Healthcare Dollars and Sense

In this blog I begin to discuss dollars and sense.

dollars-sense“The legislative text (“Medicare for All” proposal) won’t include a financing plan. Opponents of a single-payer system say it would require major tax increases and cost more than $30 trillion in its first decade. Supporters say it would save money by reducing the expected pace of U.S. health-care spending. Funding options include a so-called wealth tax and increasing the marginal tax rate.” (1)

If the critics indicate “major tax increases” equal $30 trillion/10 years, then the average yearly cost of a one- party payor system would be $3.0 trillion/year. How does this compare with our current total healthcare cost? U.S. health care spending grew 3.9 percent in 2017, reaching $3.5 trillion or $10,739 per person. Updated estimate for 2018 is $11,121 per person. (2) As a share of the nation’s Gross Domestic Product, health spending accounted for 17.9 percent. (3) That would be $3.65 trillion per year. (2)  Still looks like the critic’s best estimate of cost would be less than what we are currently spending now on a yearly basis.

I would remind you of the 28 evidence-based articles (4) available to support the ROI (return on investment) when it comes to the net impact on deficit reduction and the viability of the plan in terms of dollars and cents. The Political Economic Research Institute of the University of Massachusetts-Amherst anticipates that households and private businesses overall would pay 9.6 percent less on healthcare than they do today. (5)  How would that come about?

The use of healthcare would increase as people would see their physicians and dentists more frequently for example and that this would drive up expense by 12 percent. This would be balanced by a 9 percent decrease due to less need for system administration, 5.9 percent decrease due to lower prices on pharmaceuticals, 2.8 percent drop from uniform rates on the delivery side, and a 1 percent drop due to fraud and waste programs. Overall, the 12 percent increase in cost from utilization would be balanced by a 19 percent saving. If we apply that to the $3.65 trillion dollars which healthcare cost in 2018, there would be a reduction of $310+ billion.

Next time I will discuss the four choices we have for health care models.

Keep an eye out for my soon to be published book:  Earthquake: How America’s Ever-changing Healthcare System Victimizes Americans


  1. Armour, Stephanie and Kristina Peterson, “House Democrats Reveal Plan for Medicare for All,” Wall Street Journal Politics/Health Policy, 26 Feb. 2019,
  2. Herman, Bob, “The US spent $3.65 trillion on health care in 2018, and higher spending won’t slow down,” AXIOS, 21 Feb. 2019,
  3. gov Centers for Medicare and Medicaid Services,
  4. Hellander, Ida, “How Much Would Single Payer Cost? A Summary of Studies,” PNHP,
  5. Bump, Jesse B., “The long road to universal health coverage. A century of lessons for development strategy,” PATH, 19 Oct 2010,
By | 2019-03-26T11:07:52+00:00 March 26th, 2019|Categories: Healthcare|0 Comments

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