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Universal Single-Payer Healthcare Coverage: An Economic Stimulus Plan

by Stephen Lendman
Wednesday, 18 November 2009

If Obamacare is enacted, it will cost more, deliver less, leave millions uninsured, millions more underinsured and leave a broken system in place. It will enrich the insurance, drug and large hospital chain cartels at the expense of universal coverage.

The Institute for Health & Socio-Economic Policy (IHSP) is "non-profit policy and research group and is the exclusive research arm of the California Nurses Association/National Nurses Organizing Committee, (focusing on) current political/economic policy analysis in health care and other enhance, promote and defend the quality of life for all."

In January, it released a "First-of-Its Kind Study" titled, "Single Payer/Medicare for All: An Economic Stimulus Plan for the Nation" to reform the system by providing universal care, adding productive new jobs, billions in public and private revenues, billions more in employee compensation, and added tax revenues. More on that below.

IHSP calls its study an "econometric," not an "arithmetical" health care system analysis, covering both their costs and economic benefits to the nation. Its methodology drew on:

"widely-used and accessible data bases and econometric models which are capable of showing how changes in one economic variable (such as health demand, pricing of services, or taxation of consumers and employers) will affect not only the health care sectors directly, but also their suppliers....their employees and their households, and the generation of federal, state, and local taxes."

Elements of its comprehensive coverage include:

Indirect Transactions/Activity

These occur when providers buy services or supplies to deliver care:

Induced Transactions

These are health care worker household consumption transactions, and the indirect sector spending their income:

Total Revenue Generation

IHSP "calculated the economic multiplier to be 2.78, nearly three times the revenues generated within the industry proper." Total direct and indirect health care revenue is $5.856 trillion.

Tax Revenues Generated



Health service industries include 511 occupations, 43% in management, administration, finance, physical plant operations, and many other non-health related fields. Registered nurses number about 2.1 million, about 25% of health care professionals. Nursing aides, orderlies, attendants and home health aides comprise another 25%. Doctors are 3% of the total.

Initial Findings

Medicare for all, including Part D will generate:

Enhanced Medicare for All

Covering the Uninsured

For a net total spending increase (net of the eliminated costs for the uninsured) of $44 billion "in 2006 values," a $120 billion in economic impact will be generated, 945,600 new jobs will be created earning $36.5 billion, and $16.5 billion in taxes will be raised. In addition, the formerly uninsured will pay a small premium above their current expense, but will get greatly enhanced care. Providers will also reduce losses because of non-payments, and emergency rooms will function as intended.


The current system is fragmented, inconsistent, expensive, and fails to provide the full range of preventive and routine care. Discontinuing it at the federal and state levels will generate a "total net direct economic impact" of $16.2 billion dollars breaking down as follows:

Total economic activity will increase by $43 billion. About 336,900 new jobs will be created generating $14.3 billion annually, and tax revenue increases of $6.3 billion.

Medicare Coverage for the Privately Insured

It will bring 196.1 million new enrollees into the new program, standardize their coverage, replace the above enumerated problems, and eliminate an onerous burden on employers that paid (in 2006) 71% of insurance premiums, or $510 billion annually. Burdensome administrative costs will also be eliminated, an estimated $56 billion.

The net effect will shift an employer obligation to public funding and not increase national health costs. It will require more public administrative capacity, and possibly a new or revised tax structure to replace the current privately-financed system.

An Overview of the Health Care Industry

Providers include hospitals, physicians and other health care professionals, nursing care, home health care, ambulatory health services, laboratories and testing facilities, and others. They're closely linked to pharmaceutical, medical equipment, and other producers and suppliers.

Employer-provided coverage is the largest funding source. Privately insured households pay deductibles, or co-pays, and often part of the insurance premium. Taxpayers are the second largest funding source, through federal, state, and local health care programs, including Medicare, Medicaid, and others.

IHSP's report includes a detailed analysis of US health care in 2006, including the composition of the industry, its share of the economy, and the full, direct and indirect, impact that health care activities have on other economic sectors.


IHSP's study concludes that:

"a comprehensive Medicare based Single Payer system can make significant contributions to access of quality care for all US residents and in the process generate a much needed and very substantial economic stimulus in the form of jobs, enhanced business and public revenues and increased wages for the population at large." All this for a small net $63 billion increase yielding much more in benefits.

