The Corner

Health Care

If You Assume Single-Payer Saves Money, It Does

The RAND Corporation advertises a new study of New York’s proposed single-payer plan as showing that the policy “Could Expand Coverage Without More Spending.” This refers to total spending, not just government spending, of course, and “could” does a lot of work: What the study actually shows is that single-payer could do just about anything, depending on what assumptions you start with — echoing the lessons of the Mercatus Center study I discussed yesterday.

The study’s “base case” estimate is that single payer would reduce total health-care spending in the state by 1 percent by 2022 and 3 percent by 2031. Some key assumptions, however, are that (a) administrative costs will eat up only 6 percent of the money for health-care services; (b) provider payment rates will “grow at a rate equal to that in Medicare and Medicaid” (which is lower than the rate at which private payments are growing); (c) drug prices will be 10 percent lower than status-quo Medicare prices; and, most troublingly, (d) “increased patient demand for services would not be fully met because of ‘congestion’ — nonfinancial factors limiting the supply of services.”

But the study also shows some alternative scenarios. In one, provider payments increase at the private rate, the administrative rate is 12 percent, and drug prices are higher. In that case, health spending goes up 7 percent by 2022 and 12 percent by 2031. And if you yank the assumptions in the opposite direction, costs go down quite dramatically, 12 percent by 2022 and 15 percent by 2031.

It kind of sounds like we actually have no idea how much total spending would increase or decrease under single-payer, much less what would happen to the quality of care, though we do know it would transfer an immense amount of money and power to the government.

I’m a fan of federalism and left New York years ago, so part of me hopes they’ll try it so we can all see how it works, but make no mistake: It’s a major gamble.

Most Popular

Politics & Policy

Ten Questions for the ‘Squad’

Democratic infighting reached a fever pitch last week with bickering and personal attacks between members of the “Squad” and other House Democrats. During that period, Squad members Alexandria Ocasio-Cortez, Ilhan Omar, Rashida Tlaib, and Ayanna Pressley mostly avoided doing interviews. However, that all ... Read More
World

Who Is Boris Johnson?

By next week at this time, Boris Johnson will be prime minister of the United Kingdom. Not since Margaret Thatcher has such an outsized personality resided in Number 10 Downing Street. Not since Winston Churchill has such a wit presided over Her Majesty’s Government. Wit is actually the chief reason for ... Read More
U.S.

The Rise of the Chinese-American Right

On June 13, during a nasty storm, a group of Chinese New Yorkers gathered in front of the gates of Gracie Mansion, the New York mayor’s residence on the Upper East Side, to protest. Inside, Mayor Bill de Blasio was meeting with two dozen or so representatives of the Asian-American community to discuss his ... Read More