This page describes two
important studies (the most recent is first) that
have been made in California over the past few years.
We offer a brief analysis of The Lewin Report and
the Health Care Options Project on this page.
For the complete reports,
as well as a report by Insurance Commissioner John
Garamendi, please download these reports:
The
Health Care For All Californians Act: Cost and
Economic Impacts
The Lewin Group, January 19,
2005
The Lewin Group
was commissioned by the HCA-CA Education Fund
to study the economics of SB 921. The study
was conducted during the year 2004.
You can download
the whole Lewin report
or a summary. You
may also wish to review several charts
prepared by the Lewin Group.
Here
are some of the key findings.
Significant
savings in total health spending in California
would be achieved through a single insurance
plan. In the first year of the plan, almost
$8 billion would be saved.
The savings in administrative
costs (about $20 billion in the first
year) would help pay for both the uninsured
and underinsured. The approximately 25%
of healthcare costs that is spent on administration
would be reduced to about 4% (similar
to Medicare's administrative costs.) All
components of administration would save
significantly.
Businesses now prividing
insurance for more than 80% of their
employees would realize an average savings
of 16% compared to what they pay today.
There is actually a wide range of savings
among business, in part depending upon
the number of employees. (Caution: these
projections are based on a particular
set of data that may or may not hold
for the final version of the legislation.)
Families would save on
average $340 per year under this new plan.
The following chart breaks the savings
down for age groups.
Families whose annual income
is less that $150,000 would save between
$400 and $3,000 in the first year. Families
with incomes higher than $ 150,000 would
pay more.
The Lewin Group
study projected costs of healthcare for ten
years. Under the current system, costs would
grow at a greater pace than they would under
a single insurance fund. By the end of the
ten year period, Californians would save a
total of $344 billion with the new plan.
Health Care
Options Project
The Lewin Group, 2002
The State of California's recent
health care study, the Health Care Options Project
(HCOP), conducted by the California Health and
Human Services Agency (CHHS), demonstrated that
a publicly funded and administered universal
health insurance program (also knows as single
payer) will save billions of health care dollars
and provide the necessaryfunding for universal
health care.
Delivery of health care services
would still be provided as it currently is through
both public and private providers.
California can afford full benefits
to all residents by replacing inefficient multiple
insurance company health plans with a single
efficient publicly administered plan for everyone.
The results
of the HCOP study were stunning. In graph
form, it shows the difference is costs
between single payer financing and other
reforms.
The leading author stated:
“Under all of the plans
here, there is an increase in costs, reflecting
the fact that you'd have more insured people using
more health services…. But …under the
single payer program, we show that there is a
net reduction in spending. We actually spend less,
in the aggregate, on health care. The reason for
this is that there are very large administrative
savings that are realized through using a simple,
single program to pay for health care. There are
also some bulk purchasing savings which we believe
could be quite substantial.” - John Sheils,
The Lewin Group. Concluding remarks on the micro-simulation
of the nine health care reform proposals, Healthcare
Options Symposium, Sacramento, April 12, 2002
The AZA
Consulting Group assessed the differences
in quality of healthcare and found the single
payer plan to be the most beneficial.