According to Geri Jenkins, co-president of the National Nurses Organizing Committee/California Nurses Association (NNOC/CNA):

IHSP's analysis shows "for the first time that a single-payer system could not only solve our healthcare crisis, but also substantially contribute to putting America back to work and assisting the economic recovery."

The study's lead author and director of the Institute for Health and Socio-Economic Policy (the NNOC/CNA research arm), Don DeMoro, added:

"If we were to expand our present Medicare system to cover all Americans, the economic stimulus alone would create an immense engine that would help drive our national economy for decades to come."

All for a tiny fraction of the Wall Street bailouts that looted the federal Treasury, gravely harmed the country, and delayed for a future time a far more serious day of reckoning.

Physicians for a National Health Program (PNHP) Support for Universal Single-Payer Coverage

PNHP calls the current system "outrageously expensive, yet inadequate" because of the 50 million or more uninsured and another 30 million or more underinsured. It spends more and delivers less through:

"a patchwork system of for-profit payers. Private insurers necessarily waste health dollars on things (unrelated to care): overhead, underwriting, billing, sales and marketing (plus) huge profits and exorbitant executive pay. Doctors and hospitals must maintain costly administrative staffs to deal with the bureaucracy (consuming nearly one-third) of Americans' health dollars." The potential savings from single-payer financing is "more than $350 billion per year....enough to" cover everyone at no more than the current cost and perhaps less depending on services provided and if government negotiates lower drug prices the way other countries do.

Consider the benefits - single-payer will cover "all medically necessary services, including: doctor, hospital, preventive, long-term care, mental health, reproductive health care, dental, vision, prescription drug and medical supply costs. Patients" will have free choice of providers, and doctors will "regain autonomy over patient care," no longer restricted by insurance company gatekeepers. Overall, health care in America will achieve a quantum leap improvement compared to the dysfuntional state it's now in, worse still if Obamacare passes.

"HR 3962: Affordable Health Care for America Act" - The Public Betrayal Act to Enrich the Insurance, Drug, and Large Hospital Chain Cartels

On November 7, by a narrow 51 - 49% majority, the House passed legislation former CIGNA executive, now critic, Wendall Potter calls "the Insurance Company Profit Protection and Enhancement Act." Add the drug and hospital chain cartels that will profit hugely if it's enacted.

Voting for it - 219 Democrats and one Republican. Against it were the remaining Republicans and 39 Democrats.

Among its supporters were cosponsors of "HR 676: United States National Health Care Act or the Expanded and Improved Medicare for All Act," including universal single-payer advocates:

Dennis Kucinich (D. OH) explained "Why I Voted No," saying:

The current "for-profit insurance system....makes money (by denying) health care." HR 3962 strengthens the source of the problem. "Clearly, the insurance companies are the problem, not the solution. They are driving up the cost of health care." They're the reason why "31 cents of every health care dollar goes to administrative costs, not toward providing care. Even those with insurance are at risk. The single biggest cause of bankruptcies in the US is health policies that do not cover you when you get sick."

Instead of fixing the problem, HR 3962 "accelerate(s) the privatization of health care. (It) inevitably will lead to even more costs, more subsidies, and higher profits for insurance companies - a bailout under a blue cross. (The bill) continues the redistribution of wealth to Wall Street at the expense of" Americans getting the kind of health care they deserve and badly need.

Former president of Physicians for a National Health Program, Dr. John Geyman, cited HR 3962 saying "No Bill is Better Than a Bad Bill" in enumerating its negatives, including:

"In sum, this (monster won't) fix the major problems of cost and affordable access. (It) will add new layers of bureaucracy and complexity, is not fiscally responsible, and is not sustainable."

Debate now shifts to the Senate where the best outcome will be killing Obamacare because "no bill is better than a bad" one.

The California Nurses Association (NSA) said the following:

"This Bill Fails to Control Costs." While providing "limited assistance for some, the inconvenient truth is (it falls) far short in effective controls on skyrocketing insurance, pharmaceutical and hospital costs, (does) little to stop insurance companies from denying needed medical care recommended by doctors, and (provides) little relief for Americans with employer-sponsored insurance worried about health security for themselves and their families." And the Senate legislation is even worse.

The National Organization for Women said the "Bill Obliterates Women's Fundamental Right to Choose" that became law in the landmark 1973 Roe v. Wade decision, and is still the law of the land. The Court held that a woman may abort her pregnancy for any reason, up to when "the fetus becomes viable."

