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Urban Institute analysis, and new report on change in utilization

October 17, 2019

Topics: Quote of the Day

By David U. Himmelstein, M.D., and Steffie Woolhandler, M.D., M.P.H.


The following comments are from a release by PNHP President Adam Gaffney:

“A broad-based movement is demanding improved Medicare for All, and critics have lined up to take shots at single-payer reform. These include the usual suspects, such as the Koch-funded Mercatus Center and the industry-backed Partnership for America’s Health Care Future, but it also includes entities such as the Urban Institute, which released a deeply flawed analysis of various health proposals earlier this week.

“The Urban Institute found that a policy they call ‘single-payer enhanced,’ which does not strictly correspond to the Medicare for All Act of 2019 (House or Senate) or to our Physicians’ Proposal for Single-Payer Reform, would increase total national health spending by some $720 billion a year. This is wildly out of line with even the Mercatus Center study, which predicted a drop in total national health spending under Medicare for All.

“PNHP co-founders Drs. David Himmelstein and Steffie Woolhandler responded to the Urban Institute study by highlighting three of its most glaring false assumptions. The first is that Medicare for All would require 6% overhead to operate when the traditional Medicare program (and Canada’s Medicare program) operate at roughly 2% overhead. The second is that hospitals would realize little to no administrative savings under single payer. And the third is that utilization of health care services would skyrocket far beyond our nation’s capacity to deliver such services.

“And while it is a common refrain among single-payer opponents that universal coverage without financial barriers to care would strain the system, history tells another story. Research published earlier this year in the Annals of Internal Medicine found that the overall volume of hospital care remained consistent before and after large coverage expansions such as Medicare, Medicaid, and the Affordable Care Act. Previously uninsured patients received more care, and doctors reduced the amount of unnecessary care delivered to wealthier patients. Another study, published today in the American Journal of Public Health, found that the total number of doctor visits did not increase due to large coverage expansions either, although visits were redirected towards those who needed them.

“The Urban Institute analysis has already generated national media attention, and it is imperative that we push back against its faulty findings. I encourage you to post to social media, write letters to the editor of your local paper, and discuss among your colleagues and in your medical societies. We need to highlight the considerable benefits of Medicare for All — guaranteed coverage, comprehensive benefits, administrative simplicity — and speak out against the fearmongering and falsehoods that have infected our national debate.”

Coverage Expansions and Utilization of Physician Care: Evidence From the 2014 Affordable Care Act and 1966 Medicare/Medicaid Expansions

By Adam Gaffney MD, Danny McCormick MD, David Bor MD, Steffie Woolhandler MD, and David Himmelstein MD
American Journal of Public Health, October 17, 2019


Objectives. To evaluate the effects of the 2 major coverage expansions in US history—Medicare/Medicaid in 1966 and the Affordable Care Act (ACA) in 2014—on the utilization of physician care.

Methods. Using the National Health Interview Survey (1963–1969; 2011–2016), we analyzed trends in utilization of physician services society-wide and by targeted subgroups.

Results. Following Medicare/Medicaid’s implementation, society-wide utilization remained unchanged. While visits by low-income persons increased 6.2% (P < .01) and surgical procedures among the elderly increased 14.7% (P < .01), decreases among nontargeted groups offset these increases. After the ACA, society-wide utilization again remained unchanged. Increased utilization among targeted low-income groups (e.g., a 3.5-percentage-point increase in the proportion of persons earning less than or equal to 138% of the federal poverty level with at least 1 office visit [P < .001]) was offset by small, nonsignificant reductions among the nontargeted population.

Conclusions. Past coverage expansions in the United States have redistributed physician care, but have not increased society-wide utilization in the short term, possibly because of the limited supply of physicians.

Public Health Implications. These findings suggest that future expansions may not cause unaffordable surges in utilization.



By Don McCanne, M.D.

The Urban Institute’s prediction of skyrocketing costs under “single payer enhanced” is wrong because they failed to take into consideration the profound savings from recovery of administrative waste, and they failed to acknowledge that the redistribution of health care that takes place under coverage expansions actually improves utilization rather than significantly increasing spending.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

About the Commentator, Don McCanne

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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