This is a rush transcript of a portion of the audio interview done yesterday.

Rob: Gerald Friedman is a Professor of Economics at the University of Massachusetts at Amherst. He is a consultant and economic analyst on single payer healthcare and a labor historian and economist.

Gerald Friedman: You've done some very interesting work with singer payer. My understanding is the Sanders campaign is using your findings. Is that correct?

Gerald: Yes, that's about right. I might add that if the Clinton campaign decided to do the right thing, I would be delighted to work with them as well.

Rob: "The right thing" being?

Gerald: To come out for single payer.

Rob: As opposed to what do you see them doing?

Gerald: Little tweaks on the Affordable Care Act, which itself is reform of the existing private health insurance health system. A reform that has done some good things. It has brought health insurance coverage to millions of people and saved thousands of lives. But it leaves 30 million of people outside the health insurance system and tens of millions unable to access health care because of costs.

Anything that Hillary Clinton is talking about will not bring health care costs under control so that eventually, not that far off, we will be unable to afford health care. Health care costs have been rising for 40 years; I should say the price of buying the same health care has been rising significantly faster than other prices. Which has been driving, forcing us to put more and more of our resources into providing the same level of health care. And those rising costs have been pushing people out of the health care system and also forcing us to cut back on everything else we want to do as a society.

Workers haven't had wage increases so they can't go on vacation. Local governments have been paying more and more for health insurance for their employees so they have to cut back on education, they have cut back on roads. The Federal government has been unable to provide adequately for higher education, for infrastructure, because it's spending so much money providing health care. It's not as if we're getting better health care or more health care; we're getting less health care, but it's costing more and more. And nothing Hillary Clinton is talking about is going to change that.

Rob: Why is it costing more and more?

Gerald: Largely, a very few items, basically three. The rising administrative burden of operating the for-profit health insurance system. Health insurance has figured out that if they make it harder to file claims, people and providers, doctors and hospitals, will file fewer claims. That's basically using administrative red tape to drive people out of the system. And to hassle people so they will try to get other health insurance or they will just go away. Die.

Second, the rise and cost of prescription drugs, which have been rising much faster than anything else. The United States at this point pay 65% more for the same drugs than people in other countries -- and 70% more than the Veterans Administration pays for drugs. They are the only agency of the federal government that negotiates drug prices and they get lower prices; they get Canadian prices. All the rest of us pay twice as much.

Finally, monopolistic behaviors by elite, "must have" providers, notably elite hospitals. Massachusetts General charges four times as much for the same services as other hospitals. Massachusetts Hospital has been buying up and taking over other hospitals and other providers; and they keep jacking up prices. The same thing happens all over the United States. Hospitals have been consolidating, they've been raising prices, acting like monopolies. They may call themselves not-for-profit but in practice they are not taxed. They act like for-profit enterprises. That's it, with focus on those three.

The single payer system can take care of all of those problems. But nothing in the Affordable Care Act, nothing in Hillary Clinton's economic program will address those. And Clinton and many of her defenders, including prominent liberals, have basically said they understand that single payer will be better. But they lack the political will, the political strength, to take on the monopolistic hospitals, monopolistic drug companies, and the for-profit health insurance industry.

Rob: You've done this work, you've come up with these findings, for which states, organizations, etc.?

Gerald: I have done work for the United States a few years ago, for Physicians National Health Plan. I did a study for Massachusetts, one for Maryland State Single Payer Plan, one for Pennsylvania with Chuck [Pennacchio], one for Colorado, one for Oregon, Rhode Island, and New York. The NY study led to enactment by the lower house of the NY legislature of a single payer bill -- the most success we've had so far. But it's coming. And then I did an analysis for the Sanders' campaign for a national program, which is basically the work I did for Physician's National Health Plan.

Rob: There is an article in Vox, citing the work of Kenneth Thorpe.
[Emory University health care expert].

Gerald: Oh my, let's talk about Kenneth Thorpe.

Rob: Thorpe says you've underestimated, that Bernie Sanders' health care plan is underfunded by $1.1 trillion a year. Let's talk about Kenneth Thorpe and his claims.

Gerald: I have a memo that I sent to the Sanders' campaign, outlining "Thorpe's claims and how he got them. If you read his paper, which is linked to Vox by Dylan Matthews, it's very hard to figure out where he got the $1.1 trillion. He doesn't lay things out in a clear way. The reason for this becomes clear if you actually work through his numbers, such as he gives. Because he's making outlandish assumptions. And we'll come to why he might be making them in a minute.

But he's assuming a very small reduction in administrative expense -- actually, he assumes that the savings on administration will be less, from a single payer plan that does away with health insurance, private insurance, the savings will be less than we would save just from getting rid of those companies. If we replace private health insurance with Medicare, at the Medicare administrative rates -- that is, the cost for processing bills through Medicare compared to the costs of processing the same bill through a private health insurance company -- we save $200 billion. He assumes that the total savings from administration will be less than that. So he assumes no savings from hospitals, I mean hospitals have as many people processing bills, doing billing and insurance related activities, as they have beds.

