Tags: health | care | reform | cost

Healthcare Overhaul Needn't Break Bank: Study

Friday, 09 Jan 2009 08:10 AM

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CHICAGO — An analysis of proposals to overhaul U.S. healthcare by President-elect Barack Obama and members of Congress suggests it is possible to insure all Americans without raising total health spendingsignificantly .

About 46 million Americans, or about 15 percent of the population, have no health insurance. Although Americans pay more per person for care than any other industrialized country, many studies show they have poorer health, suffer more medical mistakes and are generally less happy with their medical care.

The report, which the Commonwealth Fund released Friday, suggests plans outlined by Obama and Senate Finance Committee Chairman Max Baucus could cover almost all Americans.

But to hit that mark, they would need to require all Americans to obtain coverage and include efforts to cut administrative costs and boost purchasing efficiencies.

"That type of plan can get close to universal coverage at a very modest increase in national expenditures," Sara Collins of the Commonwealth Fund said in a telephone interview.

Both the Obama plan and the Baucus plan call for a national insurance exchange to provide coverage to millions of uninsured Americans, but Baucus' plan eventually would require everyone to have health insurance.

Collins and colleagues analyzed the pros and cons of both plans and other leading health reform plans Congress put forth to extend health insurance coverage.

"If you are a policymaker and you are trying to decide how to expand coverage to most people, these offer different paths to go on," Collins said.

With the nation facing a poor economic outlook, cost-saving measures become paramount.

"The really important numbers are the effects on national health expenditures. Ultimately, that determines the growth of the national healthcare budget," she said.

The plan that offers the greatest potential to ensure health coverage for all is proposed by Rep. Pete Stark, a Democrat from California, which would broaden access to Medicare.

It would cost the federal budget $188.5 billion in 2010 but would cut national health spending by $58.1 billion by covering more people under Medicare, which has far lower administrative costs than private insurance plans.

Collins said the type of plan Obama and Baucus have proposed would increase national expenditures by $17.8 billion in the first year.

"That is just 1 percent of the $2.2 trillion we spend (on healthcare) overall as a country," she said.

Her spending estimates are based on a cost analysis by the Lewin Group of a plan called Building Blocks proposed by The Commonwealth Fund that mirrors most elements of the Obama and Baucus plans.

A study by PriceWaterhouseCoopers last fall estimated the Obama plan would cost $75 billion in the first year, and would provide health coverage for 95 percent of Americans.

© Thomson Reuters 2009 All rights reserved

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