians. Since ratification of the CARES Act, the Federal Government has been reimbursing hospitals for the care of uninsured COVID-19 patients at Medicare rates. We need to be able to select our own physicians, but the complexities of selecting an insurance company distract us from genuinely beneficial health care activities. Steffie Woolhandler, M.D., M.P.H., City University of New York Hunter College and Harvard Medical School, swoolhan@hunter.cuny.edu Since Medicare for All would achieve savings overall, the tax revenue needed to fund Medicare for All would be significantly lower than the healthcare premiums that are currently paid by employers and households. Medical bankruptcy in the United States, 2007: results of a national study. Implementing a Universal Healthcare System Costs Less, Provides Better Care The U.S. spends more money on administrative costs than anywhere in the world, according to a recent article in Health Affairs By Samuel Metz, M.D. Accessed October 3, 2012. Why the U.S. Needs Universal Health Care - US News Health Among survivors of COVID-19, there can be substantial and often long-term morbidity (73). The role of health care coverage . Consequently, our estimates are conservative with regard to the life-saving benefits of comprehensive universal healthcare that eliminates all costs to the patient. The ACA has begun the process of much needed change. For instance The AVERAGE l. Coordinating and optimizing information-sharing. A 2010 report by the National Academy of Medicine (NAM) estimated that the United States spends about twice as much as necessary on BIR costs. From HMOs to ACOs: the quest for the holy grail in U.S. health policy. In 2020, 377,883 deaths from COVID-19 were recorded (32), implying 497,870 actual deaths, of which 131,438 could have been averted if the United States had universal healthcare. It covers the full continuum of essential health services, from health promotion to prevention, treatment, rehabilitation and palliative care. In March 2020, employment dipped slightly, followed by a steep drop in April, precipitating a loss of 14.5 million employer-sponsored insurance enrollments compared to December 2019 (Fig. The American Rescue Plan of 2021 included subsidies to cover COBRA premiums for individuals who lost employment during the pandemic. Accessed August 7, 2012. Kaiser Family Foundation, Comparing private payer and Medicare payment rates for select inpatient hospital services (2020). Streamlined billing under single payer would save physicians vast amounts in overhead [19]. Its been said that when you are trapped in a hole, the first rule is to stop digging. In 2020, many of these companies made multibillion-dollar second quarter profits, double the amount for the previous nonpandemic year (72). How Well Does Health Coverage Protect Consumers from Costs? If Oregon diverted all the money we currently spend to restrict access and limit benefits and instead invested directly in healthcare, we could provide comprehensive care to everyone and save ourselves $1.7 billion. Health care is a major issue in American politics, with important. Organisation for Economic Co-operation. Would "Medicare for All" Really Reduce Healthcare Costs in the U.S.? Woolhandler S, Campbell T, Himmelstein DU. Under a single-payer system, regional planning of resource allocation would be aligned with public health needs rather than duplicating services and driving up medically questionable utilization. Covid-19: Medical expenses leave many Americans deep in debt, Effectiveness of severe acute respiratory syndrome Coronavirus 2 monoclonal antibody infusions in high-risk outpatients. Short-term and long-term rates of postacute sequelae of SARS-CoV-2 infection: A systematic review, Count the cost of disability caused by COVID-19. So, where do states stand on the Medicaid expansion? Excess Administrative Costs Burden the U.S. Health Care System Increased Medicaid enrollments in 2020 may be a response to unemployment, the result of ongoing Medicaid expansion efforts (21), or due to individual perception of elevated risk during the pandemic. Medicaid.gov, Monthly Medicaid & CHIP application, eligibility determination, and enrollment reports & data. http://www.pnhp.org/facts/medical_liability_in_three_singlepayer_countries.php. We quantify the financial benefits and lives saved if the United States had provided universal healthcare coverage to all individuals during the COVID-19 pandemic. Insurance enrollment, excess deaths, and years of life lost during the pandemic year 2020: (A) Monthly estimated enrollment in employer-sponsored insurance (green) and reported enrollment in Medicaid/CHIP (orange). Findings from the Commonwealth Fund Biennial