Projected costs of single-payer healthcare financing in the United States: A systematic review of economic analyses

BACKGROUND

The United States is the only high-income nation without universal, government-funded or -mandated health insurance employing a unified payment system. The US multi-payer system leaves residents uninsured or underinsured, despite overall healthcare costs far above other nations. Single-payer (often referred to as Medicare for All), a proposed policy solution since 1990, is receiving renewed press attention and popular support. Our review seeks to assess the projected cost impact of a single-payer approach.

METHODS AND FINDINGS

We conducted our literature search between June 1 and December 31, 2018, without start date restriction for included studies. We surveyed an expert panel and searched PubMed, Google, Google Scholar, and preexisting lists for formal economic studies of the projected costs of single-payer plans for the US or for individual states. Reviewer pairs extracted data on methods and findings using a template. We quantified changes in total costs standardized to percentage of contemporaneous healthcare spending. Additionally, we quantified cost changes by subtype, such as costs due to increased healthcare utilization and savings due to simplified payment administration, lower drug costs, and other factors. We further examined how modeling assumptions affected results. Our search yielded economic analyses of the cost of 22 single-payer plans over the past 30 years. Exclusions were due to inadequate technical data or assuming a substantial ongoing role for private insurers. We found that 19 (86%) of the analyses predicted net savings (median net result was a savings of 3.46% of total costs) in the first year of program operation and 20 (91%) predicted savings over several years; anticipated growth rates would result in long-term net savings for all plans. The largest source of savings was simplified payment administration (median 8.8%), and the best predictors of net savings were the magnitude of utilization increase, and savings on administration and drug costs (R2 of 0.035, 0.43, and 0.62, respectively). Only drug cost savings remained significant in multivariate analysis. Included studies were heterogeneous in methods, which precluded us from conducting a formal meta-analysis.

CONCLUSIONS

In this systematic review, we found a high degree of analytic consensus for the fiscal feasibility of a single-payer approach in the US. Actual costs will depend on plan features and implementation. Future research should refine estimates of the effects of coverage expansion on utilization, evaluate provider administrative costs in varied existing single-payer systems, analyze implementation options, and evaluate US-based single-payer programs, as available.

The Affordable Care Act and the Medicare program: the engines of true health reform

The Patient Protection and Affordable Care Act and its amendments by the Health Care and Education Reconciliation Act of 2010 constitute landmark legislation known as the Affordable Care Act (ACA). The ACA has made many changes in the Medicare program as part of comprehensive health reform for the U.S. health care sector. Title III of the ACA pertains to improving the efficiency and quality of health care. Title VI calls for greater program integrity for all federally funded health insurance programs. Collectively, the changes in Medicare in these two titles address the three major problems that the Medicare program has faced since its inception: cost and volume inflation, quality assurance, and fraud and abuse. These changes, if successfully implemented, will have a dramatic impact on the reform of the American health care sector. The policy-making process in the Medicare program is exemplary of the process of "muddling through," as described by the Yale economist Charles E. Lindblom. Nevertheless, these changes may also prepare the Medicare program to be transformed, through several incremental changes in upcoming years, into a single payer system.

The impact of single-payer health care on physician income in Canada, 1850-2005

This study traces the average net income of Canadian physicians over 150 years to determine the impact of medicare. It also compares medical income in Canada to that in the United States. Sources include academic studies, government reports, Census data, taxation statistics, and surveys. The results show that Canadian doctors enjoyed a windfall in earnings during the early years of medicare and that, after a period of adjustment, medicare enhanced physician income. Except during the windfall boom, Canadian physicians have earned less than their American counterparts. Until at least 2005, however, the medical profession was the top-earning trade in Canada relative to all other professions.

The healthcare crisis: competition is the problem and the solution

When judged by any responsible national or international criteria, the U.S. healthcare system has reached the point of crsis. Serious issues exist regarding access, quality, and costs of our present system. Previous reform efforts have not been successful in addressing these concerns. A true market-driven, comprehensive healthcare system incorporating appropriate elements of competition with respect to pricing and the quality of services, along with the availability of accurate, transparent, data-supported information, would offer a higher probability of success in dealing with the causes of our healthcare crisis than would a government-run, single-payor system.

