Single Payer Single Payer Health Care Health Care

ReformReformImpact on State and Local Impact on State and Local Governments in OregonGovernments in Oregon

Peter Mahr, MDPNHP Portland OR Chapter

April 6th, 2010

Our Current Non SystemOur Current Non System We spend more than twice as much as the We spend more than twice as much as the

rest of the industrialized nations ($8,160 rest of the industrialized nations ($8,160 per capita) or 16% of GDP.per capita) or 16% of GDP.

We perform poorly in comparison on major We perform poorly in comparison on major health indicators such as life expectancy, health indicators such as life expectancy, infant mortality and immunization rates.infant mortality and immunization rates.

Other advanced nations provide Other advanced nations provide comprehensive coverage to their entire comprehensive coverage to their entire populations, while we leave 46.3 million populations, while we leave 46.3 million completely uninsured and millions more completely uninsured and millions more inadequately covered.inadequately covered.

Our Current Non SystemOur Current Non System The reason we spend more and get less than The reason we spend more and get less than

the rest of the world is because we have a the rest of the world is because we have a patchwork system of for-profit payers. patchwork system of for-profit payers.

Private insurers necessarily waste health Private insurers necessarily waste health dollars on overhead, underwriting, billing, dollars on overhead, underwriting, billing, sales and marketing departments as well as sales and marketing departments as well as huge profits and exorbitant executive pay. huge profits and exorbitant executive pay.

Doctors and hospitals must maintain costly Doctors and hospitals must maintain costly administrative staffs to deal with the administrative staffs to deal with the bureaucracy. Combined, this needless bureaucracy. Combined, this needless administration consumes one-third (31 administration consumes one-third (31 percent) of Americans’ health dollars. percent) of Americans’ health dollars.

Current SolutionCurrent Solution

Build on current system- subsidize Build on current system- subsidize purchase of private insurancepurchase of private insurance

Some new insurance regulationSome new insurance regulation State exchangesState exchanges Expand MedicaidExpand Medicaid Some delivery changesSome delivery changes Like MassachusettsLike Massachusetts

Massachusetts as the Massachusetts as the ExampleExample

Uninsured improvedUninsured improved Underinsured a continuing problemUnderinsured a continuing problem VERY EXPENSIVE!!!VERY EXPENSIVE!!!

Massachusetts: Required Massachusetts: Required CoverageCoverage

(Income > $31k)(Income > $31k) Premium: $4,800 Annually (56 year Premium: $4,800 Annually (56 year

old)old)

$2000 deductible$2000 deductible

20% co-insurance AFTER deductible is 20% co-insurance AFTER deductible is reachedreached

Other Developed NationsOther Developed Nations

3 Necessities:3 Necessities: A single system for everybodyA single system for everybody No for-profit health insuranceNo for-profit health insurance No uninsured. Everybody in, nobody No uninsured. Everybody in, nobody

out.out. Federal Reform: contains none of Federal Reform: contains none of

these. these. Single Payer: contains all.Single Payer: contains all.

What About Single What About Single Payer?Payer?

Financed by eliminating private insurers Financed by eliminating private insurers and recapturing their administrative and recapturing their administrative waste. waste.

Modest new taxes would replace Modest new taxes would replace premiums and out-of-pocket payments premiums and out-of-pocket payments currently paid by individuals and currently paid by individuals and business. business.

Costs would be controlled through Costs would be controlled through negotiated fees, global budgeting and negotiated fees, global budgeting and bulk purchasing. bulk purchasing.

What About Single What About Single Payer?Payer?

Benefits: all Americans would be Benefits: all Americans would be covered for all medically necessary covered for all medically necessary services: doctor, hospital, preventive, services: doctor, hospital, preventive, long-term care, mental health, long-term care, mental health, reproductive health care, dental, vision, reproductive health care, dental, vision, prescription drug and medical supply prescription drug and medical supply costs. costs.

Free choice of doctor and hospital.Free choice of doctor and hospital. Doctors regain autonomy over patient Doctors regain autonomy over patient

care. care.

Single Payer and State Single Payer and State EconomiesEconomies

What do existing studies What do existing studies show (or… show (or… show me the show me the money!)money!)

Single Payer – Single Payer – AffordableAffordableRhode IslandRhode Island

November 2002: Rhode Island: November 2002: Rhode Island: Single Payer would save $270 Single Payer would save $270 millionmillion

Cover 75,000 uninsured, Cover 75,000 uninsured, improve access for many more.improve access for many more.

SourceSource: (Sager, A.; Boston University School of Public Health; “Rhode : (Sager, A.; Boston University School of Public Health; “Rhode Island Can Afford Health Care for All: A Report to the Rhode Island Island Can Afford Health Care for All: A Report to the Rhode Island General Assembly” )General Assembly” )

Single Payer – AffordableSingle Payer – AffordableMissouriMissouri

October 2003:October 2003: Missouri Missouri Single-Payer would save Single-Payer would save $1.7 billion$1.7 billion

A single payer health care plan in the A single payer health care plan in the state of Missouri state of Missouri would reduce would reduce overall health care spending by overall health care spending by about $3 billion.about $3 billion.

