Projected costs of single-payer healthcare financing in the United States: а systematic review of economic analyses

• Cai Ch.
• Runte J.
• Ostrer I.
• Berry K.
• Ponce N.
• Rodriguez M.
• Bertozzi S.
• White J.S.
• Kahn. J.G.

Abstract

Background. The United States is the only high-income nation without universal, government-funded or - mandated health insurance employing a unified payment system. The US multi-payer system leaves residents uninsured or underinsured, despite overall healthcare costs far above other nations. Single-payer (often referred to as Medicare for All), a proposed policy solution since 1990, is receiving renewed press attention and popular support. Our review seeks to assess the projected cost impact of a single-payer approach.

Methods and findings. We conducted our literature search between June 1 and December 31, 2018, without start date restriction for included studies. We surveyed an expert panel and searched PubMed, Google, Google Scholar, and preexisting lists for formal economic studies of the projected costs of single-payer plans for the US or for individual states. Reviewer pairs extracted data on methods and findings using a template. We quantified changes in total costs standardized to percentage of contemporaneous healthcare spending. Additionally, we quantified cost changes by subtype, such as costs due to increased healthcare utilization and savings due to simplified payment administration, Lower drug costs, and other factors. We further examined how modeling assumptions affected results. Our search yielded economic analyses of the cost of 22 single-payer plans over the past 30 years. Exclusions were due to inadequate technical data or assuming a substantial ongoing role for private insurers. We found that 19 (86%) of the analyses predicted net savings (median net result was a savings of 3.46% of total costs) in the first year of program operation and 20 (91%) predicted savings over several years; anticipated growth rates would result in long-term net savings for all plans. The largest source of savings was simplified payment administration (median 8.8%), and the best predictors of net savings were the magnitude of utilization increase, and savings on administration and drug costs (R² of 0.035, 0.43, and 0.62, respectively). Only drug cost savings remained significant in multivariate analysis. Included studies were heterogeneous in methods, which precluded us from conducting a formal meta-analysis.

Conclusions. In this systematic review, we found a high degree of analytic consensus for the fiscal feasibility of a single-payer approach in the US. Actual costs will depend on plan features and implementation. Future research should refine estimates of the effects of coverage expansion on utilization, evaluate provider administrative costs in varied existing single-payer systems, analyze implementation options, and evaluate US-based single-payer programs, as available.

Why was this study done?

■ As the US healthcare debate continues, there is growing interest in "singlepayer" also known as "Medicare for All." Single-payer uses a simplified public funding approach to provide everyone with high-quality health insurance.

■ Public support for provision of universal health coverage through a plan like Medicare for All is as high as 70%, but falls when costs are emphasized.

■ Economic models help assess the financial viability of single-payer. Yet, models vary widely in their assumptions and methods, and can be hard to compare.

What did the researchers do and find?

■ We found and compared cost analyses of 22 single-payer plans for the US or individual states.

■ 19 (86%) of the analyses estimated that health expenditures would fall in the first year, and all suggested the potential for long-term cost savings.

■ The largest savings were predicted to come from simplified billing and lower drug costs.

■ Studies funded by organizations across the political spectrum estimated savings for single-payer.

What do these findings mean?

■ There is near-consensus in these analyses that single-payer would reduce health expenditures while providing high-quality insurance to all US residents.

■ To achieve net savings, single-payer plans rely on simplified billing and negotiated drug price reductions, as well as global budgets to control spending growth over time.

■ Replacing private insurers with a public system is expected to achieve lower net healthcare costs.

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