America’s broken health care system is based on two inseparable problems. First, costs of health are rising astronomically. The share of income allocated to health care has increased from 7% in 1970 to 15% today and rising costs are squeezing the public funds that could be going to education and infrastructure. The second problem is that a growing number of Americans are uninsured. Even before the Great Recession, the share of non-elderly adults without adequate health insurance rose from 35% to 42%, reaching 75 million. Of course, that number has increased further with the unemployment rate hitting 9.1% in 2011 and employer-provided health care benefits shrinking in general (see our Economic Find: Dwindling Health Benefits).
The smartest way to lower health care costs and ensure that people get the health care they need is to move to a single-payer health-insurance program with universal coverage. It would simultaneously save money and improve care by fostering better coordination of care among different providers and by providing a continuity of care that is impossible with a system of competing insurance plans.
Gerald Friedman, University of Massachusetts, Amherst Professor and CPE Staff Economist has estimated that in Massachusetts, a state with a fairly efficient health-insurance system, it would be possible to lower the cost of health care by almost 16% by instituting a single-payer health system. Check out the table below for his results.
For more of Friedman’s discussion on universal health care, see Universal Health Care: Can We Afford Anything Less?
Created by CPE Member Economist Sue Holmberg
November 2011
Source:
Friedman, Gerald. “Universal Health Care: Can We Afford Anything Less?” Dollars and Sense. http://www.dollarsandsense.org/archives/2011/0711friedman.html