Health Insurance Survey, 2016. Improving the Prognosis of Healthcare in the United States Himmelstein D, Thorne D, Warren E, Woolhandler S. Woolhandler S, Himmelstein DU, Angell M, Young QD. [, Projecting hospital utilization during the COVID-19 outbreaks in the United States. Are the most vulnerable people covered? Reducing the time to diagnosis also ensures more prompt isolation, which in turn reduces transmission to others. The Lund Report (Portland, Ore.), Nov. 11, 2014 These savings would alleviate the burden on employers and individuals to cover insurance premiums, copays, and deductibles. These savings would alleviate the burden on employers and individuals to cover . We also calculated that US$105.6 billion of medical expenses associated with COVID-19 hospitalization could have been averted by a single-payer universal healthcare system over the course of the pandemic. . How much would the US spend if we simply provided comprehensive care to everyone? We previously calculated that enacting universal healthcare would have saved over 68,000 lives in 2017 (3). For example, recommendation of COVID-19 vaccination to patients by their trusted primary care providers is effective in overcoming vaccine hesitancy (59, 60). Supply-sensitive care. So. The expense of this redundancy is considered overhead and passed along to the consumer. ; COMET-ICE Investigators, Early treatment for Covid-19 with SARS-CoV-2 neutralizing antibody sotrovimab. Universal Healthcare Pros and Cons Taking into account shifts in demography, healthcare utilization, and coverage composition, we updated our previous analysis and found that single-payer universal healthcare would have saved $438 billion in 2019. When operating and capital payments are combined, as they currently are, prosperous hospitals can expand and modernize while impoverished ones cannot [9], threatening the viability of safety-net institutions that serve vulnerable populations. Due to governmental authority to negotiate drug prices for the VA, it pays roughly half of the retail price of drugs [24]. On average, each employer-sponsored enrollment covers more than one individual. Health insurance and mortality in US adults. Only a single-payer system enables the kind of bulk purchasing of drugs and medical devices that would give the buyer power. From the combination of pandemic-related and background uninsurance, we calculate 80,459 excess deaths and 2,214,033 y of life lost in 2020. While stay-at-home orders and temporary closures of nonessential businesses curbed the immediate spread of COVID-19 and prevented catastrophic demands on hospital capacity (14), the measures also led to spikes in unemployment. * Health care is independent of employment status. Accessed October 3, 2012. More broadly, UHC covers social systems that provide medical and nonmedical services and infrastructure that are vital to promoting public health. The rest of the modern world has run the laboratory studies for us; now is the time for us to adopt this well proven solution. The Medicare for All Act proposed by Senator Sanders specifies a single-payer plan to offer health care without health insurance premiums, deductibles, or out-of-pocket expenses. Without correcting the fundamental structural flaws in health care financing, overall health care costs will remain poorly controlled. For example, one strategy may be to lower, or constrain the growth of, health care prices. However, the authors of the Health Affairs study note that after society-wide reforms, all care must still be provided using the same supply of doctors, nurses, and hospital beds, a supply that is mostly fixed, at least in the short run. Imagine instead how much of their budgets these life-saving community services would be obliged to devote to marketing to and negotiating with each household and the rampant disparities in service that would result. To facilitate recovery from the ongoing crisis and bolster pandemic preparedness, as well as safeguard well-being and prosperity more broadly, now is the time to transition to a healthcare system that can better serve the American people. Not all disparities in COVID-19 mortality could have been alleviated by adoption of a single-payer universal healthcare system. In the 6 years since Massachusetts adopted legislation very similar to the ACA, the cost of health care has continued to drive patients into financial ruin [7]. The cost of treatment for these symptoms is substantial (74). Are countries succeeding in implementing? government site. To update this analysis to the most recent nonpandemic year, we took into account the proportion of uninsured in each age class for 2019, the size of every age class, age-specific life expectancy, and