Medicare-for-All Downstream Benefits

Beyond the obvious administrative benefits covered by Sally Primus, MD, Medicare-for-All offers many downstream benefits often ignored when calculating M4A savings.

As a practicing ophthalmologist, Primus got tired of watching patients struggle with our expensive and hard to navigate healthcare system. So, she’s been studying, speaking and writing about what’s wrong with American healthcare and right in other countries while also thinking about what we should do here. She starts with What IS Medicare-for-All.

Administrative benefits

Yes, moving to a single-payer system like Medicare-for-All would eliminate the administrative costs of working with multiple private insurers. That’s why the health insurance industry argues they can do better, but don’t believe that propaganda. It’s misinformation meant to protect their profits.

The medical industrial complex has often portrayed traditional Medicare as an entitlement program that puts a drain on the economy. Steven Brill has a different view. He describes Medicare as probably the most efficient part of our healthcare system. Its administration and management costs of processing over one billion claims a year is less than $3.80 and in some cases as low as $0.84. Compare that to Aetna’s much higher $30 cost of processing its 229 million claims. (from Brill’s book, America’s Bitter Pill: Money, Politics, Backroom Deals, and the Fight to Fix Our Broken Healthcare System)

With M4A, Doctors and clinics would only have to deal with one government insurance agency. With simplified office workloads, they would not have to hire staff to deal with the different rules from many private health insurers. Instead, coverage rules and billing procedures would be standardized, with prices negotiated for patients by the government. That alone would be a huge administrative cost savings.

Conservative 10-year estimates of the cost of implementing M4A range from $32-$47 trillion. That sounds expensive and is cited by detractors, but it would be less than the cost of doing nothing.

According to Peterson KFF, total annual healthcare spending already exceeded $5.6 trillion in 2025. That includes federal spending on Medicare, Medicaid and the VA, as well as private insurance premiums and copays or out-of-pocket expenses. Without significant changes in our system, U.S health spending will reach $9.6 trillion/year by 2035.

KFF’s projected $70+ trillion over a 10-year period is almost twice what we’d spend with M4A. The savings from that calculation is less than my back-of-napkin estimate of $2.5 trillion/year savings if we just matched the average spending of other wealthy nations.

Families would save too – tens of thousands of dollars per year. Even if some pay more in taxes, overall healthcare spending would be less. These other nations all have some form of universal healthcare, and they live longer on average. But that’s not all, as we next factor in some of the downstream benefits.

Workforce productivity

As more people gain access to health care, they naturally become healthier and more productive. Their preventative visits for primary care reduce demand on emergency rooms, reduce illness, and improve workforce productivity, with direct benefits across all industries and our GDP.

Healthier workers also live longer and contribute more to both industry and the tax base. Similar benefits also come from avoiding medical bankruptcy, allowing workers to contribute more and rely less on public assistance.

By separating health insurance from employment, workers could also explore other work options, encouraging more competition in the workforce. Employers would likely raise wages to attract and keep good workers, but they could afford that by no longer needing to supplement insurance. A side benefit is workers with more motivation as they find themselves in jobs that better fit their skills and interests, rather than being stuck in less fulfilling jobs because of employer health insurance.

Beyond just improving the efficiency of how healthcare is paid for, M4A would also help address the PRICE of medical care and the NEED for it in the first place. To further reduce the costs, we might also add incentives that focus more attention on overall health and wellness — i.e. prevention versus treatment because the benefits justify that.

Measuring Success

The pharmaceutical industry has done an incredible job developing highly profitable treatments for a wide range of diseases and conditions. But there’s less incentive to develop cures if doing that cuts off the gravy train of treatment.

The medical industrial complex has been seen as a cartel because it too often sees patients as paying customers and works to keep them coming back, paying. Even new doctors going through medical school primarily learn how to diagnose and treat patient illness and injury, because that fits into the for-profit business model. They receive relatively little training on wellness and prevention, because the curriculum also supports the sick-care model of fee-for-service. With M4A and the absence of the profit motive, they’d be encouraged to spend more time on prevention.

Follow the money to see why the sick-care incentives don’t align with population health and wellness. The legal requirement for corporations to serve shareholder interests above all else has infested the healthcare industry like an illness growing into a full-blown epidemic.

By contrast, a tax-funded M4A system would prioritize people and wellness over profits, and it would dramatically change how we measure success. While private sector organizations measure success in business terms such as ROI, payback period, and quarterly profit, the public sector measures it differently and over much longer time periods. So, with M4A we’d focus more on long-term objectives like prevention, improving population health and longevity, and workforce productivity. With M4A accountable to taxpayers rather than corporations, we’d also focus more public attention on managing the healthcare costs.

That shift in priorities and measurement would be profound and introduce new incentives for other policy changes, policies that would also trickle through society and compound the benefits.

Wellness pillars

With M4A and taxpayers funding healthcare, politicians would find it easier to pass legislation and policies aimed at the Four Pillars of Health: nutrition, exercise, sleep, and stress management.

Nutrition

As described in the 4-part HBO series, The Weight of the Nation, Obesity is a really BIG problem (excuse the pun). With over two thirds (69%) of us overweight or obese, it was described as the largest threat to our health, wellness and future survival. In short, “To win, we have to lose.” A summary with the movie trailer and all four episodes is available here.

