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Would Medicare for All Save the U.S. Money?

Yuval Rosenberg

Politico’s policy magazine, The Agenda, on Monday rolled out a special issue focused on Medicare for All, with much of the package centered on a key question: Would switching to a single-payer system really save money?

In one piece, Politico invited an “all-star team” of six policy wonks from across the ideological spectrum to debate the issue, and the responses were predictably divergent.

Yes, Medicare for All is the best way to cut health-care costs: “A single-payer system may be the only plausible way to get a grip on our health care costs without harming patients,” said Don Berwick, who was the administrator of the Centers for Medicare and Medicaid Services under President Obama and has advised Elizabeth Warren on her Medicare for All plan. “Without it, it’s hard to find a route to the administrative simplification, purchasing power, and investments in better quality of care and prevention that can get at the fundamental drivers of cost increases that don’t add value. Whether it’s realistic or not depends on building public confidence in the benefits of that strategy.”

No, costs would go up: Other experts argued that total spending would rise as uninsured people gained coverage and use more health care. “That’s a very good thing for their health, but it comes with a cost that taxpayers have to finance,” said Kate Baicker, Dean of the University of Chicago Harris School of Public Policy. To lower overall costs, Medicare for All would have to sharply reduce the price of care — which isn’t necessarily impossible, but could lead to other problems. “I’m not sure that we can lower overall health spending without restricting access to care in ways that people might not like, such as through denying coverage, or even shortages caused by cutting back on reimbursement rates,” Baicker said.

We can’t count on politicians to fight the health-care industry: “This question really comes down to politics, not economics,” said Sherry Glied, dean of New York University’s Robert F. Wagner Graduate School of Public Service. Congress has had a hard time cutting hospital or doctors’ prices, and it’s hard to see them slashing the pay of health-care workers whose votes they want. “Today, health care is the largest employer in over 55 percent of U.S. congressional districts ― a political reach the defense industry must envy,” Glied noted. “Under a single-payer system, the entire livelihood of all those health care providers would depend on choices made by federal legislators and regulators. That’s an extraordinarily potent political force, with unparalleled access to members of Congress.”

Lanhee Chen, the director of domestic policy studies at Stanford University who served as chief policy adviser for Mitt Romney’s 2012 presidential campaign, agreed, suggesting that “the politics will make it almost impossible for single-payer to be fiscally sustainable.”

Read the full piece at Politico, including more on lowering hospital costs, a discussion of the benefits and limitations of price transparency in health care and why Medicaid for All might hold more promise than Medicare for All.

More from Politico’s package:

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