News Release

Urban Institute Attack on Sanders’ Medicare-for-All Plan is “Ridiculous”

US Democratic presidential candidate Bernie Sanders speaks during a rally in Atlantic City, New Jersey, on May 9, 2016. / AFP / Jewel SAMAD        (Photo credit should read JEWEL SAMAD/AFP/Getty Images)

STEFFIE WOOLHANDLER, M.D., via Mark Almberg,  mark at pnhp.org, @PNHP
Dr. Woolhandler co-founded Physicians for a National Health Program, which does research and advocacy for single-payer health care, but does not endorse candidates. She is a professor at City University of New York at Hunter College who sees patients in the South Bronx. Almberg is communications director for PNHP.

She just co-wrote the piece “The Urban Institute’s Attack On Single Payer: Ridiculous Assumptions Yield Ridiculous Estimates,” which states: “The Urban Institute and the Tax Policy Center [Monday] released analyses of the costs of Sen. Bernie Sanders’ domestic policy proposals, including single-payer national health insurance. They claim that Sanders’ proposals would raise the federal deficit by $18 trillion over the next decade.” This report has been covered by NPR, CBS News, PBS, Bloomberg, the Washington Post and other major media.

Woolhandler writes: “To put it bluntly, the estimates (which were prepared by John Holahan and colleagues) are ridiculous. They project outlandish increases in the utilization of medical care, ignore vast savings under single-payer reform, and ignore the extensive and well-documented experience with single-payer systems in other nations — which all spend far less per person on health care than we do.

“The authors’ anti-single-payer bias is also evident from their incredible claims that physicians’ incomes would be squeezed (which contradicts their own estimates positing a sharp rise in spending on physician services), and that patients would suffer huge disruptions, despite the fact that the implementation of single-payer systems elsewhere, as well as the start-up of Medicare, were disruption-free.

“We outline below some of the most glaring errors in the Holahan analysis (which served as the basis for Tax Policy Center’s estimates) regarding health care spending under the Sanders plan.

1. Administrative savings, Part 1: Holahan assumes that insurance overhead would be reduced to 6 percent of total health spending from the current level of 9.5 percent. They base this 6 percent estimate on figures for Medicare’s current overhead, which include the extraordinarily high overhead costs of private Medicare HMOs run by UnitedHealthcare and other insurance firms. However, Sen. Sanders’ proposal would exclude these for-profit insurers, and instead build on the traditional Medicare program, whose overhead is less than 3 percent. Moreover, even this 3 percent figure is probably too high, since Sanders’ plan would simplify hospital payment by funding them through global budgets (similar to the way fire departments are paid), rather than the current patient-by-patient payments. Hence a more realistic estimate would assume that insurance overhead would drop to Canada’s level of about 1.8 percent. Cutting insurance overhead to 2 percent (rather than the 6 percent that Holahan projects) would save an additional $1.7 trillion over the next 10 years. …”