Getting real about single payer

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Getting Real About Single Payer: The Economic Argument for the Long Term Walter Tsou, MD, MPH Health Care for All Pennsylvania (www.healthcare4allpa.org) February 7, 2015

Healthcare

Pennsylvania in a Pickle
• $2+ billion dollar deficit
• Revenue from shale gas much less than predicted
• Huge pension obligation
• Restore $1 billion of public education funding?
• Republican legislature tax adverse
• Cut spending? But where?

What would you cut to get $3 billion?
Zogby, 2014-15 Mid Year Budget Briefing, Dec. 3, 2014

What is the biggest ignored
waste of taxpayer funds?

US spends more per capita
OECD Health Data, Kaiser Family Foundation

The Cost of Unnecessary Care?
Institute of Medicine, “Best Care at Lower Cost, Sept 2012

Billing and Insurance Costs
18% of US Health Care Costs
Jiwani et al. BMC Health Services Research (2014)14:556

Single Payer savings $375 BILLION in US
Jiwani et al. BMC Health Services Research (2014)14:556

Why single payer saves money?
• Competitive purchasing of services (free
market)
• Negotiated fee schedules and prices
• Reduced administrative costs
• Robust information management system

State single payer bill
• The Family and Business Health Security Act
would cost 10% of payroll and 3% personal
income tax for individuals
• Comprehensive coverage for all medical,
vision, dental, mental health and long term
care services
• Coverage for life (eliminates need for retiree
health costs for those who stay in Penna)

Outside Economic Analysis
• Dr. Gerald Friedman, Professor of Economics,
Univ. of Massachusetts studied the plan
• $17 billion annual savings

Education funding
• Restore $1 billion in cuts
• 10% payroll vs. 2009 school district health
spending (19.4%)?
• Savings for school districts? $1.15 billion

Pension funding, 2 parts
• Pensions – wages post retirement –somewhat
funded
• Other Post Employment Benefits – pay as you
go
– Health care premiums
– Life insurance premiums
– Deferred compensation

Retiree Health Care
The hidden costs
Zogby, 2014-15 Mid Year Budget Briefing, Dec. 3, 2014

Accrued Retiree Health Unfunded
Liability is over $16 BILLION!
Hay Group, August 21, 2013, “Actuarial Valuation of the Post Retirement Medical Plan”

Bottom Line, $2.5 Billion annually for
Retiree Health Costs just in PA
Hay Group, August 21, 2013, “Actuarial Valuation of the Post Retirement Medical Plan”

Retiree Health Care Costs
• Only a single payer plan can you guarantee
coverage of future health care costs
• Converts an accrual $16 billion liability to a
pay as you go liability – much more affordable

Expand Medicaid
• While we support, it maintains the enormous
administrative waste
• No cost containment features

Summary
• Single payer is the only solution that can
generate billions in state savings
• Able to save in education, pensions, and
Medicaid
• The alternative budget are unconscionable
cuts

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Getting real about single payer

1. Getting Real About Single Payer: The Economic Argument for the Long Term Walter Tsou, MD, MPH Health Care for All Pennsylvania February 7, 2015

2. Pennsylvania in a Pickle • $2+ billion dollar deficit • Revenue from shale gas much less than predicted • Huge pension obligation • Restore $1 billion of public education funding? • Republican legislature tax adverse • Cut spending? But where?

3. What would you cut to get $3 billion? Zogby, 2014-15 Mid Year Budget Briefing, Dec. 3, 2014

4. What is the biggest ignored waste of taxpayer funds?

5. US spends more per capita OECD Health Data, Kaiser Family Foundation

6. $750 Billion on Unnecessary Care?

7. The Cost of Unnecessary Care? Institute of Medicine, “Best Care at Lower Cost, Sept 2012

8. Billing and Insurance Costs 18% of US Health Care Costs Jiwani et al. BMC Health Services Research (2014)14:556

9. Single Payer savings $375 BILLION in US Jiwani et al. BMC Health Services Research (2014)14:556

10. Why single payer saves money? • Competitive purchasing of services (free market) • Negotiated fee schedules and prices • Reduced administrative costs • Robust information management system

11. Affordable Care Act vs. Single Payer

12. State single payer bill • The Family and Business Health Security Act would cost 10% of payroll and 3% personal income tax for individuals • Comprehensive coverage for all medical, vision, dental, mental health and long term care services • Coverage for life (eliminates need for retiree health costs for those who stay in Penna)

13. Outside Economic Analysis • Dr. Gerald Friedman, Professor of Economics, Univ. of Massachusetts studied the plan • $17 billion annual savings

14. Education funding • Restore $1 billion in cuts • 10% payroll vs. 2009 school district health spending (19.4%)? • Savings for school districts? $1.15 billion

15. Pension funding, 2 parts • Pensions – wages post retirement –somewhat funded • Other Post Employment Benefits – pay as you go – Health care premiums – Life insurance premiums – Deferred compensation

16. Retiree Health Care The hidden costs Zogby, 2014-15 Mid Year Budget Briefing, Dec. 3, 2014

17. Accrued Retiree Health Unfunded Liability is over $16 BILLION! Hay Group, August 21, 2013, “Actuarial Valuation of the Post Retirement Medical Plan”

18. Bottom Line, $2.5 Billion annually for Retiree Health Costs just in PA Hay Group, August 21, 2013, “Actuarial Valuation of the Post Retirement Medical Plan”

19. Retiree Health Care Costs • Only a single payer plan can you guarantee coverage of future health care costs • Converts an accrual $16 billion liability to a pay as you go liability – much more affordable

20. Expand Medicaid • While we support, it maintains the enormous administrative waste • No cost containment features

21. Summary • Single payer is the only solution that can generate billions in state savings • Able to save in education, pensions, and Medicaid • The alternative budget are unconscionable cuts

Getting real about single payer

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