Source: ( Missouri Foundation For Health; “A Universal Health Care Source: ( Missouri Foundation For Health; “A Universal Health Care Plan for Missouri”; online: Plan for Missouri”; online: httphttp://www.mffh.org/ShowMe3.pdf://www.mffh.org/ShowMe3.pdf))

Single Payer – AffordableSingle Payer – AffordableGeorgiaGeorgia

June 2004:June 2004:Single-Payer health Single-Payer health would cover would cover all Georgia residents and save all Georgia residents and save $716 million annually.$716 million annually.

Nearly all Georgia families Nearly all Georgia families would would pay lesspay less for health care for health care than they are today for than they are today for much much better coveragebetter coverage..

Source:Source: (The Lewin Group, Inc. “The Georgia SecureCare Program:  (The Lewin Group, Inc. “The Georgia SecureCare Program: Estimated Cost and Coverage Impacts” Final report 10/21/03)Estimated Cost and Coverage Impacts” Final report 10/21/03)http://www.pnhp.org/news/lewinanalysis.pdf))

Single Payer- AffordableSingle Payer- AffordableCalifornia SB 810California SB 810

2005 Lewin Group: Reduction in overall 2005 Lewin Group: Reduction in overall health spending by $344 billion over 10 yearshealth spending by $344 billion over 10 years

Families with under $150,000 in annual Families with under $150,000 in annual income would, on average, see savings income would, on average, see savings ranging between ranging between $600 and $3,000 per $600 and $3,000 per familyfamily..

Employers who currently offer health benefits Employers who currently offer health benefits would realize average would realize average savings of 16% savings of 16% comparedcompared to the current system. to the current system.

Source: Lewin Group Report; “The Health Care for all Californians Act: Cost and Economic Impacts Analysis” Jan 19th, 2005.

Single Payer – AffordableSingle Payer – AffordableKansasKansas

December, 2007:December, 2007: Single payer (“the Mountain Single payer (“the Mountain

plan”) would cover all the plan”) would cover all the uninsured and reduce state uninsured and reduce state health spending by $869 health spending by $869 million annually.million annually.

The other plans would cover a The other plans would cover a portion of the uninsured and portion of the uninsured and would raise costs between $150 would raise costs between $150 million to $500 million in the state.million to $500 million in the state.((www.healthfund.org/reportspubs/11012007fdn_report_khpa.php)

Single Payer- AffordableSingle Payer- AffordableColoradoColorado

2007 Lewin Group Study¹2007 Lewin Group Study¹ CHSP (single payer) would reduce CHSP (single payer) would reduce

spending by spending by $1.4 billion.$1.4 billion. Primarily due to the reduction in Primarily due to the reduction in

costs of administering insurance costs of administering insurance under a uniform program of under a uniform program of coverage for all state residents.coverage for all state residents.

1. Cost and Coverage Impacts of Five Proposals to Reform the Colorado Health Care System1. Cost and Coverage Impacts of Five Proposals to Reform the Colorado Health Care SystemLewin Group Study, 2007Lewin Group Study, 2007

Single Payer and State Single Payer and State EconomiesEconomies

What do existing studies What do existing studies showshow

What about OregonWhat about Oregon

City of Portland FY 2009City of Portland FY 2009

Health Care Costs: $65.9 millionHealth Care Costs: $65.9 million Number of Employees: 5,017Number of Employees: 5,017 Total Payroll: not given, but assume Total Payroll: not given, but assume

$70,000/employee would be: $351 $70,000/employee would be: $351 millionmillion

Health Care Costs Under Single Health Care Costs Under Single Payer¹: $28.1 millionPayer¹: $28.1 million

Savings Under Single Payer: Savings Under Single Payer: $ 37.8 $ 37.8 millionmillion

1. Assuming 8% employer payroll tax as funding.

Lane County FY 2009Lane County FY 2009

Health Care Costs: $21.2 millionHealth Care Costs: $21.2 million Eligible Employees: 1300Eligible Employees: 1300 Total payroll: $76 millionTotal payroll: $76 million Health Costs as a Percentage of Health Costs as a Percentage of

payroll: 28%payroll: 28% Savings Under a Single Payer Savings Under a Single Payer

Program¹: Program¹: $15.1 million$15.1 million

1. Assuming 8% employer payroll tax

Washington County FY Washington County FY 20092009

Health Care Costs: $20 millionHealth Care Costs: $20 million Number of Employees: 1760Number of Employees: 1760 Total payroll: $114 millionTotal payroll: $114 million % of payroll Now: 17.5%% of payroll Now: 17.5% Health Care Costs Under Single Health Care Costs Under Single

