Hours before Senate Majority Leader Harry Reid, D-Nev. announced the postponement of a vote on health care reform until after the August recess, nine freshmen senators wrote a letter to Senate Finance Committee Chairman Max Baucus stating the need to prioritize cost containment in the health care debate. "In the face of exploding debt and deficits...we are concerned that too little focus has been given to the need for cost containment," the senators wrote, "...we must get health care costs under control so we can compete and lead in the global marketplace."
Blue Dog Rep. Jim Cooper (D-Tenn) reiterated on Face the Nation that primary considerations of reform are lowering health care costs and not adding to deficit spending.
The professed twin goals of health care reform are to provide health care coverage for all and to lower costs -- magnifying the irony that Democratic leaders preempted discussion of the single-payer reform model. Consequently, the Congressional Budget Office has evaluated the costs of every other proposal except the single-payer bills, HR 676 and SB 703.
With renewed expressions of urgency for deficit reduction by both Blue Dog Democrats and born-again Republican deficit hawks, an honest side-by-side analysis of the costs of all health care reform proposals, including the two single-payer bills, should be reviewed by Congress. More than 20 federal and state studies since 1991 have shown substantial savings with a single-payer model (most recently, almost $400 billion annual federal savings) - enough to upgrade to comprehensive the coverage for all under- and uninsured U.S. residents.
The Lewin evaluation of savings with a Colorado single payer proposal is an indicator of the types of savings possible. Note: Colorado hired the Lewin Group for evaluation of 5 proposals before the business was bought by Ingenix, a UnitedHealth subsidiary. As lead person of the Colorado evaluations, John Sheils had a long history of conducting these studies.
Lewin Report Savings with Colorado State Single Payer Proposal
(2007/2008) (my notes added)
Reduction of state health costs $1.4 billion
Reduction of administrative costs $2.8 billion
Reduced out-of-pocket costs to Coloradans $2.6 billion
Health cost savings to businesses $2.34 billion
• Freed from the cost of managing employee health care plans, businesses can compete equal footing in the global marketplace, without erosion of profits.
• Employees have higher effective take-home wages when rising health care costs are no longer passed on to them by employers.
• Consumers save added costs of goods and services due to business costs of health plans (e.g., more than $1500 added to cost of each U.S.-made car).
Cost savings to Colorado families $187 million
• Families pay less in a progressive tax than current costs of premiums, copays and deductibles for commercial health insurance.
Cost savings to providers (26%) $669 million
• Eliminates provider cost of extra office help to handle different paperwork of multiple private insurers - billing, preauthorization and credentialing requirements, and changing drug formularies.
• Eliminates administrative costs of insurance middlemen in 'Denial Management' hired to deny or renig on reimbursements at additional $20 billion annual cost, resulting in 30 percent of U.S. health claims being initially denied, requiring repeat appeals. (The Wall Street Journal 2-14-07)
Cost savings to hospitals (9.8%) $322 million
• Hospitals will no longer experience the cost-shift of unpaid medical bills due to high numbers of uninsured and underinsured, costs passed on to consumers and taxpayers.
Savings for Prescription Drugs and Durable Medical Goods $322 million
• Only the CHS proposal permits bulk purchase of pharmaceuticals and durable medical goods.
Overall statewide savings of $1.4 billion with the single-payer model was demonstrated, even with the increased costs of providing comprehensive coverage for the under- and uninsured, and adding long-term care coverage for all. The Lewin Report noted:
Statewide health spending under the CHS Single Payer in Colorado in 2007/2008 would decrease by $1.4 billion from $30.1 billion under the current system to $28.7 billion (Figure 59). This includes benefits (including administration) of $26.58 billion, household out-of-pocket payments of $1.33 billion and supplemental insurance of $795 million. Most of the decrease in overall health spending from all payers under the CHS single payer system results from reduced administrative costs of about $1.86 billion. Read the 5-page excerpt of Lewin Report Savings.
Blue Dogs, Republicans, demand a CBO evaluation of cost savings with the single payer
proposals! You have nothing to lose but corporate lobby money. And that's the point, isn't it?
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