the elevation in mortality associated with lacking insurance (26). Accessed October 10, 2012. . Reduced hospitalization rates facilitated by Medicare for All would have blunted these COVID-19 peaks and thereby freed capacity for non-COVID care. Financial barriers reduce and delay care for COVID-19. Accessed August 8, 2012. Universal healthcare could have alleviated the mortality caused by a confluence of negative COVID-related factors. We estimated that 40,963,120 Americans were uninsured in 2019 (SI Appendix, Table S1). Accessed October 2, 2012. Garcia K., Thompson K., Howard H., Pink G., Geographic variation in uncompensated care between rural and urban hospitals (Rural Health Research Gateway, 2018). A key driver of these disparities is inequitable access to primary care (57, 58). Consistent with our evaluation, April was the most common month for insurance loss in 2020, contrasting with nonpandemic years (22, 23). 4. New York Times: Economix. Use bulk purchasing to negotiate lower costs. Predicting financial distress and closure in rural hospitals, The effect of Medicare for All on rural hospitalsAuthors reply, Potential implications of SARS-CoV-2 delta variant surges for rural areas and hospitals, Racial disparities in COVID-19 mortality across Michigan, United States, COVID-19 vaccination coverage among insured persons aged 16 years, by race/ethnicity and other selected characteristicsEight Integrated Health Care Organizations, United States, December 14, 2020-May 15, 2021. This substantial deceleration in spending can be attributed to the decline in pandemic-related government expenditures offsetting increased utilization of medical goods and . All study data are included in the article and/or SI Appendix. The fragmented and inefficient healthcare system in the United States leads to many preventable deaths and unnecessary costs every year. (Peterson-KFF Health System Tracker, 2022). Universal single-payer healthcare is fundamental to pandemic preparedness. There were fewer total insurance enrollments from March through September 2020 compared to December 2019, but increasing Medicaid/CHIP enrollment boosted total insurance enrollment to 3.5 million above that baseline by December 2020 (Fig. Its obvious that the barriers to healthcare cost more than providing healthcare. At the individual level, concerns over medical expenses delay diagnosis and treatment (9), elevating case fatality rates (10). Demographic shifts and the expanding insurance gap combined to increase the annual lives that could have been saved by the provision of universal healthcare compared to our previous analysis (3), even in the absence of COVID-19. Centers for Medicare & Medicaid Services, 2021 marketplace Special Enrollment Period report. If the U.S. had had a single-payer universal health care system in 2020, nearly 212,000 American lives would have been saved that year, according to a new study. JAMA Health Forum - Health Policy, Health Care Reform, Health Affairs So insurance companies spend a lot of money to avoid populations that include sick people, to shift costs to patients, to limit benefits, and to exclude physicians who care for patients with expensive diseases (e.g., AIDS, cancer). Applying national planning to regional budgeting would right-size capacity. This self-stimulating relationship is dependent upon market opportunities, often not the same as public health priorities. Introduction. Health Care for All: A Framework for Moving to a Primary Care - AAFP ISSN 2376-6980, A Single-Payer System Would Reduce U.S. Health Care Costs. Kaiser Family Foundation. While essential to relieve household financial strain due to prolonged reliance on COBRA, an estimated $57 billion in subsidies will ultimately flow to insurers (71). The experience of previous coverage expansions seems paradoxical: while insurance coverage soars, overall health care use rises only modestly, noted lead author Dr. Adam Gaffney, a pulmonary and critical care physician at Harvard Medical School and the Cambridge Health Alliance. By Laura Kurtzman A single-payer healthcare system would save money over time, likely even during the first year of operation, according to nearly two dozen analyses of national and statewide single payer proposals made over the past 30 years. They attribute much of this variation to supply-sensitive care, that is, care determined by resources and capacity rather than by medical need, and conclude that supply-sensitive care accounts for more than half of all Medicare spending [11], some of which is of no medical value and a waste of resources. Himmelstein DU, Thorne D, Woolhandler S. Medical bankruptcy in Massachusetts: has health reform made a difference? Further, long COVID