New CBO report shows positive scenarios for single-payer system
Models suggest a single-payer system could bolster provider revenues for clinical services and eliminate almost all copayments and deductibles.
Medicare for All would achieve universal coverage, bolster provider revenues for clinical services and eliminate almost all copayments and deductibles, according to a new analysis by the Congressional Budget Office.
The CBO modeled costs under five different variants of single-payer, “Health Affairs” reported. The first four envision universal coverage of all services other than long-term care, while the fifth incorporates a large expansion of long-term services and supports for people with disabilities of all ages.
Related: California commission to explore single-payer system
The scenarios vary by patient cost-sharing and provider payment level:
- Low cost-sharing has no copays or deductibles for medical services and minimal cost-sharing for prescription drugs; under high cost-sharing, patients with incomes above 150% of the poverty level would bear about 7.5 percent of costs out of pocket.
- Low payment rates to providers would set rates slightly higher than Medicare’s; high rates would be equivalent to the current average of the rates paid by private insurers and government programs.
The CBO projects that variants one through four of single-payer reform would reduce national health expenditures despite substantial increases in the use of care triggered by expanded and upgraded coverage. If a vast new program covering long-term services and support for all Americans were included, the CBO estimates that expenditures would rise by 4.4% above currently projected spending levels.
The CBO projects that the share of revenues that hospitals spend on administration would fall from 19% at present to 12%; that physicians’ administrative overhead would fall from 15% to 9%; and that the administrative expenses of other medical providers (for example, dentists, home health agencies and hospices) would fall from 9% to 6%.
In addition, it estimates that physicians and nurses would spend less time on administrative activities, freeing up 4.8% of physicians’ work hours and 18.4 % of nurses’ work time. For hospitals, the CBO estimates that gross revenue would fall by $187 billion under the low-pay scenario but rise by $144 billion under the high-payment scenario.
“Overall, the CBO report provides one of the most detailed explorations to date of the economics of single-payer financing,” the “Health Affairs” report concluded. “It makes many sound assumptions, particularly about payer- and provider-side administrative savings. At the same time, it adopts some unfavorable assumptions about the structure of single-payer reform (including some that conflict with key provisions of the Medicare for All bills in Congress), projects excessive windfalls for some providers and asserts clinically nescient portrayals of unmet demand.
”Nonetheless, the bottom line of the CBO analysis – that universal coverage can be affordably achieved even as benefits are expanded and cost-sharing all but eliminated – should reinvigorate debate over such reform.
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