Some Inconvenient Truths on US Healthcare that people need to acknowledge but don't do when discussing how US single payer healthcare would work or be financed.
The fact that the US spends a lot more as a % of GDP and on a per capita basis compared to other rich countries and no reform if likely to bring us close to our rich nation peer group has a huge constraining impact.
US spent 17% of GDP on HC in 2018 vs 11% for Germany. In PPP adjusted $ term, US spent $10,600 per capita and Germany spent $6,000. So we are spending 75% more on a per capita basis. Our per capita GDP in PPP terms is ~20% more so even if we factor that, we are spending 50% more
Now let us see how Germany finances its 11% of GDP HC spend. They charge a payroll tax of 15%, half paid by the employee and half paid by the employer.
Yet Warren is pretending that our system which costs 75% more can be funded without middle and high income people paying more than $9,500 of their income for M4A (rough amount of her employer M4A head tax).
In Germany a worker making $100K would be paying $15K towards HC coverage but in the US where spend per capita is 75% more, they only need to pay $9.5K ... Uh OK.
Somehow no European country has been able to find a way to finance HC with putting most of the burden on the wealthy and the financial sector, but sure US should be able to do it pretty easily and it will absolutely have no negative impact on economic growth.
If you say that well we can reduce our HC spending down to rich European countries, I would like to know exactly how US HC spending can be cut by 50-75%? American doctors and nurses make 2x their rich nation peers, no one is ever going to reduce their earnings materially.
The only two "easy" mechanisms are reducing administrative costs via transition to single payer and to reduce drug prices via price controls. However drug spending is only 10% of US HC Spend and entire US private insurer net cost (includes not just admin but also profits) is 7%.
Some of the 7% of net private insurer costs is not avoidable, at least 3% needs to go towards admin to avoid fraud. So if we cut 4% there and cut US drug prices by half (unrealistic) best case we cut spending by 9%.
Frankly we will be lucky to even get 5% reduction in US HC spend and some of that BTW will come because when US pays less for drugs, rich countries will pay more or even can just all reduce innovation in drug discovery and live with it.
Bottomline, the fact that we don't have any ability to get US HC spend down to say more than 15%-16% of GDP constrains how single payer is implemented and has to be financed greatly.
Senator Warren's plan shows no acknowledgement of these constraints at all and it is crazy that no one outside of the right seems to understand those trade-offs and how unrealistic her financing proposal is.
