Single Payer Health Care Reform Impact on State and Local Governments in Oregon Peter Mahr, MD PNHP Portland OR Chapter April 6 th, 2010

Our Current Non System We spend more than twice as much as the rest of the industrialized nations ($8,160 per capita) or 16% of GDP. We spend more than twice as much as the rest of the industrialized nations ($8,160 per capita) or 16% of GDP. We perform poorly in comparison on major health indicators such as life expectancy, infant mortality and immunization rates. We perform poorly in comparison on major health indicators such as life expectancy, infant mortality and immunization rates. Other advanced nations provide comprehensive coverage to their entire populations, while we leave 46.3 million completely uninsured and millions more inadequately covered. Other advanced nations provide comprehensive coverage to their entire populations, while we leave 46.3 million completely uninsured and millions more inadequately covered.

Our Current Non System The reason we spend more and get less than the rest of the world is because we have a patchwork system of for-profit payers. The reason we spend more and get less than the rest of the world is because we have a patchwork system of for-profit payers. Private insurers necessarily waste health dollars on overhead, underwriting, billing, sales and marketing departments as well as huge profits and exorbitant executive pay. Private insurers necessarily waste health dollars on overhead, underwriting, billing, sales and marketing departments as well as huge profits and exorbitant executive pay. Doctors and hospitals must maintain costly administrative staffs to deal with the bureaucracy. Combined, this needless administration consumes one- third (31 percent) of Americans’ health dollars. Doctors and hospitals must maintain costly administrative staffs to deal with the bureaucracy. Combined, this needless administration consumes one- third (31 percent) of Americans’ health dollars.

Current Solution Build on current system- subsidize purchase of private insurance Build on current system- subsidize purchase of private insurance Some new insurance regulation Some new insurance regulation State exchanges State exchanges Expand Medicaid Expand Medicaid Some delivery changes Some delivery changes Like Massachusetts Like Massachusetts

Massachusetts as the Example Uninsured improved Uninsured improved Underinsured a continuing problem Underinsured a continuing problem VERY EXPENSIVE!!! VERY EXPENSIVE!!!

Massachusetts: Required Coverage (Income > $31k) Premium: $4,800 Annually (56 year old) Premium: $4,800 Annually (56 year old) $2000 deductible $2000 deductible 20% co-insurance AFTER deductible is reached 20% co-insurance AFTER deductible is reached

Other Developed Nations 3 Necessities: 3 Necessities: A single system for everybody A single system for everybody No for-profit health insurance No for-profit health insurance No uninsured. Everybody in, nobody out. No uninsured. Everybody in, nobody out. Federal Reform: contains none of these. Federal Reform: contains none of these. Single Payer: contains all. Single Payer: contains all.

What About Single Payer? Financed by eliminating private insurers and recapturing their administrative waste. Financed by eliminating private insurers and recapturing their administrative waste. Modest new taxes would replace premiums and out-of-pocket payments currently paid by individuals and business. Modest new taxes would replace premiums and out-of-pocket payments currently paid by individuals and business. Costs would be controlled through negotiated fees, global budgeting and bulk purchasing. Costs would be controlled through negotiated fees, global budgeting and bulk purchasing.

What About Single Payer? Benefits: all Americans would be covered for all medically necessary services: doctor, hospital, preventive, long-term care, mental health, reproductive health care, dental, vision, prescription drug and medical supply costs. Benefits: all Americans would be covered for all medically necessary services: doctor, hospital, preventive, long-term care, mental health, reproductive health care, dental, vision, prescription drug and medical supply costs. Free choice of doctor and hospital. Free choice of doctor and hospital. Doctors regain autonomy over patient care. Doctors regain autonomy over patient care.

Single Payer and State Economies What do existing studies show (or… show me the money!) What do existing studies show (or… show me the money!)

