First-of-Its Kind Study: Medicare for All Single-Payer Reform Would Be Major Stimulus for Economy

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For Immediate Release
January 14, 2009

First-of-Its Kind Study: Medicare for All Single-Payer Reform Would Be Major Stimulus for Economy with 2.6 Million New Jobs, $317 Billion in Business Revenue, $100 Billion in Wages

Establishing a national single-payer style healthcare reform system would provide a major stimulus for the U.S. economy by creating 2.6 million new jobs, and infusing $317 billion in new business and public revenues, with another $100 billion in wages into the U.S. economy, according to the findings of a groundbreaking study released today. It may be viewed at

The number of jobs created by a single-payer system, expanding and upgrading Medicare to cover everyone, parallels almost exactly the total job loss in 2008.

read the full studyview more charts

“These dramatic new findings document for the first time that a single-payer system could not only solve our healthcare crisis, but also substantially contribute to putting America back to work and assisting the economic recovery,” said Geri Jenkins, RN, co-president of the National Nurses Organizing Committee/California Nurses Association, which sponsored the study.

“Through direct and supplemental expenditures, healthcare is already a uniquely dominant force in the U.S. economy,” said Don DeMoro, lead author of the study and director of the Institute for Health and Socio-Economic Policy, the NNOC/CNA research arm.

“However, so much more is possible. If we were to expand our present Medicare system to cover all Americans, the economic stimulus alone would create an immense engine that would help drive our national economy for decades to come,” DeMoro said.

Expanding Medicare to include the uninsured, and these on Medicaid or employer-sponsored health plans, and expanding coverage for those with limited Medicare, would have the following immediate impacts:

  • Create 2,613,495 million new permanent good-paying jobs (slightly exceeding the number of jobs lost in 2008)
  • Boost the economy with $317 billion in increased business and public revenues
  • Add $100 billion in employee compensation
  • Infuse public budgets with $44 billion in new tax revenues

Further, moving to the new system comes with an unexpectedly low price tag, given the economic benefits and the far-reaching consequences of genuine healthcare reform, DeMoro noted.

Healthcare for all far less than the Wall Street bailouts

Adding all Americans to an expanded Medicare could be achieved for $63 billion beyond the current $2.1 trillion in direct healthcare spending. The $63 billion is six times less than the federal bailout for CitiGroup, and less than half the federal bailout for AIG. Solely expanding Medicare to cover the 47 million uninsured Americans (as of 2006 data on which the study is based) could be accomplished for $44 billion.

The IHSP projections build from an econometric model of the current face of healthcare – applying economic analysis to a wide array of publicly available data from Medicare, the Bureau of Labor Statistics, Bureau of Economic Analysis, and other sources.

It is the first known study to provide an econometric analysis of the economic benefits of healthcare to the overall economy, showing how changes in direct healthcare delivery affect all other significant sectors touched by healthcare, and how sweeping healthcare reform can help drive the nation’s economic recovery.

Healthcare presently accounts for $2.105 trillion in direct expenditures. But healthcare spreads far beyond doctor’s offices and hospitals. Adding in healthcare business purchases of services or supplies and spending by workers, the total impact of healthcare in the economy mushrooms to nearly $6 trillion.

Overall, every direct healthcare dollar creates nearly three additional dollars in the U.S. economy. In current form, healthcare:

  • Generates 45 million jobs, directly and in other industries.
  • Accounts for 10.5 percent of all U.S. jobs and 12.1 percent of all U.S. wages.
  • Totals 9.2 percent of the nation’s Gross National Product.
  • Contributes about 25 percent of all federal tax revenues. Federal, state, and local taxes from the healthcare sector in 2006 added up to $824 billion.

All those numbers would rise dramatically through comprehensive healthcare reform. But a single-payer system would produce the biggest increase in jobs and wages. The reason, DeMoro said, is that “the broadest economic benefits directly accrue from the actual delivery and provision of healthcare, not the purchase of insurance.”

Medicare for all has numerous other benefits, of course, noted Jenkins, from a streamlined system with tens of billions less in private insurance administrative waste, guaranteed choice of physician and hospital, no loss of coverage when unemployed, and no one denied coverage due to age or health status.

“Only a single-payer, expanded Medicare-for-all approach ends the current disgraceful practice of insurance companies refusing to pay for medical treatment or engaging in rampant price gouging that discourages patients from going to the doctor, seeing specialists, or getting diagnostic procedures in a timely manner,” said Jenkins.

The IHSP has conducted research for members of Congress and state legislatures as well as NNOC/CNA, and received international renown for research studies on cost and charges in the hospital industry, the pharmaceutical industry, hospital staffing, and other healthcare policy.

Robert Fountain, a frequent economics consultant for the California Public Employees Retirement System (Cal-PERS), served as a consultant on the study.

h/t: Connie


See also:

AHIP explains why private insurance is a bad deal – PNHP’s Official Blog

New Report Examines Out-of-Network Charges by Some Physicians

h/t: Connie

Barack Obama health plan: British experts defend NHS against US Right-wing attacks – Telegraph


Obama’s New Mistress – Big Pharma + Mark Leno: Single Payer Saves Money

Dennis Kucinich: Health Insurance Companies Have a Death Grip on Our Political Process

12 thoughts on “First-of-Its Kind Study: Medicare for All Single-Payer Reform Would Be Major Stimulus for Economy

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  2. Obama’s doctor was eloquent on this:

    (Also on larry King by Blitzer, with Ron Paul, who is adamantly opposed to single-payer and even public option– I always knew there was no coalition between progressives and Ron Paul!)

    Likely the president still believes in Single payer, and definitely no fool.

    Perhaps he’s catering to big insurance because he knows it won’t get through, with that ‘astroturf’ activist opposition convinced even a ‘public option’ is too big of an infringement on their independent right to get ripped off.

    Or perhaps his ‘public option’ is the only way he can imagine putting pressure on the insurance companies without tanking the S&P.

    Or perhaps he really is a blatantly corrupt corporate tool as everyone here says.

    All very unfortunate.

    I think he should pull out of Afghanistan and Iraq and stop killing people abroad before worrying about selfish americans and their selfish american problems.

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