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Single Payer Health Care: By the Numbers

First off, here's the resulting 78KB XLS-format spreadsheet, which is licensed for free, unfettered duplication under the Creative Commons Attribution-Share Alike 3.0 United States License.

A few brief caveats before we get started: First, all the sources are cited in the spreadsheet. Secondly, in this summary, some math might not quite work out fully due to rounding. The proper math, to two decimal places, is in the spreadsheet.

So let's get started...

Basic statistics on the US Health Care "system"

We'll start by simply dropping some basic and well-known statistics:

• The population of the United States is approximately 303.8 million people.
• The Gross Domestic Product of the US was approximately $13.84 trillion in 2008.
• There were approximately 156 million taxpayers filing returns with the IRS in 2008.
• US per capita income is $32,140
• The net income, from individual tax revenue in 2008 was approximately $884 billion (gross receipts minus refunds)
• Total health-care expenses, across consumer, business, and governmental outlays, totalled approximately $2.334 trillion and growing in 2008.
• Of total health-care expenses, consumers bore 39.17% of the burden, corporations and businesses 27.93%, and government 34.06%
• The average "consumer" cost, on an individual basis, for health care is approximately 12% of income.
• Existing government health care, excluding soldiers and veterans, reached 93 million people, or 30% of the population, in 2008, predominately senior citizens and the poor.
• The existing health care system in this country leaves 16% of our population high and dry, without medical coverage of any kind, whatsoever.

Consumers

From this, we can extrapolate certain conclusions, for which we'll start with the consumer end of the equation:

• Eliminating individual health care expenses, in favor of a single-payer, public option, would result in $602.8 billion per year being released into the wider economy, whether saved in banks, invested in stocks, or spent on homes.
• At the average, per-capita tax rate of 9.96% (which doesn't take into account FICA) the $602.8 billion saved by consumers would result in an additional $60.046 billion in tax revenue
• Incidentally, when you factor in FICA, there would be an additional $46.1 billion per year in savings that could be used to shore up Social Security. (And, note to legislators, this time....lock the frigging lockbox. No more fingers in the Social Security cookie jar! It's NOT general revenue, but a promise made that needs to be kept!)

Business

Next, we'll look at the business/corporate end of the math:

Again, certain basic facts need to be established:

• Net tax receipts from corporations totalled $395.3 billion in FY2007. (Note: revenues are expected to decrease across FY2008 and 2009 due to the ongoing effects of the various economic crises; but since we will eventually return to positive growth, FY2007 can be used as a reasonable baseline.)
• Total business income was approximately $6.19 trillion, representing 44% of GDP.
• The average US Corporate income tax paid is approximately 27%.
• US businesses' share of the health-care burden, after subtracting consumer and government outlays, was $1.73 trillion.
• If, and admittedly, it's a big if, 100% of business health-care outlays translated directly into taxable profits, then multiplied by the 27% average corporate tax rate, the resulting tax-revenue windfall would total a whopping $467.4 billion!

(Very) preliminary conclusions

Of course, the marginal increase in corporate tax revenues would ebb and fall with economic cycles, but on the whole, it could be expected to even out over time. The total of our "savings" so far? $527.4 billion. The existing federal outlays on health care, again, are $795 billion, so we can extrapolate that we could then cover another 61.7 million people, bringing the total number of people totally covered with universal health care to 154.7 million people.

And that's at prices that are artificially inflated due to the lobbying pressure of pharmaceutical and health care conglomerates, who don't want you to re-import medicine that they're selling cheaper overseas, and who routinely act as oligopolies. It's without ferreting out a single dollar of cost-savings from Medicare/Medicaid, and it's without factoring in various proposed reductions or changes to the existing federal programs in the face of a new public option scheme. (In other words, we're pretending for a moment as though we'd just let Medicare/Medicaid, as well as Big Pharma and the hospital conglomerates, to continue on exactly as they have before.)

In short, YES WE CAN achieve 51% of universal health care without raising taxes by ONE RED CENT over their present levels, and without changing the government part of the total system at all.

And I hear your objections already: 154.7 million people, in a country with 300 million-plus people, is NOT universal health care. In fact, you just said it yourself: it's 51% of universal health care. That's an F in any school in the country! And at a total theoretical cost of $1.322 trillion! In fact, with your numbers, it would cost $2.59 trillion to cover 100% of the population, which is LESS efficient than our existing private system! You're not exactly winning us over here.....

Well, firstly, I'd argue that achieving universal health care --under the existing privatized regime-- would cost $2.78 trillion. (Total outlay of 2.334 billion, divided by 84%, the number of people with some form of coverage.) So by my reckoning, if we wanted to cover everybody, we'd save $180 billion or so every year with a public option, right off the bat.

