>>> We identified 22 credible economic models of the cost of single-payer financing in the US, from a variety of government, business consultant, and academic organizations. We found that 19 (86%) predict net savings in the first year of operations, with a range from 7% higher net cost to 15% lower net cost. Increases in cost due to improved insurance coverage and thus higher utilization were 2% to 19%. Savings from simplified payment administration at insurers and providers, drug cost reductions, and other mechanisms ranged from 3% to 27%. The largest net savings were for plans with reductions in drug costs. Net savings accumulate over time at an estimated 1.4% per year. Of note, we excluded 2 widely publicized studies [20,24], both of which found net costs, on the grounds that these studies made assumptions that included private insurance intermediaries (i.e., not a single-payer) or lacked technical detail for evaluation.
>>> These analyses suggest that single-payer can save money, even in year 1, incorporating a wide range of assumptions about potential savings. More aggressive measures to realize cost reductions are projected to yield greater net savings. This implies that concerns about health system cost growth with single-payer may be misplaced, though costs to government are likely to grow as tax-based financing replaces private insurance premiums and out-of-pocket spending.
>>> These analyses suggest that single-payer can save money, even in year 1, incorporating a wide range of assumptions about potential savings. More aggressive measures to realize cost reductions are projected to yield greater net savings. This implies that concerns about health system cost growth with single-payer may be misplaced, though costs to government are likely to grow as tax-based financing replaces private insurance premiums and out-of-pocket spending.