Seventy years ago, George Orwell explained why so many bad ideas are unquestioningly accepted and advocated by the left: “At any given moment there is an orthodoxy, a body of ideas which it is assumed that all right-thinking people will accept without question. It is not exactly forbidden to say this, that or the other, but it is ‘not done’ to say it.” This is precisely why the Urban Institute (UI) is under attack from Bernie Sanders supporters and other progressives. The left-of-center think tank recently released a study that says the unsayable — Medicare for All is an unaffordable fantasy.
Medicare for All is the single-payer health care system that most progressives support as a replacement for Obamacare. Sanders, the Vermont senator who is ostensibly running against Hillary Clinton for the Democrat presidential nomination, has made it the centerpiece of his campaign. His website assures us that “Bernie’s plan” will save the country $6 trillion over the next ten years, but UI committed the sin of checking the math, and the study’s authors are not feeling the Bern: “[N]ational health expenditures would increase … by 6.6 trillion (16.6 percent) between 2017 and 2026.”
And this is just a drop in the bucket compared to how much it will increase the government’s health spending: “The increase in federal expenditures would be considerably larger than the increase in national health expenditures because substantial spending borne by states, employers, and households under current law would shift to the federal government under the Sanders plan.” How much larger? “In total, federal spending would increase by about $2.5 trillion (257.6 percent) in 2017. Federal expenditures would increase by about $32.0 trillion (232.7 percent) between 2017 and 2026.”
These hair-raising figures have caused considerable outrage among Sanders supporters. Despite a long history of advocating progressive government programs, UI has been the target of numerous denunciations for the thought crime of questioning the viability of Medicare for All. The most belligerent appeared in the Huffington Post, where single-payer zealots Steffie Woolhandler and David Himmelstein castigated UI for its “ridiculous” report. These particular critics are the co-founders of Physicians for a National Health Program (PNHP) which has agitated for single payer health care since 1987.
It’s deliciously ironic that Woolhandler and Himmelstein condemn the authors of the UI study as “biased.” They and their organization are notorious for publishing hopelessly tendentious “research.” One of their most preposterous efforts was a 2009 study that made the following assertion: “Lack of health insurance is associated with as many as 44,789 deaths per year in the United States.” This claim was widely panned at the time by health policy experts, including John Goodman of the National Center for Policy Analysis, who debunked PNHP’s methodology at the Health Affairs blog.
Their lack of credibility notwithstanding, it’s useful to examine the complaints that Woolhandler and Himmelstein have about the UI study because they echo widely held myths about Medicare for All. One of their objections, for example, is that the study estimates the administrative costs of the Sanders plan at 6 percent. This violates single-payer orthodoxy, which holds that such costs for traditional Medicare are only 3 percent, and that Medicare for All would enjoy equally low overhead. Woolhandler and Himmelstein fault the UI study because it fails to use this long-ago-debunked percentage.
They also claim that UI “ignores the huge savings on hospital administration and doctors’ billing under a streamlined single-payer system.” In reality, federal regulations created most of the administrative costs endured by doctors and hospitals. Just to scratch the surface, the Medicare claims manual is over 120 thousand pages long, the Health Information Portability and Accountability Act imposed billions in technological costs with its claims transmission requirements (unrelated to privacy), and the 2009 Hitech Act added billions more pursuant to its “meaningful use” rules.
Another issue that Woolhandler and Himmelstein have with the study is that it projects drug costs at a level that fails to incorporate the magical thinking that characterizes the projections of single payer advocates everywhere. Ignoring that the study assumes the Sanders Medicare for All plan would pay 25 percent less than current Medicare levels, they complain that the study “projects that a single-payer plan would have to pay 50 percent higher drug costs than those paid at present by Medicaid… despite the fact that a U.S. single-payer system would have much greater negotiating leverage with drug companies.”
Finally, Woolhandler and Himmelstein claim that UI postulates a “huge surge in utilization.” This seems reasonable considering that Sanders claims his plan will cover 29 million Americans who “still do not have health insurance.” Yet they discount the UI estimates because “there just aren’t enough doctors and hospital beds to deliver that much care.” They go on to say that these care providers “would reduce the amount of unnecessary care they’re now delivering in order to deliver needed care to those who are currently not getting what they need.” In plain English, this is called “rationing.”
UI answered its critics a couple of weeks ago by providing a simplified explanation of its projections. The response from Woolhandler and Himmelstein was even more vicious than their original rant, claiming that it is “riddled with distortions, misinterpretations and glaring factual errors.” The real problem, of course, is that the Urban Institute has failed to fall in line with progressive orthodoxy. UI is a liberal outfit, but the math is the math, even if Bernie’s supporters can’t handle the truth.
Medicare for All is an unaffordable pipedream, and the authors of the Urban Institute study simply refuse to say otherwise.