Standardized payer contracts could lower administrative costs more than 'Medicare for All': study

Researchers at Stanford (Calif.) University published an article detailing simulation-based findings on the cost-savings potential associated with single-payer healthcare models.

In a blog post published June 29, the researchers outlined their March study, which primarily focused on using a single-payer system to highlight administrative savings potential, with rising costs putting a burden on physicians. 

The researchers then ran simulations speculating that using boilerplate simple or standardized contracts between physicians and all insurers would result in decreased administrative costs. 

Using simple contracts reduced billing costs by 50 percent, using standardized contracts reduced costs by 30 percent, and using both would reduce costs by 60 percent.

They then applied the same methodology to a "Medicare for All" model and found administrative cost savings between 33 and 53 percent. These savings would be less than that of simplified, standardized contracts applied to the current healthcare system with the caveat that a Medicare for All model would retain Medicare's payment models and compliance costs.

The researchers noted the findings prove that despite the savings touted by Medicare for All proponents, the same or greater savings can be accomplished using the current healthcare system. Tangentially, the simulations serve as a way of pointing toward where the current system can be revised with cost-cutting in mind as opposed to a vast overhaul. 

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