may affect the ability to work, potentially reducing income or leading to insurance loss (75). Diabetes has similarly been associated with significantly increased COVID-19 severity and mortality (38). March 13, 2012. At the population level, postponement of diagnosis, and thus of case isolation, fuels transmission. Furthermore, clinical outcomes such as mortality have been elevated among rural communities during the COVID-19 pandemic (49). Because every healthcare system in the world that implements universal care without limiting benefits ultimately provides better care to more people for less money. Concurrently, deaths beyond COVID-19 accrued from the background rate of uninsurance. We calculated that the expense of COVID-19 hospitalization has totaled $365.8 [95% UI: (327.3, 404.3)] billion, of which $141.2 [95% UI: (126.3, 156.1)] billion occurred in 2020. A Price Waterhouse Coopers study reported that our complex, fragmented health care delivery system wastes $210 billion per year on unnecessary billing and administrative costs. We thank Saul Bezner for compiling employment data. We also evaluated the deaths and years of life lost that are attributable to uninsurance for 2020, based on demographic trends, for the counterfactual scenario where the COVID-19 pandemic did not occur (SI Appendix, Table S1). CONTACT: Physicians for a National Health Program. Mykyta L., Keisler M. K., Transitions in health insurance coverage: A look inside annual health coverage statistics (US Census Bureau, 2021). Emergence of virulent pathogens is becoming more frequent, driven by climate change and other global forces (76). The viewpoints expressed in this article are those of the author(s) and do not necessarily reflect the views and policies of the AMA. 1 Compounding this crisis, over 70 congressional . For most Americans, the glory days of Cadillac health plans are over, if they ever existed. It is probably less than most people believe, but it is not an insignificant amount. The Affordable Care Act (ACA) is introducing insurance reforms that will improve the lives of millions of Americans, but we need to go much further to solve the crisis in health care. Given the currently dominant role of insurers in our health care, the exchanges are a step forward. In addition to reduced billing expenses, physicians would also enjoy a meaningful drop in their malpractice premiums. Despite spending more on healthcare than any other country, both overall (1) and on a per capita basis (2), the United States does not provide universal healthcare, resulting in preventable deaths and excessive costs (3). Legions of staff manage independent computer systems. (The actuarial value of a plan is the percentage of a patients predictable costs within the covered list of services that would generally be paid by the insurance company.) Answer: Would a universal healthcare system help decrease costs for medical care later in life when old enough to qualify for Medicare? http://www.kff.org/medicare/upload/7731-03.pdf. Inclusion in an NLM database does not imply endorsement of, or agreement with, Cost-containment efforts today are focused on the back end of delivery, placing economic pressures on individual physicians and patients who cannot realistically be expected to pursue systemwide solutions [12]. Insurance companies have balked at the ACAs requiring them to spend at least 80-85 percent of their revenue on delivery of health care. (D) Years of life lost in each month between March and August 2020 due to pandemic-driven insurance loss. Scholarly Articles on Universal Health Care: History & More - Gale Combined, the savings from these mechanisms more than compensate for the expanded utilization when coverage is extended to the entire population (SI Appendix). A recent careful analysis found that this model is effective and does not lead to a loss in physician income [25]. Consequently, it is unsurprising that individuals without access to a primary care provider have lower rates of vaccine uptake despite it being free to the public. The observed relationship between healthcare coverage and COVID-19 mortality is attributable to multiple factors, as detailed below. Epub. Our calculations indicate that 76,064 lives would have been saved by universal healthcare among individuals of all ages in 2019 (SI Appendix). Accessed October 3, 2012. With health insurance, however, we all need the same thing: affordable access to high-quality health care. Careers, Unable to load your collection due to an error. During a pandemic, the lives saved and economic benefits of a single-payer universal healthcare system relative to the status quo would be even greater.

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