If we got away from using private health insurance, almost all of those jobs would be redundant. We have 2.2 people per doctor doing billing and insurance related activities in the U.S. We don't need all those people if we had a single payer plan. Thorpe ignores all that, and so he underestimates the savings from a single payer plan by about $500 billion a year over ten years. That's half of his expense.

Secondly, it's not clear because he doesn't say anything in his memo about savings from drug prices. In a correspondence, he claims he's assuming a 20% saving in drug prices. Even that 20% is half of what we can actually get. Based on his memo alone, there's $200 billion per year over ten years in savings on drugs that he leaves out. So that's $600 billion.

He says that he assumes a single payer plan would slow the rate of growth in health care costs. It's not clear where that is in his analysis because we don't see that in the numbers. But it's interesting that he makes that an issue, allows for that. Once you assume that savings on health care prices will slow down, that's a huge benefit from a single payer plan.

Take it all together, and he's got a couple of things in there we don't need to go into. But take it all together -- he's leaving out hundreds of billions of dollars in savings. But we still don't account for $1.1 trillion -- that's because he's assuming a huge increase in utilization when we do away with co-payments and deductibles. He's assuming an increase in utilization of almost 40% -- that people will start going to doctors all the time and that will cost huge amounts of money.

Now, to be sure, if people did start going to doctors a lot more, maybe that's a good thing. Maybe that's saying the system is seriously reducing people's ability to go the doctor and causing, killing, thousands of people which is what's happening. [inaudible] wants to admit that, then that's fine. But still that, even given that, his assumption is way more than any one else has ever found when countries have shifted from private health insurance to single payer. In Canada, for example, there's an increase of utilization of about 3%. In my work, to be conservative, I have estimated an increase of utilization of about 6%. Thorpe estimates an increase several times as great -- that's how he gets his big number. He makes it up, basically.

Now why does he go to this much trouble? Here's an intelligent man who has a lot of experience. He has a lot of experience in writing proposals for single payer plans. He did that for Vermont, he did that for Massachusetts over a decade ago. And when he did his work recommending single payer in the past, his numbers were very similar to the numbers I use, that I come up with. Why has he suddenly changed directions?

Well maybe it's because he works for a lot of different people: he's taken money from Blue Cross/Blue shield, he's a lobbyist for a group that advocated private Medicare Care Advantage Plans. In the past and today he worked with the Clintons, part of the Global Initiative. And I am sure he's hoping for a good position in the Hillary Clinton administration. So is that why he reaches these strange conclusions? Conclusions that he hides in the memo that's very hard to understand? I don't know.

Rob: I wanted to get Chuck's take on it, just to get another take. Chuck Pennacchio, welcome to the show again. You were on recently. You've been very active as an activist advocating single payer. What's your take on this story with Thorpe and his difference of opinion?

Chuck Pennacchio: Well, first off, thanks so much for having me on again, Rob. And Gerry, always great to hear from you; you've been a real boost for single payer efforts across the country. You've validated working assumptions that we've been running with for quite some time and so again, great gratitude.

Gerald: You've welcome.

Chuck: I concur with what Gerry said here, that conflict of interest leads people to change their tune, change numbers, change methodology -- change how they see the world because now they are representing the very interests that are paying them to do the work. What's truly wonderful about Gerry Friedman is that he's an independent economist. He works for a university and he gets very, very little in the way of compensation for the studies that he does for us. He must work close to McDonald's-level wages, I think, for the kind of stuff that he's done for us.

There's no conflict of interest where Gerry Friedman is concerned, whereas with other economists you can just follow the money. This is really what's become of economics as a whole.

I'd actually like to hear Gerry, if he has a chance, share a couple of reflections about the state of economists, the state of economic studies, and economic discipline in this country as compared to other parts of the world. I think it really is a function of conflict of interest, a broken methodology -- it's a world view that's very ideologically driven.

And what Gerry has done, and folks from the single payer movement do, is we don't come at this from an ideological perspective, by and large. We want to look at the numbers, want to make sure the numbers add up, and they underscore what Gerry saying, which is; we're going to reduce costs, we're going to get quality health care for all people, they're going to have more choices, and there's much more.

There's going to be far less rationing of health care and we're going to be able to stimulate the economy overall with jobs, and growth, and really restore medicine back to its rightful place which is the relationship between the patient and the provider.

This is a transcript of the first 17 minutes, done by volunteer Robert Becker. We're waiting on additional volunteers to help finish the transcription. (Drop me an email rob at opednews.com) if you can help finish all or part of the transcription, even if you only do 10 or 15 minutes of it.

Read the rest of the transcript here.

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