Philadelphia faces a $1 billion budget shortfall over the next five years. Based on the Pew findings that Philadelphia healthcare costs would increase by about 5% per year it is probably reasonable to project about a $1.5 billion savings over that period if single-payer healthcare is enacted, thus converting a $1 billion deficit into a $500 million surplus.

Here is the analysis I did when the Pew study came out. My analysis did not include savings attributed to lower Workers’ Compensation taxes. It also did not project savings past 2008 since all the ingredients necessary to make those calculations were not available. It was nevertheless clear that Philadelphia faced rising annual costs for healthcare, and that a single-payer plan would save them more money with each passing year.

Regarding the information referred to in this article that I just spent some time looking over the Pew study.

An analysis of the numbers makes a startling case for why single-payer makes so much sense.

The City of Philadelphia employs 28,701 people and in 2008 will pay $13,030 per employee for health insurance. The city payroll is $1,461,387,249, and the city will spend 26% of that total ($374 million) on health insurance in 2008. Worse yet, the per capita cost of health insurance is projected to increase by 23% from 2008 to 2012.

Pew was not addressing the viability of a single-payer plan, so they didn’t run the numbers, but I did.

Current (2008) cost to the City of Philadelphia for employee health insurance: $374 million (26% of payroll).
What current cost would be if our proposed single-payer system were in place: $146 million (10% of payroll)
Single-Payer Savings: $228 million in 2008 alone.

In reality, single-payer would save substantially more than $228 million per year since the cost of health insurance is projected to increase by an average rate of nearly 5% per year over the next five years.

Philadelphia also pays out an average of $9,150 per year for health insurance for each of its 5,396 retirees (retirees get health benefits for only 5 years after retirement), costing it another $43.5 million per year. That cost would vanish under a single-payer system since they are not longer on the city payroll, bringing 2008 savings to nearly $272 million.

These are hard, cold numbers. Can you make a better case for a single-payer system? What an economic stimulus this would be to the city of Philadelphia! Likewise for other cities, including Reading.