Just prior to last night's debate, Sanders released a plan. We can now see how he proposes to shift away from the current mix of health care funding to a single payer system. As part of the document, he identifies the taxes he would implement as an alternative.
But Sanders also says this about cost savings:
Other industrialized nations are making the morally principled and financially responsible decision to provide universal health care to all of their people—and they do so while saving money by keeping people healthier. Those who say this goal is unachievable are selling the American people short.It has always been an assumption that single payer would be cheaper than our current system because of lower administrative costs. But here is a quote Ezra Klein got about the actual numbers in the Sanders plan.
"They assumed $10 trillion in health-care savings over ten years," says Larry Levitt, vice president at the Kaiser Family Foundation. "That’s tremendously aggressive cost containment, even after you take the administrative savings into account."Both Klein and Paul Krugman point out that, if we want to capture the cost savings that Sanders refers to, Americans will have to get used to hearing "no" when it comes to health care. Here's Krugman:
Now, it’s true that single-payer systems in other advanced countries are much cheaper than our health care system. And some of that could be replicated via lower administrative costs and the generally lower prices Medicare pays. But to get costs down to, say, Canadian levels, we’d need to do what they do: say no to patients, telling them that they can’t always have the treatment they want.
Saying no has two cost-saving effects: it saves money directly, and it also greatly enhances the government’s bargaining power, because it can say, for example, to drug producers that if they charge too much they won’t be in the formulary.
But it’s not something most Americans want to hear about...As I pointed out this morning, Bernie Sanders assumes that resistance to single payer would come solely from lobbyists for the insurance, healthcare and pharmaceutical companies (as well as the wealthy people who would have to pay significantly higher taxes). But the truth is, once this kind of information starts circulating about the realities of the hoped-for cost savings in single payer, the American people would start to weigh in as well. If you thought the "death panels" and "you can keep your insurance" pushbacks were loud and obnoxious, they would be nothing compared to what we'd hear about "government rationing health care" that this kind of thing would unleash. It's true that some of that would be the result of monied interests exploiting people's fears. But it would also arise from very real concerns about changes to what many people have come to expect from our health care system.
Let's be honest, there are multiple and complex reasons why health care is more expensive in the United States. It would be great to capture the savings single payer could achieve through streamlining administrative costs. But to get to the lower costs that other industrialized countries experience, we need to go far beyond that. If Sanders wants to make a case that America should follow suit, he needs to be honest with us about what that means.