Single Payer – Affordable Rhode Island November 2002: Rhode Island: Single Payer would save $270 million Cover 75,000 uninsured, improve access for many more. Source: (Sager, A.; Boston University School of Public Health; “Rhode Island Can Afford Health Care for All: A Report to the Rhode Island General Assembly” )

Single Payer – Affordable Missouri October 2003: Missouri Single- Payer would save $1.7 billion A single payer health care plan in the state of Missouri would reduce overall health care spending by about $3 billion. Source: ( Missouri Foundation For Health; “A Universal Health Care Plan for Missouri”; online: ://

Single Payer – Affordable Georgia June 2004: Single-Payer health would cover all Georgia residents and save $716 million annually. Nearly all Georgia families would pay less for health care than they are today for much better coverage. Source: (The Lewin Group, Inc. “The Georgia SecureCare Program: Estimated Cost and Coverage Impacts” Final report 10/21/03)

Single Payer- Affordable California SB Lewin Group: Reduction in overall health spending by $344 billion over 10 years 2005 Lewin Group: Reduction in overall health spending by $344 billion over 10 years Families with under $150,000 in annual income would, on average, see savings ranging between $600 and $3,000 per family. Families with under $150,000 in annual income would, on average, see savings ranging between $600 and $3,000 per family. Employers who currently offer health benefits would realize average savings of 16% compared to the current system. Employers who currently offer health benefits would realize average savings of 16% compared to the current system. Source: Lewin Group Report; “The Health Care for all Californians Act: Cost and Economic Impacts Analysis” Jan 19 th, 2005.

Single Payer – Affordable Kansas December, 2007: December, 2007: Single payer (“the Mountain plan”) would cover all the uninsured and reduce state health spending by $869 million annually. Single payer (“the Mountain plan”) would cover all the uninsured and reduce state health spending by $869 million annually. The other plans would cover a portion of the uninsured and would raise costs between $150 million to $500 million in the state. The other plans would cover a portion of the uninsured and would raise costs between $150 million to $500 million in the state. (

Single Payer- Affordable Colorado 2007 Lewin Group Study¹ 2007 Lewin Group Study¹ CHSP (single payer) would reduce spending by $1.4 billion. CHSP (single payer) would reduce spending by $1.4 billion. Primarily due to the reduction in costs of administering insurance under a uniform program of coverage for all state residents. Primarily due to the reduction in costs of administering insurance under a uniform program of coverage for all state residents. 1. Cost and Coverage Impacts of Five Proposals to Reform the Colorado Health Care System Lewin Group Study, 2007

Single Payer and State Economies What do existing studies show What about Oregon

City of Portland FY 2009 Health Care Costs: $65.9 million Health Care Costs: $65.9 million Number of Employees: 5,017 Number of Employees: 5,017 Total Payroll: not given, but assume $70,000/employee would be: $351 million Total Payroll: not given, but assume $70,000/employee would be: $351 million Health Care Costs Under Single Payer¹: $28.1 million Health Care Costs Under Single Payer¹: $28.1 million Savings Under Single Payer: $ 37.8 million Savings Under Single Payer: $ 37.8 million 1. Assuming 8% employer payroll tax as funding.

Lane County FY 2009 Health Care Costs: $21.2 million Health Care Costs: $21.2 million Eligible Employees: 1300 Eligible Employees: 1300 Total payroll: $76 million Total payroll: $76 million Health Costs as a Percentage of payroll: 28% Health Costs as a Percentage of payroll: 28% Savings Under a Single Payer Program¹: $15.1 million Savings Under a Single Payer Program¹: $15.1 million 1. Assuming 8% employer payroll tax

Washington County FY 2009 Health Care Costs: $20 million Health Care Costs: $20 million Number of Employees: 1760 Number of Employees: 1760 Total payroll: $114 million Total payroll: $114 million % of payroll Now: 17.5% % of payroll Now: 17.5% Health Care Costs Under Single Payer¹: $9.1 million Health Care Costs Under Single Payer¹: $9.1 million Savings Under Single Payer: $10.9 million Savings Under Single Payer: $10.9 million 1. Assuming 8% employer payroll tax

