Blog post: What do utilization increases actually mean?

Single-payer cost estimates are in the news this week.  A key issue in estimating the cost of single-payer is how it will increase healthcare utilization.  Increased utilization, it’s worth pointing out, is basically the only way that single-payer adds to overall healthcare spending.  Now some increase is clearly expected and desirable – after all, we’re providing insurance to the uninsured and eliminating copays and deductibles for the rest.  However, as David Himmelstein and Steffie Woolhandler and others have argued, there are supply limits – the system can only provide so much care.

In any event, utilization increases are typically presented as abstract figures.  For instance, the recently released Mercatus Center study estimates an 11.3% increase in utilization (for 2019), whereas the Urban Institute estimates a 16.9% increase (averaged over 2017-2026).

It’s helpful to put those percentages in the context of actual services provided, as Himmelstein and Woolhandler sometimes do, because they translate into a concrete increase in the number of doctors’ visits, nights in the hospital, ER visits, etc.  I offer some rough estimates of these changes below, with the assumption that the average increase in utilization affects all services equally.  So, for instance, using Urban Institute estimates, 16.6% more utilization translates into 185 million more visits to the doctor and nearly 4 million more therapeutic surgeries a year.

Current utilization (millions) Change in utilization


Urban Institute Mercatus Center



(AHA, 2016)

35.0 5.8 4.0
Doctor visits

(NAMCS, 2015)*

1117.0 185.4 126.2
ER visits

(NAMCS, 2015)

137.0 22.7 15.5
Therapeutic surgical procedures

(HCUP, 2014)

21.8 3.6 2.5

Are those numbers realistic?  For the moment I won’t editorialize on this, but it’s worth keeping these figures in mind as cost estimates of single-payer are released and debated in coming days.


* There were 990,808 doctor office visits in 2015 per NAMCS.  However, data on visits to hospital outpatient departments (OPD) has not been released by NAMCS since 2011.  In that year, OPD visits were 12.7% office visits.  I inflated the office visits figure by this percentage, assuming that the proportion had not changed.


BMJ: “Healing an Ailing Pharmaceutical System”

Our comprehensive drug reform proposal, “Healing an Ailing Pharmaceutical System,”was published today in the British Medical Journal.

The proposal comes from the US/Canadian Pharmaceutical Working Group, a panel of physicians, scholars, and advocates from both nations that was convened by PNHP. It was launched this morning at a press release at the National Press Club, and was webcast. We were joined (via a recorded video message) by Representative Keith Ellison and Dr. Marcia Angell, former editor-in-chief of the New England Journal of Medicine. Steffie Woolhandler, co-founder of PNHP, moderated, and Sid Wolfe of Public Citizen, Ken Zinn of National Nurses United, and Alex Lawson of Social Security Works attended and spoke.  Video to follow!

Some additional links:

Point-Counterpoint in the Journal of Policy Analysis and Management

I have a point-counterpoint in the new issue of the Journal of Policy Analysis and Management, dealing with the question of what road we should be taking to get to universal coverage.

Dana Goldman, the Director of the Leonard D. Schaeffer Center for Health Policy and Economics at the University of Southern California, and Kip Hagopian, co-founder of Brentwood Associates and a Managing Partner at Apple Oaks Partners, LLC, make the case for a non-single-payer system of “universal coverage without breaking the bank.”  I argue (surprise surprise) why “Medicare-for-All” is the only potent, feasible path to universal coverage.  There are rebuttals from both sides and an editorial, all available free.

Comments in Vox on the Sen. Brian Schatz’s Medicaid-based “Public Option”

Yesterday, Vox’s Sarah Kliff and Jeff Stein described Sen. Brian Schatz (D-HI) new Medicaid buy-in proposal, based on an exclusive interview.  As they wrote:

In an interview with Vox, Schatz revealed that he’s preparing a new bill that could grant more Americans the opportunity to enroll in Medicaid by giving states the option to offer a “buy-in” to the government program on Obamacare’s exchanges.

