The Congressional Budget Office's highly anticipated report released Wednesday largely put a damper on the idea of a U.S. single payer healthcare system.
While the office didn't present a formal cost estimate, the analysis laid out ideas policymakers should consider as they design a potential single payer universe.
Specifically, the CBO issued familiar warnings that a single payer system could increase demand and overtax hospitals and clinicians while imposing hefty new costs. The report also echoed hospital arguments that adoption of universal Medicare fee for service rates for hospitals would "probably reduce the amount of care supplied and could also reduce the quality of care."
Independent analyses have put the price tag of single payer at roughly $32 trillion over a decade.
Yet in highlighting the potential economic disruption of a single payer overhaul, the CBO pointed to one of the key reasons Medicare for All is gaining traction: the costs in the status quo.
"Because healthcare spending in the United States currently accounts for about one-sixth of the nation's gross domestic product, those changes could significantly affect the overall U.S. economy," the report said.
Its release came on the heels of a high-profile House committee hearing on Medicare for All.
Throughout the analysis, the CBO showed reasons for the current costliness. For instance, the office found that in 2013 the "three major insurers" paid hospital rates that were 89% higher on average than Medicare rates for the same services.
Additionally, the federal government's administrative costs for Medicare were about 1.4% of total Medicare expenditures in 2017. For Medicare Advantage and Part D plans, administered by commercial insurers, those costs rose to 6% of total expenditures.
For commercial insurers, those expenditures averaged about 12% of total costs.
The CBO said that the projected administrative savings could be one of the "opportunities" of developing a single payer system. The report also said the system would have more incentive to invest in preventive medicine and improve overall population health if it could eliminate the turnover seen in the employer and individual markets.
"Whether the single-payer plan would act on that incentive is unknown," CBO analysts wrote.
The CBO's report also argued the benefits of expanding coverage using the Affordable Care Act model of guaranteed issue, heavily regulated insurance markets and an individual mandate, which is effectively gone with the 2017 tax bill.
Many elements of the report will likely be embraced by industry, which is pushing for policies to build on subsidies for the ACA, particularly as it comes while momentum is building for Medicare for All. This policy has remarkably and rapidly taken hold among Democrats in Washington over the past few months although House Speaker Nancy Pelosi (D-Calif.) has stayed focused on ACA-building proposals.
After the report's release Chip Kahn, CEO of the Federation of American Hospitals that represents investor-owned health systems, said the analysis "raises sobering questions."
"But what needs to be asked, is it worth the risk of upending healthcare for every American when the law on the books already contains a roadmap to universal coverage?" Kahn said. "Instead of such a high stakes gamble, lawmakers should build upon the current foundation so we can continue to improve quality and affordability for families across the country."
Single payer advocates have embraced the same points made in the CBO report about administrative costs, insurance industry costs and poor general population health despite the expense of the U.S. system.
These arguments were a key part of testimony in Tuesday's Medicare for All hearing by the House Rules Committee.
Dr. Doris Browne, a retired military medical officer and immediate past president of the National Medical Association representing black physicians and their patients, argued that a universal coverage option would force widespread adoption of preventive medicine, which has so far baffled the U.S.
"I think you would practice medicine in a more appropriate way, increase the educational components and practice prevention," Browne told the committee. "If you put prevention into practice, you're not going to have many of these hospitalizations that end up in the ICU. We have not practiced prevention. We have been talking about it for years and years and it has gone by the wayside."
New York City emergency physician Dr. Farzon Nahvi also homed in on these arguments before the committee, using personal anecdotes from the treatment room to advocate for single payer.
In one instance, he said he treated a woman who had overdosed on fish antibiotics she bought from a pet store to manage a fever, as she didn't think she could afford seeing a doctor. The overdose affected her brain, and she fell down a staircase and was rushed to the emergency room.
In another story, a patient who had a urinary infection treatable with antibiotics couldn't get her insurer to cover the $300 medicine. She bought cranberry juice instead only to come to the emergency room with sepsis from a subsequent infection — costing thousands of dollars.
"We're paying more for bad outcomes, and that needs to be part of the discussion too," Nahvi said. "There's no way to account for what we're seeing on the ground level."
The Medicare for All debate has heated up simultaneously with an alternative measure to consolidating and capping costs. Last week the Trump administration unveiled an ambitious proposal to cap traditional Medicare spending through direct contracting with health systems and others.
