At the January Democratic debate, Vermont Sen. Bernie Sanders zeroed in on the query of earnings within the well being care business.
Under “Medicare for All,” he mentioned, “we end the $100 billion a year that the health care industry makes.”
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At the January Democratic debate, Vermont Sen. Bernie Sanders zeroed in on the query of earnings within the well being care business.
Under “Medicare for All,” he mentioned, “we end the $100 billion a year that the health care industry makes.”
[partner-box]It’s an enormous quantity, and one which Sanders has cited earlier than. So we determined to look nearer.
The Math
The Sanders marketing campaign shared its math, and it’s complete.
The $100 billion complete comes from including the 2018 internet revenues — as disclosed by the businesses — for 10 pharmaceutical firms and 10 firms that work in medical insurance.
We redid the numbers. Sanders is appropriate: The complete internet revenues, or earnings, these firms posted in 2018 comes to simply greater than $100 billion — $100.96 billion, actually. We additionally spoke to a few unbiased well being economists, who all advised us that the maths checks out.
There are a few wrinkles to contemplate. Some of the businesses included — Johnson & Johnson, as an illustration — do extra than simply well being care. Those different companies seemingly have an effect on their backside traces.
But extra essential, $100 billion is probably going an underestimate, specialists advised us.
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For one factor, there are extra than simply 10 pharmaceutical firms, and greater than 10 insurance coverage firms, famous Robert Berenson, a well being economist on the Urban Institute. Many extra exist — even when they’re smaller and submit smaller earnings.
And this determine seems at pharmaceutical firms and insurance coverage firms, nevertheless it doesn’t embrace the most important supply of well being care earnings: hospitals and physicians.
“You could ask the same questions of health systems and not-for-profit hospitals who are raising prices at a steady clip,” mentioned Ellen Meara, a professor of well being economics on the Harvard T.H. Chan School of Public Health. “If you’re going to go after industry, you need to go after the whole system and say prices are a problem everywhere.”
If something, Berenson mentioned, that makes Sanders’ level stronger. After all, $100 billion is a small proportion of the trillions spent yearly through nationwide well being expenditures. When you consider hospital margins, the quantity grows considerably.
So, ‘Medicare For All’?
Sanders advised that Medicare for All would “end” the $100 billion-per-year earnings reaped by the well being care business.
The proposal would definitely give Washington the ability to do this.
“If you had Medicare for All, you have a single payer that would be paying lower prices,” Meara mentioned.
That means decrease costs and earnings for prescription drugs, decrease margins for insurers and decrease costs for hospitals and well being programs.
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That may convey trade-offs: as an illustration, fewer folks selecting to apply medication. But, Meara famous, the quantity helps Sanders’ bigger thesis. “There’s room to pay less.”
Other well being reform plans — together with letting Medicare negotiate drug costs, or a government-sponsored public possibility, such because the plan backed by former Vice President Joe Biden and former South Bend, Indiana, Mayor Pete Buttigieg — may even have this impact.
But, Berenson famous, having just one insurer, and having or not it’s publicly funded, would seemingly have a better influence.
“I could whack pharmaceutical companies, and I don’t need Medicare for All to do it, but I do need Medicare prices for all to deal with what the real profits are — whether you call them profits or not — which is hospitals.”
Our Ruling
Sanders mentioned Medicare for All would “end the $100 billion a year that the health care industry makes.”
The math holds up. If something, it’s an underestimate as a result of it doesn’t embrace the biggest sources of well being care earnings: hospitals, well being programs and physicians. We charge it True.
This story may be republished totally free (details). It’s an enormous quantity, and one which Sanders has cited earlier than. So we determined to look nearer.
The Math
The Sanders marketing campaign shared its math, and it’s complete.
The $100 billion complete comes from including the 2018 internet revenues — as disclosed by the businesses — for 10 pharmaceutical firms and 10 firms that work in medical insurance.
We redid the numbers. Sanders is appropriate: The complete internet revenues, or earnings, these firms posted in 2018 comes to simply greater than $100 billion — $100.96 billion, actually. We additionally spoke to a few unbiased well being economists, who all advised us that the maths checks out.
There are a few wrinkles to contemplate. Some of the businesses included — Johnson & Johnson, as an illustration — do extra than simply well being care. Those different companies seemingly have an effect on their backside traces.
But extra essential, $100 billion is probably going an underestimate, specialists advised us.
For one factor, there are extra than simply 10 pharmaceutical firms, and greater than 10 insurance coverage firms, famous Robert Berenson, a well being economist on the Urban Institute. Many extra exist — even when they’re smaller and submit smaller earnings.
And this determine seems at pharmaceutical firms and insurance coverage firms, nevertheless it doesn’t embrace the most important supply of well being care earnings: hospitals and physicians.
“You could ask the same questions of health systems and not-for-profit hospitals who are raising prices at a steady clip,” mentioned Ellen Meara, a professor of well being economics on the Harvard T.H. Chan School of Public Health. “If you’re going to go after industry, you need to go after the whole system and say prices are a problem everywhere.”
If something, Berenson mentioned, that makes Sanders’ level stronger. After all, $100 billion is a small proportion of the trillions spent yearly through nationwide well being expenditures. When you consider hospital margins, the quantity grows considerably.
So, ‘Medicare For All’?
Sanders advised that Medicare for All would “end” the $100 billion-per-year earnings reaped by the well being care business.
The proposal would definitely give Washington the ability to do this.
“If you had Medicare for All, you have a single payer that would be paying lower prices,” Meara mentioned.
That means decrease costs and earnings for prescription drugs, decrease margins for insurers and decrease costs for hospitals and well being programs.
That may convey trade-offs: as an illustration, fewer folks selecting to apply medication. But, Meara famous, the quantity helps Sanders’ bigger thesis. “There’s room to pay less.”
Other well being reform plans — together with letting Medicare negotiate drug costs, or a government-sponsored public possibility, such because the plan backed by former Vice President Joe Biden and former South Bend, Indiana, Mayor Pete Buttigieg — may even have this impact.
But, Berenson famous, having just one insurer, and having or not it’s publicly funded, would seemingly have a better influence.
“I could whack pharmaceutical companies, and I don’t need Medicare for All to do it, but I do need Medicare prices for all to deal with what the real profits are — whether you call them profits or not — which is hospitals.”
Our Ruling
Sanders mentioned Medicare for All would “end the $100 billion a year that the health care industry makes.”
The math holds up. If something, it’s an underestimate as a result of it doesn’t embrace the biggest sources of well being care earnings: hospitals, well being programs and physicians. We charge it True.