Multnomah County FY 2009 Health Care Costs: $55.5 million Health Care Costs: $55.5 million Number of employees: 4480 Number of employees: 4480 Total Payroll: $248.3 million Total Payroll: $248.3 million Health Care Costs as % of Payroll Now: 22% Health Care Costs as % of Payroll Now: 22% Health Care Costs Under Single Payer¹: $19.9 million Health Care Costs Under Single Payer¹: $19.9 million Savings Under Single Payer: $35.6 million Savings Under Single Payer: $35.6 million 1. Assuming 8% employer payroll tax

State of Oregon FY 2009 Health Care Costs: $598.6 million Health Care Costs: $598.6 million Number of Employees: 48,695 Number of Employees: 48,695 Health Care Benefit Staff Salary: $1.2 million Health Care Benefit Staff Salary: $1.2 million Total payroll: not reported yet, but if using $60,000 per year per employee: $2.9 billion. Total payroll: not reported yet, but if using $60,000 per year per employee: $2.9 billion. Health care Costs under Single Payer¹: $233.7 million Health care Costs under Single Payer¹: $233.7 million Savings with Single Payer: $365.3 million Savings with Single Payer: $365.3 million 1. Assuming 8% employer payroll tax for funding

OR State and Local Governments: A Summary Current Health Care Costs: $13,900 per employee Current Health Care Costs: $13,900 per employee % of payroll: (estimate assuming $60,000 a year for those not reporting payroll)¹: 19.2% % of payroll: (estimate assuming $60,000 a year for those not reporting payroll)¹: 19.2% Savings per Public Employee: $8,108 Savings per Public Employee: $8, Excluding lane County which was an outlier

Public Education in OR Total teachers: 32,626 Total teachers: 32,626 Cost Savings under Single Payer¹: $265 million Cost Savings under Single Payer¹: $265 million Teachers plus Staff: 45,093 Teachers plus Staff: 45,093 Cost Savings Under Single Payer¹: $365.6 million Cost Savings Under Single Payer¹: $365.6 million 1. From Previous Slide: $8,108 per public employee

Bill Bradbury The Education Governor How many new teachers could you hire with $365 million??? 6083

What Can a State Politician Do? Mandate a study of a single payer plan in OR as part of HB2009 Mandate a study of a single payer plan in OR as part of HB2009 Discuss the economic ball and chain of health care costs at every opportunity. Discuss the economic ball and chain of health care costs at every opportunity. Don’t be afraid of single payer! Don’t be afraid of single payer!

In November 2004, Canadians voted Tommy Douglas, Canada's "father of Medicare," the Greatest Canadian of all time following a nationwide contest sponsored by the CBC Tommy DouglasCBC Tommy DouglasCBC

Or maybe I should have titled this talk…..

Single Payer Health Reform for Oregon How Bill Bradbury Can Save Oregon’s Economy and Become a National Hero…

Resources State of Oregon Data: exchange with State of Oregon Data: exchange with Washington County Data: exchange with Valerie Weekly 3/30-3/31 Washington County Data: exchange with Valerie Weekly 3/30-3/31 Multnomah County Data: exchange with Caren Cox 3/ Multnomah County Data: exchange with Caren Cox 3/ Lane County Data: exchange with Amber Fossen 3/26- 4/2 Lane County Data: exchange with Amber Fossen 3/26- 4/2 Portland OR Data: exchange with Cathy Bless and Vicki Arch 3/26-29 Portland OR Data: exchange with Cathy Bless and Vicki Arch 3/26-29 Eugene OR Data: web site: Eugene OR Data: web site:

Resources Peter J. Cunningham; The Growing Financial Burden Of Health Care: National And State Trends, 2001–2006;Health Affairs, (Published online March 25, 2010) Peter J. Cunningham; The Growing Financial Burden Of Health Care: National And State Trends, 2001–2006;Health Affairs, (Published online March 25, 2010)Health AffairsHealth Affairs