HR 3962 violates that right. Except in cases of rape, incest, or if a woman faces death, the Stupak (D. MI) amendment prohibits using federal money for insurance covering abortion. It prevents women participating in insurance exchanges from using their own money to buy abortion coverage. It denies low-income women access to it entirely.

According to the Congressional Budget Office (CBO), it:

Pre-existing condition exclusions will be prohibited, but insurers may charge what they wish, so effectively nothing changes. Endorsing the bill:

The Centers for Medicare & Medicaid Services' (CMS) Assessment of Medicare Cuts Under HR 3962

On November 13, CMS released estimates of the "costs, savings, and coverage impacts" of HR 3962, showing Medicare spending will be cut by a draconian $570.6 billion, well above the CBO figure. Enrollees unable to cover the difference will be devastated. Millions will get less care when they most need it. In some cases, hospitals and nursing homes may deny it altogether.

Medicare will introduce "permanent annual productivity adjustments to price updates for institutional providers" to maximize "efficiency" - costing $282 billion, over half the total cuts. They'll affect acute care hospitals, nursing facilities, and home health agencies, and be based on economic productivity overall, but CMS notes that:

"Except in the case of physician services, we are not aware of any empirical evidence demonstrating the medical community's ability to achieve productivity improvements equal to those of (the) overall economy."

As a result, provider costs will rise faster than Medicare payment increases. They, in turn, will reduce care or opt out of the program altogether. Many providers have done it because of low compensation. CMS states:

"Providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and might end their participation in the program (possibly jeopardizing access to care for beneficiaries)."

Medicaid eligibility will also be impacted, threatening access for millions of poor people, dependent on it as their sole source of care. Although HR 3962 increases spending by $77.5 billion to cover the cost of new enrollees, CMS says higher demand may cause providers:

"to accept more patients who have private insurance (with relatively attractive payment rates) and fewer Medicaid" ones because it won't be cost effective to do it.

Physicians for a National Health Program (PNHP) on Myths and Facts about a Public Option

Myth: More choice.

Fact Check:

Provider and location choices will be limited. Seeking care outside networks will cost more, and authorization will still be required.

Myth: Patients may keep their doctors regardless of employment changes or health.

Fact Check:

The employer-based system stays intact. If a new plan is chosen, only doctors in it may be accessed. Patients retaining their own will incur higher out-of-network fees. Insurers may also cherry pick the healthy and avoid the sick. Patients becoming ill risk losing employer-based coverage or face higher premiums to keep it.

Myth: Private insurers will have to compete on a level playing field.

Fact Check:

HMO's "undermine fair competition despite regulations." They "cherry-pick" the healthy and avoid the high-risk. They also cost up to 19% more than traditional Medicare despite their lower age category enrollees.

Myth: Everyone will have quality, affordable care.

Fact Check:

The current system is unsustainable. It will worsen if Obamacare passes. In whatever form, the "international experience with public option schemes" shows they don't provide universal coverage - because insurers pick the best and screen out the rest.

Myth: Patients will get better care because of "innovation in the quality care physicians provide."

Fact Check:

Quality won't improve. Today's dysfunctional system won't change. It's driven by profits, high costs, and for insurers denying expensive care or delaying it as long as possible.

Myth: Cost will be reduced.

Fact Check:

False because no provider bureaucracy savings will be achieved. "Adding a public option to the array of private insurance companies....will only exacerbate the waste and inefficiency inherent in a patchwork system...."

Final Comments

Health care is a fundamental human right no different than food, shelter, clothing, clean air and water, and other essentials to life and well-being, not something to be bought and sold as a commodity. Universal single-payer coverage is the solution, not America's dysfunctional for-profit model.

If Obamacare is enacted, it will cost more, deliver less, leave millions uninsured, millions more underinsured and leave a broken system in place. It will enrich the insurance, drug and large hospital chain cartels at the expense of universal coverage. It will solidify a class-based system delivering the best care money can buy. Others will get sub-standard treatment, and for millions none at all. The solution is everybody in, nobody out under a universal, single-payer system. No one should accept less or politicians who won't provide it.

Steve Lendman

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at

Also visit his blog site at and listen to The Global Research News Hour on Mondays from 11AM to 1PM US Central time for cutting-edge discussions with distinguished guests on world and national topics. All programs are archived for easy listening.

Mr. Lendman's stories are republished in the Baltimore Chronicle with permission of the author.

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This story was published on November 18, 2009.