Yet in our state and country, the health care we receive is rationed by our ability to afford it rather than provided based on our medical need. Meanwhile, the financial burden for basic care is increasing with the rapid rise of high-deductible plans. And the dominance of employer-based insurance means that a change in jobs yields gaps in coverage, interruptions in care and disruption of the provider-patient relationship.
This sorry state of our health care system is again front-page news, as the Supreme Court weighs arguments it heard last week on the constitutionality of the Affordable Care Act (ACA). Many citizens are wondering what happens next as those necessary reforms hang in the balance.
Against this backdrop, I'm pleased to have collaborated recently with Growth & Justice, a Minnesota public-policy research organization, to produce a report that analyzes the economics of a redesigned health care system for Minnesota (www.growthandjustice.org/beyondaca). Together with the expertise of the Lewin Group, a highly regarded national consulting firm, we analyzed the benefits and costs of a unified and universal health care system for Minnesota, often known as "single-payer."
Here's what we found: If Minnesota adopted a unified system with a statewide risk pool, continuous coverage, a common benefit set, and uniform payment rates and reimbursement rules, the annual administrative savings would approach $5 billion. The negotiating clout of a single buyer could save Minnesotans nearly $1 billion on prescription drugs and medical equipment. And with a single claims administrator and the subpoena powers of a state program, we could reduce fraud and realize another $200 million in savings. Paying for the system with a progressive tax structure, rather than increasingly expensive premiums, would reduce average health care costs for all households, except for those in the very highest income brackets.
These combined savings are more than enough to offset both the increased utilization that would result from covering every Minnesotan, and the elimination of deductibles, coinsurance and most copays. In fact, even with a benefit package covering medical, dental, mental health, hospitalization, rehab, vision, hearing and prescription medications, a unified system would save us $4 billion overall in 2014, a 9 percent decrease in health spending. These savings would be achieved despite covering the additional 262,000 Minnesotans who are expected be left uncovered by the ACA.
How much is that in real money, for businesses and families?
The study estimates that, under one financing scenario, employers who currently offer insurance to their employees would save an average of about $1,200 per employee per year. Under the same scenario, an average family would save $1,240 on annual health spending. Those savings would compound over time, because a unified system can establish predictable financing and a global health care budget. With a unified system we could finally bend that cost curve that has been vexing businesses, consumers and governments for decades. The Lewin Group's projections estimate that the unified system would slow health spending growth, resulting in annual savings of 12 percent or more by 2023.
There are myriad ways to design a health care system, establish benefits and share costs, and there are countless financing alternatives. In fact, we see those variations among all the other wealthy democracies, but the basics are the same in any unified system: birth-to-death coverage, with the democratic government assuring affordability, transparency, equity and access.
Minnesota would not be alone among the states if it forged ahead to provide a universal and unified health system. Governors, legislatures and citizens groups are pushing similar reforms in Vermont, Montana, Oregon and Hawaii. And Minnesota Gov. Mark Dayton favored a universal system for Minnesota in his 2010 campaign.
To be sure, there would be implementation hurdles and political, legal and logistical challenges. Paying for health care with taxes instead of premiums, even if cheaper and fairer overall, will be resisted by antigovernment and antitax ideologues. And yes, sweeping change would create disruption, including the loss of some 42,000 jobs in the current health care bureaucracy. But studies have shown that those losses eventually would be made up by economic growth in other sectors that benefit from greatly reduced health care costs.
Surely few of us are satisfied with the way things are, or are convinced that the Affordable Care Act is the final reform, even if the U.S. Supreme Court upholds it. So let's hold onto the "unified and universal" option for Minnesota, with the knowledge that we can afford a system in which all newborns can be assured the essential human dignity of access to life-giving care, from the moment they enter the world until they draw their last breath.
Amy Lange, a registered nurse and certified nurse-midwife, is a policy fellow on health care for Growth & Justice, a research organization focused on expanding prosperity.