Amazingly, there’s a direct relationship between poverty and obesity. Public health officials can even predict obesity and longevity rates by zip codes, and average lifespan can vary by over 20 years between affluent and poor neighborhoods on opposite sides of the same city. Disadvantaged communities are at higher risk for many preventable health conditions. That’s due to the lack of fresh and nutritious food at affordable prices, the lack of safe places to play and exercise, and pressures from job, money, divorce and violence. The results are seen in higher rates of obesity, diabetes, heart disease, asthma, HIV/AIDS, viral hepatitis B and C, and infant mortality.

M4A could encourage politicians to enact new policies affecting nutrition and the food supply because of the direct health benefits.

Exercise

Regular exercise provides economic benefits by shrinking direct medical costs, reducing sick days, and boosting overall workplace productivity. So, it makes sense to have public policies and facilities that encourage exercise, knowing that healthy people save thousands annually in health costs, potentially adding trillions to the global GDP by keeping citizens active and productive.

Sleep

According to the Centers for Disease Control and Prevention, “Insufficient Sleep is a Public Health Epidemic.” Getting enough sleep is an absolute necessity, so the CDC also says sleep quality should be seen as a “vital sign” of good health.

As a Sleep Economist in Austin, I worked on quantifying the Economic Benefits of Population Sleep Wellness. When considering the impact sleep has on health (the immune system, heart disease, stroke, obesity, diabetes, cancer, Alzheimer’s, and depression), and while estimating the individual value of sleep, I identified another $1 trillion/year of value to the nation.

Stress Management

Simply having universal healthcare with M4A relieves stress, especially when not having to worry about losing a job (and your insurance) or going into medical bankruptcy because of a catastrophic illness or injury.

Pressures from Job, Money, Divorce and Violence are known to cause a vicious cycle of Stress = Obesity = Stress. We know exercise helps relieve that stress, but so can public policies that prioritize people over profits, and doctors schooled in prevention.

Pollution

Environmental pollution also contributes to millions of premature deaths annually, and it disproportionately affects vulnerable populations like children and the elderly. These hazards silently and systemically ravage the cardiovascular, respiratory, and nervous systems, often leading to chronic conditions such as heart disease, lung cancer, cognitive decline, and metabolic disorders.

Air pollution, driven by fine particulate matter and ground-level ozone, is one of the leading global environmental health hazards, contributing heavily to non-communicable diseases. Likewise, Contaminated water exposes us to heavy metals, industrial chemicals, and pathogenic bacteria, reducing global life expectancies. And excessive noise (above 65 dB) from traffic or industrial machinery causes significant, health damage beyond hearing and is recognized as the second largest environmental cause of health problems.

By holding the government responsible for our nation’s health, M4A offers justification for new policies focused on improving the environment.

Research Funding

Government healthcare research acts as a major economic engine, according to the National Institutes of Health. Every $1 invested in basic public research stimulates an additional $8.38 of private sector investment. It also contributes to disease prevention, a healthier workforce, and reduced future medical costs.

Federally funded basic research provides the foundational discoveries that lead to new drugs, devices, and treatments. The U.S. biomedical industry, for instance, is largely built on NIH research. And research aimed at building resilience against pandemics mitigates massive global GDP losses and supply chain disruptions. M4A could be a significant accelerator of public-funded research.

Business Models

As the COVID-19 pandemic shut down everyday commerce in 2020, businesses across the globe adapted and developed new products, services, delivery methods, and business models. In healthcare we saw an increased emphasis on prevention and remote home care, drone and delivery vehicle delivery of drugs and critical supplies, robotics, wearable sensors, and smartphone-enabled monitoring of patient compliance.

Telehealth services were already in use in emergencies but gained significant ground during the pandemic as public policies relaxed the obstacles previously against it. According to Parks Associates, in the first year of the pandemic, “the percentage of consumers who had a remote [doctor] visit in the previous twelve months rose from 15% of US broadband households to 41%.” That nearly three-fold increase in telehealth visits was a direct result of COVID. The patients reported positive experiences and high levels of satisfaction, with the highest among those age 65 and older.

A few years ago, I wrote an article describing COVID as the Biggest Megatrend of All, with significant social, economic, and political implications. I expect the impact of Medicare-for-All will be just as profound, broad, and rapid.  All of this should be good news economically, but the churn will put intense pressure on entrenched healthcare incumbents.

Those who don’t dramatically change their ways may not survive, as I made clear in a related article, 101 MiniTrends. The article says 429 of the original Fortune 500 corporations have merged or are no longer in business today. That should worry those at the top of the healthcare mountain and cause them to change and adapt more rapidly. Just as COVID prompted rapid change, M4A could do the same, with the projected benefits coming faster than many people think.

Related Articles

• Why American Health Care is So Expensive
• Unbreaking American Healthcare
• Reengineering U.S. Healthcare
• Why Medicare-for-All is Not Enough
• How Medicare-for-All would Save Money, a Lot of it
• MAHA, the lofty goal of Making America Healthy Again
• Healthcare and The Common Good
• The Health Care Moral Dilemma
• Extreme Inequality in Politics, Healthcare and Economics

ABOUT THE AUTHOR

Wayne Caswell is a retired IBM technologist, futurist, market strategist, and founding editor of Modern Health Talk. He leans left to support progressive policies but considers himself politically independent.