We report results from a survey of Pennsylvania physicians, finding that more than half report large decreases in hours worked for staff in their workplaces and 44 percent anticipate their income to decrease by more than half. We estimate PA doctors could lose $6 billion in income during 2020 Q3, with 45 percent of those in private practice anticipating shutting down within the next six months.
President Trump’s Payroll Tax Holiday: Budgetary, Distributional, and Economic Effects
In response to the economic effects of the coronavirus, President Trump has proposed a payroll tax holiday that would temporarily eliminate all Social Security and Medicare payroll taxes through December 31st, 2020. PWBM projects that this payroll tax holiday would cost $807 billion if the holiday were run from April 1 through December 31, 2020.
Households in the bottom 20 percent of the income distribution—those households with the highest willingness to spend their tax savings—would receive about 2 percent of the total tax cut and only a third of these households would see any tax savings due to low levels of taxable income. Tax savings would also accumulate slowly over time relative to direct government spending.
PWBM estimates that eliminating payroll taxes would have little net impact on the economy in the short run and would reduce the size of the economy by 0.1 percent in 2030 and 0.2 percent in 2050 due to additional debt.
Video: PWBM's Stylized Medicare For All Model
Diane Lim, Director of Outreach and Senior Advisor at PWBM, and Felix Reichling, PWBM Senior Economist, discuss our new integrated health, budget, and economic model and a stylized analysis of universal Medicare.
Health Insurance Policy: 2020 Presidential Election State Indicator Map
PWBM’s interactive state-level map shows insurance indicators for each state that relate to health care policy. These data-based indicators can inform debates about 2020 Presidential campaign proposals for changes to health care policy. We show insurance rates for those who are unemployed, not in the workforce, employed, retirees and children. We also examine the cost of health care premiums, per enrollee spending on Medicare, state health care spending, infant mortality and life expectancy. These indicators imply that the impact of any proposed changes to health insurance policy on a state will depend on labor market conditions and the age distribution of that state.
Health Insurance Policy Map: Indicators of the Economic Impact on Each State
PWBM’s new interactive health insurance policy map allows you to see how health insurance coverage, costs and outcomes differ across states.
States with lower income and lower employment rates tend to also have lower health insurance coverage and broad measures of health outcomes.
These differences imply that proposed changes to health insurance policies, including those proposed by presidential candidates in the 2020 election, will affect each state differently.
Senator Sanders’ Medicare for All (S.1129): An Integrated Analysis
Under current law, we recently projected that the percent of the population without medical insurance will more than double over the next 40 years, growing from around 10 percent today to over 27 percent by 2060. Under Sanders’ Medicare for All, the uninsured rate would essentially fall to zero by design.
We project that the Sanders’ Medicare for All would improve population health by 2060, reduce the share of the population that is seriously ill from 15 percent to 13 percent, increase life expectancy by 2 years, grow the population 3 percent, and increase worker productivity.
Taken literally, Sanders’ plan lacks a financing mechanism, which by long-standing CBO and PWBM convention implies deficit financing. Under deficit financing, we project that the Medicare for All Act would reduce GDP by 24 percent by 2060, despite large efficiency gains from lower overhead and reimbursement costs.
As a presidential candidate, Senator Sanders, however, has stated his intent to also increase taxes, although he has not specified the actual tax changes tied to Medicare for All. Accordingly, we also analyze two alternative financing mechanisms that mostly finance benefits received by workers. With premium financing, where most workers pay the same insurance premium (subsidized for lower-income workers)—similar to private insurance with no risk adjustments—we project that GDP increases slightly by 0.2 percent by 2060. With payroll tax financing, where workers with higher wages pay more, GDP falls by 15 percent.
We also provide various robustness checks to key model assumptions and plan design. For example, without the expansion of plan benefits to include long-term care or dental, but still including the elimination of most deductibles while covering all workers, GDP increases by 12 percent under premium financing. These results indicate that Medicare for All could be designed in a way that boosts economic growth.
Medicare for All: Comparison of Financing Options
We analyze a stylized mandatory single payer system (“Medicare for All” or “M4A”) system that provides the same benefits currently available under Medicare to the working-age population. This brief lays the foundation for future analysis of plans that expand Medicare benefits and coverage while also seeking additional cost savings.
We project that under current law, the percent of the population without medical insurance will more than double over the next 40 years, growing from around 10 percent today to over 27 percent by 2060.
We project that a shift to a mandatory single-payer system (Medicare for All) increases life expectancy by almost 2 years, grows the population size by 3 percent, and increases worker productivity through improved health, before macroeconomic feedback effects.
The choice of funding mechanism, however, is critical for macroeconomic performance. We project that financing M4A with a premium that is independent of a worker’s labor income would increase GDP by about 16 percent by 2060 through a combination of cost savings and productivity increases. In contrast, financing M4A with a new payroll tax that is proportional to a worker’s labor income would reduce GDP by roughly 3 percent, whereas deficit financing would reduce GDP by almost 15 percent by 2060.
The Unintended Consequences of Linking Patient Satisfaction Scores to Physician Pay
Study finds that patient satisfaction scores are related to factors other than health. Linking these scores to physician pay could lead to lower compensation for young female doctors and incentivize doctors to prescribe controlled substances at higher rates.
W2019-2 Physician Characteristics and Treatment Modalities in Relation to Patient Satisfaction Scores in Outpatient Primary Care Practices
Authors: Efraim Berkovich and Alison J. Leff
W2018-3 How Initial Conditions Can Have Permanent Effects: The Case of the Affordable Care Act
Authors: Florian Scheuer and Kent Smetters
A Discussion of the White House FY 2019 Budget
In a recent podcast and article “The White House Budget: What’s the Reality” by Knowledge@Wharton, the latest budget proposal by the White House was discussed by Kent Smetters (Wharton), Alan Auerbach (UC Berkeley), and David Kamin (NYU).