Payer¹: $9.1 millionPayer¹: $9.1 million Savings Under Single Payer: Savings Under Single Payer:

$10.9 million$10.9 million

1. Assuming 8% employer payroll tax

Multnomah County FY Multnomah County FY 20092009

Health Care Costs: $55.5 millionHealth Care Costs: $55.5 million Number of employees: 4480Number of employees: 4480 Total Payroll: $248.3 millionTotal Payroll: $248.3 million Health Care Costs as % of Payroll Now: Health Care Costs as % of Payroll Now:

22%22% Health Care Costs Under Single Payer¹: Health Care Costs Under Single Payer¹:

$19.9 million$19.9 million Savings Under Single Payer: Savings Under Single Payer: $35.6 $35.6

millionmillion1. Assuming 8% employer payroll tax

State of Oregon FY 2009State of Oregon FY 2009

Health Care Costs: $598.6 millionHealth Care Costs: $598.6 million Number of Employees: 48,695Number of Employees: 48,695 Health Care Benefit Staff Salary: $1.2 millionHealth Care Benefit Staff Salary: $1.2 million Total payroll: not reported yet, but if using Total payroll: not reported yet, but if using

$60,000 per year per employee: $2.9 billion.$60,000 per year per employee: $2.9 billion. Health care Costs under Single Payer¹: Health care Costs under Single Payer¹:

$233.7 million$233.7 million Savings with Single Payer: Savings with Single Payer: $365.3 $365.3

millionmillion

1. Assuming 8% employer payroll tax for funding

OR State and Local OR State and Local Governments:Governments:A SummaryA Summary

Current Health Care Costs: $13,900 Current Health Care Costs: $13,900 per employeeper employee

% of payroll: (estimate assuming % of payroll: (estimate assuming $60,000 a year for those not $60,000 a year for those not reporting payroll)¹: 19.2%reporting payroll)¹: 19.2%

Savings per Public Employee: Savings per Public Employee: $8,108$8,108

1. Excluding lane County which was an outlier

Public Education in ORPublic Education in OR

Total teachers: 32,626Total teachers: 32,626 Cost Savings under Single Payer¹: Cost Savings under Single Payer¹:

$265 million$265 million Teachers plus Staff: 45,093Teachers plus Staff: 45,093 Cost Savings Under Single Cost Savings Under Single

Payer¹: $Payer¹: $365.6 million365.6 million

1. From Previous Slide: $8,108 per public employee

Bill BradburyBill BradburyThe Education GovernorThe Education Governor

How many new teachers could you How many new teachers could you hire with $365 million???hire with $365 million???

60836083

What Can a State What Can a State Politician Do?Politician Do?

Mandate a study of a single payer Mandate a study of a single payer plan in OR as part of HB2009plan in OR as part of HB2009

Discuss the economic ball and chain Discuss the economic ball and chain of health care costs at every of health care costs at every opportunity.opportunity.

Don’t be afraid of single payer!Don’t be afraid of single payer!

In November 2004, In November 2004, Canadians voted Canadians voted

Tommy DouglasTommy Douglas, Canada's , Canada's "father of Medicare," the "father of Medicare," the Greatest Canadian of all Greatest Canadian of all

time following a nationwide time following a nationwide contest sponsored by the contest sponsored by the

CBCCBC

Or maybe I should have Or maybe I should have titled this talk…..titled this talk…..

Single Payer Single Payer Health Reform Health Reform

for Oregonfor OregonHow Bill Bradbury How Bill Bradbury Can Save Oregon’s Can Save Oregon’s

Economy and Economy and Become a National Become a National

Hero…Hero…

ResourcesResources http://www.localschooldirectory.com/state-schools/http://www.localschooldirectory.com/state-schools/

OROR State of Oregon Data: e-mail exchange withState of Oregon Data: e-mail exchange with Washington County Data: email exchange with Washington County Data: email exchange with

Valerie Weekly 3/30-3/31Valerie Weekly 3/30-3/31 Multnomah County Data: email exchange with Multnomah County Data: email exchange with

Caren Cox 3/26-29Caren Cox 3/26-29 Lane County Data: email exchange with Amber Lane County Data: email exchange with Amber

Fossen 3/26-4/2Fossen 3/26-4/2 Portland OR Data: email exchange with Cathy Portland OR Data: email exchange with Cathy

Bless and Vicki Arch 3/26-29Bless and Vicki Arch 3/26-29 Eugene OR Data: web site: Eugene OR Data: web site:

http://www.localschooldirectory.com/state-http://www.localschooldirectory.com/state-schools/ORschools/OR

ResourcesResources Peter J. Cunningham; The Growing Financial Burden Of Peter J. Cunningham; The Growing Financial Burden Of

Health Care: National And State Trends, 2001–2006;Health Care: National And State Trends, 2001–2006;Health AffairsHealth Affairs, (Published online March 25, 2010), (Published online March 25, 2010)

www.pnhp.orgwww.pnhp.org