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Economists who understand single payer, but…

September 13, 2019

Topics: Quote of the Day

By Ezekiel J. Emanuel and Victor R. Fuchs
The New York Times, September 12, 2019

Fallacy No. 2: Medicare for All is unaffordable.

The key to evaluating the cost of Medicare for All is to distinguish between increasing spending on health care and shifting expenditures from private insurance to the federal government.

True, Medicare for All would increase federal health care spending. But that is not the same as increasing total health care spending, which was over $3.5 trillion last year. Instead, Medicare for All would move money from one column (private health insurance spending) to another (federal health spending); it does not automatically increase total costs.

A recent study by the Mercatus Center at George Mason University — a free-market center generally hostile to government programs — estimates that for the 10 years between 2022 and 2031 the total national health costs for Senator Bernie Sanders’s Medicare for All plan would actually be $50.1 trillion. That would be $2 trillion less than if we let the system operate as it currently does. However, Mercatus researchers doubt that the Sanders’s plan would ultimately save trillions because they believe Congress would have to increase Medicare rates paid to hospitals and physicians to get the legislation enacted. They may be right — or wrong. But that is a different argument — a prediction about the politics of enacting laws — than that Medicare for All would inherently increase total health care spending.

We have our doubts about Medicare for All. But unaffordability is not a reason to oppose it. Whether it’s our current arrangement or a future Medicare for All, the per capita cost of our health care system already far exceeds that of any other industrialized country — including those with single-payer systems. When you hear a health care price tag in the trillions, know that the existing system has already brought us there.

Ezekiel J. Emanuel is an oncologist and a vice provost at the University of Pennsylvania. Victor R. Fuchs is an emeritus professor of economics at Stanford University and former president of the American Economics Association.


The New England Journal of Medicine, March 24, 2005, “Health Care Vouchers — A Proposal for Universal Coverage” by Ezekiel J. Emanuel, M.D., Ph.D., and Victor R. Fuchs, Ph.D.

The best health care reform is already in place

By Laurence Kotlikoff
The Hill, September 8, 2019

As with the previous Democratic debates, this week’s debate in Houston will likely start with our country’s forever question: How can we provide health insurance to all without bankrupting the country?

The Republican Party’s answer is to define basic health insurance as no health insurance. The party yearns for, and is suing in the courts, to restore the halcyon pre-ObamaCare days when 50 million Americans were uninsured and insurance companies could deny coverage at will.

This stance isn’t going to fly with the Party’s rank and file, whose own future health care and that of friends and relatives is at stake. But, hey, political self-immolation seems all the rage.

Vision two is Senator Sanders’ traditional Medicare (Parts A, B, and D) for All. Actually, it’s a far more generous version than traditional Medicare, which features co-pays, co-insurance, limits on catastrophic coverage and significant monthly premiums. As a result, millions of participants are forced to purchase Medigap coverage. Under BernieCare, there are no co-pays (except for prescription drugs) and no limits on coverage. Bernie care includes lab work, maternity, vision and dental care, and long-term care for the disabled.

Employers would, to their joy, be banned from the health care business. But their workers will be able to keep their doctors and use the same hospitals, who will simply send their bills to Medicare. Indeed, setting aside requisite tax hikes, BernieCare is far more generous than most employer-provided plans.

BernieCare, which Senator Elizabeth Warren (D-Mass.) and several other Democratic presidential candidates endorse, works great in theory. And it may in practice. The biggest bottom line is the share of GDP spent on health care. Other developed countries are delivering excellent universal health care at well south of 14 percent of GDP. We’re at 18 percent of GDP and growing. And they are all doing it with a healthy dose of central government control.

If it’s a choice between our current system and BernieCare, I’d go with BernieCare in a heartbeat. Yes, there are lots of concerns — people overusing the system, costs that far exceed the senator’s estimates, government price control over what is a fifth of the economy, doctors opting out of medicine because of limits on their reimbursements and long waiting lines.

But 14 percent of U.S. GDP can surely buy a truly first-class health care system for all. Also bear in mind that medicine in our country is already largely government run but done so with maximum inefficiency, leaving 30 million uninsured and far more underinsured.

BernieCare surely beats “Don’tCare” — the Trump-McConnell answer. But is there another reform that makes more sense?

Yes. “Medicare Part C for All.” This is the brain child of John Goodman, the father of Health Saving Accounts. I pushed for this solution in The Healthcare Fix. Goodman recently discussed the plan in the Wall Street Journal.

Medicare Part C is also called the Advantage Plan. Some 22 million Medicare participants – one in three – have opted for Medicare Advantage over traditional Medicare.

Laurence Kotlikoff is a professor of economics at Boston University (BU), a fellow of the American Academy of Arts and Sciences, a research associate of the National Bureau of Economic Research, and a fellow of the Econometric Society. He served on President Ronald Reagan’s Council of Economic Advisers.


The MIT Press, September 2007, “The Healthcare Fix” by Laurence J. Kotlikoff (proposes vouchers for health insurance)


By Don McCanne, M.D.

It has been fascinating to observe the insights on single payer Medicare for all of some of the nation’s more prominent economists who have not already been in the single payer camp. They seem to understand the clear benefits of the model, and yet they regress to supporting their own preferred but lesser models of reform, very often a model using variations of subsidized vouchers for purchase of private plans, as the authors of today’s excerpts support.

Even the Affordable Care Act was based partly on the voucher concept with the establishment of the ACA insurance exchanges. There is currently a push to use vouchers (“premium support”) to expand coverage through private Medicare Advantage plans. If we ever do approach having truly universal coverage, it will likely be the results of the contest between Medicare Advantage vouchers and a single payer model of an improved Medicare for all. A recent Quote of the Day discussed why this Medicare Advantage for All model is such a terrible idea.

Yes, it has been fascinating to see the insights of so many economists on the single payer model, yet it has been terribly frustrating to see that many if them continue to reject this obviously superior model.

Some years ago at Stanford University I was on a panel with Victor Fuchs in which he presented his voucher proposal and I presented the single payer approach. After the session was over, he approached me and asked me if I would like to work with him and Ezekiel Emanuel on their voucher model. I asked him if he would like to work with us on the single payer model. We both laughed, but, sadly, the impasse is not at all funny.

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About the Commentator, Don McCanne

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Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.

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