Wednesday, August 22, 2007

Fantasy Cost Estimates Drive Colorado Plan 

Categories:  Colorado

Want to put lipstick on the single payer pig? The Lewin Group is the group for you. It has just finished yet another 230-page final report on the cost of reforming a state’s health care system. Once again, its out-of-date model rediscovers the magic of single payer.

According to the model, to reduce health spending in Colorado by $1.4 billion per year all the Colorado legislature has to do is wave its statutory magic wand. And pass single payer.

It gets better.

The savings will come by providing Medicaid benefits for all. On paper, Medicaid benefits are richer than private insurance plans or Medicare. In practice, people can’t get care because payments are below costs. But they have insurance and that, in the wonderland of health care policy, seems to matter the most.

Marvelous management by a 15-member unelected governing board will vastly improve health care quality. In the single-payer magic kingdom that was modeled, every resident will be covered automatically (no citizenship required), out-of-pocket costs for health care will be less than the cost of going to the movies: Co-pays are $15 for inpatient hospital stays, office visits at $2 go for less than the cost of a gallon of gas, and brand name prescription drug will cost less than a gallon of milk at $3 per script. Coverage will be richer, with unlimited long-term care, home health care, maternity, substance abuse and physical therapy. And there will be no lifetime limits on payouts.

The level of unreality prevailing is such that in response to a request to explain any existing Colorado benefit package similar to the ones being proposed, the authors of the single payer plan wrote that “Medicare, a publicly financed universal health care system, has operated successfully since 1965,” and “The University of Denver Student Health Service, a single-payer universal health care system, has operated successfully since 1947.”

Common sense says that the savings estimates offered by the Lewin Group are a poster child for GIGO. That the company keeps getting hired to produce them shows that there is no end to those who fantasize about utopian government, and who have pockets deep enough to pay $300,000 for modelers who reflect their beliefs.



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