Healthcare4AllPA released an anticipated economic impact study today showing huge savings for Pennsylvania, significant employment gains and a healthier, more productive workforce should it adopt a single payer system of health care. The study was done by Gerald Friedman an economist at the University of Massachusetts. It says the Pennsylvania Health care Plan, if implemented, would save every Pennsylvanian $1,000/year in health care costs. It would provide blanket care including dental, prescriptions, vision and home health care with no deductibles or co-payments. Health care spending in the Commonwealth is increasing at an unsustainable rate and the percentage of those without care is now at 11%.
Personal health care spending has been rising at an unsustainable pace in Pennsylvania, more than doubling between 1997 and 2012 (see Figure 1). Health care costs have risen faster than income, raising the share of health care in the Pennsylvania economy from 14 percent of state income in 1997 to over 19 percent in 2012 (see Figure 2). Health care cost inflation is squeezing disposable income for Pennsylvanians. Had health care spending per person risen only as fast as the consumer price index, then spending would be 37% less, saving the average Pennsylvanian over $3000 (see Figure 1). Had health care spending remained at the 1997 share of income, the average resident of Pennsylvania would have spent over $2300 less on health care, or over $9000 less for a family of four in 2012.
Under the Plan every Pennsylvanian would be covered and monies currently being expended by Medicare, Medicaid, the Veterans Administration, private companies purchasing health insurance and state and local governments would combine with a 10% payroll tax and a 3% personal income tax would provide enough money to cover everyone with $1.1 billion left over. Cost savings from the current system is sufficient to cover every single person with fully comprehensive care.
According to the study this would provide a healthy, productive workforce, make the Commonwealth extremely attractive to businesses and employers and save them tremendous amounts in overhead currently diverted to health management. It then would free businesses to focus on their core business functions.
Overall health care spending in Pennsylvania would fall from $144 billion to $128 billion a savings of 11%. It predicts job growth of 226,000 jobs as a result of such legislation passing the state legislature.
Seeing the specific numbers causes one to wonder how anyone in state government could oppose such a plan. The savings for state and local governments alone is huge and when combined with the job numbers, the improved health of the state’s population and the fact it solves a major problem within the state this is a no brainer.
The Pennsylvania Plan would produce substantial health and economic gains for Pennsylvania. The new system would create such large economies in the administration of health care that all of those currently uninsured could be given access to health care with money left over. Furthermore, by financing health care with taxes linked to income, the Pennsylvania Health Care Plan would produce large savings for the great majority of Pennsylvania residents. Finally, by reducing business costs, it would also lead to expansion in employment.