But you're right. I'm here to argue the all-out superiority of a well-run, single-payer system, not to try to pass off a refried version of Medicare on an unsuspecting populace. The fact that citizens are generally very satisfied with Medicare and Medicaid should not enter this equation in that kind of manner. (But I didn't drop that statistic of just how much it would cost to cover 100% of our population with our private health-care system for nothing, as you'll soon see.)

So let's try to quantify just how bloated our existing health care system really is, and just how much cost savings we could squeeze out of the system itself, shall we?

We'll do so by looking at other, comparable industrialized nations that already have universal health care. We'll start with Japan.

Universal Health Care in four selected industrialized nations

Japan

First, some basic statistical facts:

• The population of Japan is 127.28 million.
• Japan's population, therefore, is approximately 42% the size of America's.
• Japan's GDP, built on universal health care helping to power their export-driven economy, is $4.272 trillion.
• Japan's economy, therefore, is 30.87% as large as the United States' economy.

Japan spends approximately 8.23% of its GDP on its nationalized health-care system, which is a blend of government and business-funded programs. That's just $351.5 billion in nominal US dollars. If we took Japan's health care system, picked it up whole-hog, plunked it down in Kansas, and then scaled it to proportion with our population, we could achieve true, 100% universal health care with just $839 billion.

So, we can reasonably infer that Japan's public health-care system is about 331% more efficient than America's present privatized system.

Canada

Again, some basic statistical facts:

• The population of Canada is 33.21 million.
• Canada's population, therefore, is approximately 10.93% the size of America's.
• Canada's GDP is $1.271 trillion.
• Canada's economy, therefore, is 9.18% as large as the United States' economy.

Canada spends 10.40% of its GDP on its health care system, totalling $132.84 billion in expenses. Extrapolating Canada's stats into the US population, if we used Canada's system, we could provide universal health care at a cost of approximately $1.209 trillion. That means Canada's system is approximately 229.79% more efficient than America's.

United Kingdom

Stats:

• The population of the UK is 60.94 million.
• The UK's population, therefore, is approximately 20.06% the size of America's.
• The UK's GDP is $2.13 trillion.
• The UK's economy, therefore, is 15.39% as large as the United States' economy.

The UK spends 8.56% of its GDP on its health care system, totalling $182.33 billion in expenses. Extrapolating the UK's stats into the US population, if we used the UK's system, we could provide universal health care at a cost of $908.96 billion. That means the UK's system is 305.69% more efficient than America's.

France

Stats:

• The population of France is 61.53 million.
• France's population, therefore, is approximately 20.25% the size of America's.
• France's GDP is $2.56 trillion.
• The French economy, therefore, is 18.5% as large as the United States' economy.

France spends 11.3% of its GDP on its health care system, totalling $289.28 billion in expenses. France's health care system is ranked by the World Health Organization as the best in the world, incidentally, but we're sticking to simple math for this summary, and so we'll leave it at that.

Extrapolating France's stats into the US population, if we used the French system, we could provide universal health care at a cost of $1.428 trillion. That means the France's system is 194.55% more efficient than America's.

Final Summary

So, there you have it. If we adapted ANY of these four nations' health care programs to our own country, we could cover every single man, woman, and child in this nation, and have cash to spare over our old expenditures. All we'd have to do is restructure our existing outlays as part of the new system, and the market would take care of the rest.

And not just that, but we could unleash a torrent of money into our economy, equal to FIFTEEN of the 2008 Economic Stimulus Act rebates, every single year, for forever. Those stimulus rebates increased consumer spending by 3.5%, thus, we'd be increasing consumer activity in the economy by 17% on a permanent basis, whether it be by direct spending, savings, or investments, which would then show positive results in tax revenues, which would then help us in our ongoing quest for a balanced budget and debt reduction. (Which is to say, that virtuous cycle I was talking about in my last post.)

Finally, we'd be turning our companies loose, to compete more strongly in the world markets. After all, health-care costs nearly destroyed our auto industry; our other heavy industries aren't far behind. Wouldn't it be nice to be able to keep some well-paid manufacturing jobs right here in America?

Mr. President: Don't take the public option off the table. Not now, not ever. Get the facts out there, get the people informed, and we get the twofer of taking premature deaths due to insurance company denials off the table while rejuvenating our economy overnight, just by sticking to your guns and seeing this thing through.

The question is not if we should adopt a single-payer system, but rather, when.

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Editor's note: Thanks go to redditors Tuber and SuperConfused for some quick validation of my efficiency calculations.

Ed's note, update: Made the reddit frontpage! PopUrls, too. Nifty!

Ed's note: 2nd update: Big thanks to Mark for pointing out a better source for the effective average taxation rate for corporations! Post and spreadsheet adjusted!

Ed's note: 3rd update: Corrected value of new money in economy in terms of 2008 Economic Stimulus Act. New value is 15.35; I'd erroneously only factored in new government tax receipts, and not the actual consumer/corporate monies "liberated".