Healthcare provisions such as those outlined in the Medicare for All Act would help save both lives and money in the US, a new study reports.

A shift towards universal single-payer healthcare for all Americans would help save an estimated 68,000 lives and $450 billion (based on the value of the dollar in 2017), the study explains. Today, 41 million Americans have inadequate access to care and over 37 million do not have health insurance at all, the authors note. The figures take into account both the increased costs associated with such a scheme as well as the reduction in costs associated with better-quality healthcare for every citizen.

Care for more, save more

“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,” the paper explains. “Moreover, universal health care would save lives while simultaneously improving the quality and productivity of those lives, as detailed here.”

“Beyond economic considerations, the paramount objective of a health-care system is to save lives,” the authors rightly point out.

The authors explain that single-payer healthcare systems are and have long been perceived in the US as being economically impractical. However, they also contend that data on the ground showcases the limitations of the current system as well. Despite having the highest health-care expenditure in the world (18% of GDP), they write, “the USA ranks below 30 countries for many public health indicators, including preventable deaths, infant survival, maternal mortality, and overall life expectancy.”

The view that Americans get very little medical bang for their bucks is further echoed by other organizations and researchers. Back in 2010, a report by the Commonwealth Fund explained that the US ranked last among seven countries (Australia, Canada, Germany, the Netherlands, New Zealand, the UK, and the US) in regards to the quality, level of access, and efficiency of its medical system. American citizens ranked lowest for longevity and overall health condition among those countries as well. The situation didn’t much improve by 2017, when a report from the Organisation for Economic Co-operation and Development (OECD) noted that “life expectancy in the United States was slightly lower [by two years] than the OECD average, despite very high levels of health spending,” despite the fact that it was one year over the average back in 1970, and that the quality of healthcare was close to OECD average despite spending being more than double the average ($9,892 compared to $4,003, adjusted for local costs). And they’re just a few out of many.

The Medicare for All Act would benefit low-income households the most, the authors explain, which are the most at-risk segment of the population and also the least likely to afford and access health care. Single-payer health-care schemes involve the government paying for health coverage, for everyone, with funds it raises through taxation or other means. “Single-payer” here describes a mechanism by which healthcare is paid for by a single public authority (as opposed to a mix of public and private actors or a single private entity).

Such systems help keep costs down by allowing the government to negotiate the price of drugs and services on behalf of patients — which virtually always translates into better deals — and removes most of the private healthcare-insurance bureaucracy. Currently, around 25% of all healthcare spending in the US is ‘wasted‘; high costs of drugs and medical devices relative to other countries further gobble up funds, as does low social spending.

For the study, the team looked at projected spending under the Medicare for All Act and developed the Single-payer Healthcare Interactive Financing Tool (SHIFT, accessible here) to test scenarios in which key variables underpinning healthcare costs change in the future. All in all, they report that the Medicare for All Act would lead to both improved service, insurance expansion, greater efficiency, lower drug prices, and “yield net savings for the health-care system across a wide range of [scenarios]” for patients and medical institutions both.

“Applying the fees negotiated by Medicare across all services for all individuals, we calculated that hospital fees would be reduced by [5% to 54%] and clinical service fees by [7% to 38%], amounting to annual savings of $100 billion,” the team explains.

“From the perspective of health-care providers, lower fees per service would be offset by savings from reduced billing and administrative tasks, which represent a $768 billion cost for health-care providers. Consolidation of billing into a unified system is estimated to have the potential to reduce this expenditure by $284 billion, which would be more than double the proposed change in fees”.

The authors further note that such a system would lead to the elimination of unpaid bills, which currently amount to “$35 billion annually for hospitals alone” and reduce the “overwhelming paperwork” required of physicians, which is a leading cause for burnout.

The paper “Improving the prognosis of health care in the USA” has been published in the journal The Lancet.