A Medicare for all healthcare system has the potential to improve the availability of services and efficiency of care in the United States, according to a recent study published in The Lancet.
The study underscored that despite having the highest healthcare expenditure per capita, the U.S. still struggles with uninsured and underinsured people. Currently, about 37 million Americans are without health insurance, while another 41 million have inadequate access to care, according to Yale researchers who conducted the study.
The study comes at a time when the Trump administration and Republicans in Congress are still attempting to remove the Affordable Care Act from law, potentially endangering another 21 million Americans from losing access to care, Yale researchers noted. Another 38,500 lives would be lost annually if the ACA were to be repealed, lead author Alison Galvani, of Yale School of Public Health, and colleagues wrote.
By contrast, Medicare for all would actually cut healthcare expenditures 13%, or more than $450 billion annually. In addition, a universal healthcare system would save 68,000 lives annually by ensuring access to care for all Americans. And creating a universal healthcare system wouldn’t come at a significant cost to taxpayers compared to the current healthcare system.
“The entire system could be funded with less financial outlay than is incurred by employers and households paying for health-care premiums combined with existing government allocations,” Galvani et al. wrote.
Furthermore, the economic and life-saving effects of a single-payer healthcare system outweigh costs.
“We find that the expected savings from a universal single-payer system would more than compensate for the increased expenditure associated with universal health-care coverage,” Galvani et al. wrote.
A big area for savings under a universal healthcare system comes from administration overhead savings. Providing health insurance comes with a huge overhead for administrative costs-––12.4% of spending. For Medicare, that comes down to just 2.2%. Applied to a Medicare for all plan, $219 billion could be saved by consolidating insurance administrative schemes into the Medicare framework, Yale researchers found.
However, they also suggested a salary cap for the “top-heavy salary architecture of health insurance corporations,” bringing salaries down to a $210,700 cap, which is the same salary as the Secretary of HHS. Other major areas of savings include pharmaceutical price negotiations, reduced hospital and clinical services fees, and restructuring healthcare expenditures.
The findings underscore that cost objections to a universal healthcare system can be overcome.
“Our projections indicate that implementing the Medicare for All Act specifically would generate net savings across a wide range of possible expenditure and financing options,” Galvani et al. wrote. “Objections to the Medicare for All Act based on the expectation of rising costs are mistaken.”
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."