Even with the recent passage of the Patient Protection and Affordable Care Act, health care remains a major political issue, and one that also deeply impacts the U.S. economy. Recent research by Professor Gerald Friedman on the prospect of expanding Medicare to cover all Americans is promising; it shows almost $500 billion in savings in the first year alone, and it would cover the almost 50 million Americans who remain uninsured. Friedman’s research was mentioned by the organization Public Citizen regarding a push by Rep. John Conyers (D-MI) and Sen. Bernie Sanders (I-VT) to make ‘Medicare for All’ a reality. It was also mentioned by Salon‘s Adam Gaffney.
The new study, done by Gerald Friedman, professor of economics at the University of Massachusetts Amherst and released today by Physicians for a National Health Program, shows that upgrading the nation’s Medicare program and expanding it to cover people of all ages would yield more than a half-trillion dollars in efficiency savings in its first year of operation, enough to pay for high-quality, comprehensive health benefits for all residents of the United States at a lower cost to most individuals, families and businesses.
Under the single-payer system envisioned by “The Expanded & Improved Medicare For All Act” (H.R. 676), the U.S. could save $592 billion – $476 billion by eliminating administrative waste associated with the private insurance industry and $116 billion by reducing drug prices – in 2014.
Yet, the United States already has more health care “consumerism” and cost sharing than other developed countries – and yet we have much higher costs. The truth is that there are safer and better-proven methods of cost control that we could employ, and which wouldn’t involve making a patient pay every time he or she gets sick.
We could, for instance, allow Medicare to directly bargain with drug companies over prescription drug prices, as other wealthy countries already do: by one estimate, the savings from this reform alone could range from $230 to $541 billion over ten years.
More ambitiously, we could work towards a “single payer system,” which could save billions through reduced administrative and clerical expenditures, while allowing costs to be directly controlled through global budgets and fee schedules. Gerald Friedman, an economist at the University of Massachusetts at Amherst, recently estimated the savings of such a system at $592 billion annually.