Today, Jeff and Dylan Scott published the opinions of seven health policy people on Schatz’s bill, including yours truly.


Healthcare News Week in Review

The ACA Repeal 

Multiple outlets reported on the release of the Senate’s Obamacare repeal bill, named the Better Care Reconciliation Act (BCRA).  Like the House bill (the American Health Care Act, or AHCA), BRCA would wind down federal funding of the Medicaid expansion, albeit over a few years.  In the long term, however, it would actually cut the program more deeply by reducing the rate of growth of Medicad’s new per capita payments, beginning in 2025.  Like the AHCA, it would repeal almost all of Obamacare’s taxes, mainly benefiting the rich and healthcare corporations.  Also like AHCA, it would eliminate both the individual and employer mandate, although unlike it there would be no penalty for being uninsured, as well as no risk rating.  It would additionally broaden Obamacare’s waiver program, which would allow states to fundamentally restructure their individual insurance market, for instance they might choose to eliminate the requirement that health plans cover all essential health benefits or have a particular actuarial value.  I described the bill in a negative light in the Guardian, where I compared it to cyanide, a vampire, and (you’ll have to read it) water crackers.

Vox [06-19-17, Dylan Scott] interviewed almost 20 lobbyists and other healthcare experts, and reports that the healthcare industry has deliberately chosen to not strongly oppose the Obamacare repeal, as seen by the absence of any sort of PR blitz, unlike with previous legislative healthcare fights.  In part the industry wants to continue to be able to influence the Trump administration’s agenda, and in part it does not want to provoke its wrath, Scott suggests.  Notably, the repeal of Obamacare means different things for different healthcare sectors, though many sectors stand to gain from tax breaks contained in both the House and Senate bill.

Modern Healthcare [06-22-17, Shelby Livingston] describes how the BCRA could prove highly profitable for many insurers, insofar as it repeals the ACA’s taxes on insurers, increases the age band (allowing older individuals to be charged higher premiums), temporarily extends cost-sharing subsidies, provides some $112 billion to stabilize insurance markets, and permits states to set the set their own medical-loss-ratio (potentially allowing insurers to spend a lower percentage of premiums on healthcare).  On the other hand, the law could hurt insurers who mainly are in the business of insuring low-income individuals via Medicaid HMOs.

Reuters [06-22-17, Lewis Krauskopf] reported that healthcare stocks—including insurers—shot up sharply in the wake of the release of the Senate Obamacare repeal bill, BCRA.

Vox [06-23-17, Nicholas Bagley] carried an article exploring the potential implications of BCRA’s “crazy waivers.”  According to Bagley, a provision in BCRA would widen the waiver clause of the ACA enormously, essentially giving any state the ability to obtain a waiver as long as it doesn’t improve the deficit.  As he describes, this could allow states to eliminate all sorts of insurance protections, including out-of-pocket maximums and essential health benefits; additionally, it could also potentially effectively eliminate annual and lifetime limits of insurance coverage, not merely in the individual market in one state, but for everybody—throughout the country.

Vox [06-23-17, Dylan Scott] reported on how the insurance industry is reacting to the ongoing Obamacare repeal.  Scott notes that there are many things that insurance companies like about the BCRA, particularly its repeal of the ACA’s taxes and the money provided for a stabilization funds.  Although there are some provisions that could be bad for insurers’ bottom lines, Scott quotes from investment analysts who describe it as a positive.


Single Payer

 The Washington Post [06-18-17] had an editorial arguing that single payer had an “astonishing” price tag, and could only generate real savings cuts by reducing “standards of access and comfort” for patients, reducing physician pay, and closing rural health facilities.

I wrote a response to the Post’s editorial in Jacobin].



STAT [06-23-17, Damian Garde and Adam Feuerstein] report how the Food and Drug Administration’s approval of betrixaban (trade name: bevyxxa) despite a failed phase 3 trial might signal the beginning of a laxer era at the agency, now headed by Scott Gottlieb.