Operating in turbulent times: how Ontario's hospitals are meeting the current funding crisis

With the escalation of the cost of providing health care in Ontario, politicians have begun to attempt to stay the increase by curtailing hospital funding. This article reports on an interview survey of 15 randomly chosen Ontario hospitals that are attempting to cope in the current funding cutbacks. Overall, we found our sample hospitals to be an innovative group on the whole, which were willing to try out new ideas and adapt to the changing environment while protecting quality of patient care.

Uneasy marks

Germany earned a reputation as a European nirvana, marked by a booming job market and generous health and social programs. Now, thanks to the high costs of rebuilding the former East Germany and other factors, national health programs face cutbacks. But just about everyone has a stake in guarding the status quo.

Financing reforms in the German hospital sector: from full cost cover principle to prospective case fees

OBJECTIVES

The authors provide an overview of the hospital sector in Germany with a focus on the impact of recent reform legislation on this sector.

METHODS

Data from the Federal Statistics Office, the Ministry of Health, and the Federal Association of Physicians are synthesized with information obtained from a general review of the literature.

RESULTS

Before the implementation of recent health-care reforms, the German health-care system has been sharply divided into inpatient and ambulatory care sectors, resulting in a fragmented system of care delivery. All hospital operating costs were fully covered through per diem charges. The 1992 Health Care Structure Act and subsequent pieces of legislation have introduced new mechanisms to improve cost efficiency in the hospital sector and increase coordination between the inpatient and outpatient care. These measures notably include implementing an inpatient prospective payment system and permitting ambulatory surgery and care services to be offered in inpatient settings.

CONCLUSIONS

Whereas prospective payments have greatly reduced the length of stay, hospitals were reluctant to offer ambulatory surgery due to budgetary constraints and the high level of ambulatory surgery by office-based physicians. The reforms passed have not yielded substantial cost savings. These reforms offer a natural experiment that could benefit from national and international studies on the impact of hospital sector redesign on management, financing, and patient outcomes.

Health care struggles down under

As Australia struggles to cope with rising health care costs and diminishing public funds, the country must make tough decisions and create new solutions to provide care for its citizens. The United States should take note as it struggles with similar issues.

The future of health care and the medical profession in the United States

The medical profession is going through a traumatic period characterized by loss of autonomy and subversion of doctor-patient relationships. To prepare for the future, physicians need a shared vision and cohesive strategies and goals. Physicians need to be informed and proactive.

The Canadian health care system as a managed care model for the United States

After discussing the evolution of the Canadian health care system and its current cost trends, the authors address the degree to which the Canadian system provides direction for reform in the United States. Accessibility, quality, and cultural acceptability provide the focus of their approach.

The impact of German health insurance reforms on redistribution and the culture of solidarity

The statutory health care scheme represents the most ambitious branch of the German social insurance system because it entails interpersonal redistribution on a large scale. The stability of this centerpiece of the German welfare state thus depends on a "culture of solidarity" to maintain the legitimacy of these redistributions. In this article, the present debate on restructuring the welfare state in general is analyzed. However, the focus is on the ongoing struggle to further reform the health care system. Influential political actors proposals to depart from universal access to a comprehensive range of health care benefits based solely on medical need and from the earnings-related mode of financing stand in stark contrast to empirical results on insured persons' willingness to support the existing system. Findings from qualitative interviews show that a culture of solidarity still prevails among insured persons. It is argued that lasting political attempts to shift the balance between solidarity and self-reliance in favor of the latter could weaken this moral infrastructure of the welfare state and, as a consequence, the statutory health insurance system could lose its plausibility and attraction. Such a development would ease the reconstruction of the social security system by privatizing parts of currently public expenditures and reducing the scope of interpersonal redistribution.