Why We Need a Public Health-Care Plan

[scandal 951]

I'm conflicted about this entire debate over a Public Health-care option.

Why?

I'm a Democrat.

I'm a "librul".

I certainly want to see major health care reform passed this year. I want to see it cover all the uninsured. I want to see it protect workers who lose their jobs from suddenly losing coverage for themselves and their families. I want to see it lower costs and improve the efficiency of health care delivery. I want to see every health care dollar spent in America yield the greatest social good and public health benefit.

Also, I've lived in countries (Canada, Israel) that have had universal health care for decades and who's citizens consider it a birthright. And those countries had a single-payer model and variations on a government provided public option (Each Canadian province has a virtual monopoly on providing healthcare, in Israel there are 4 heavily regulated insurance pools with set rates that people can choose between). I'm not averse in principle to a public system.

However. I'm patiently listening to the arguments made from left and right here in the US on this issue, and I find myself in this case not really agreeing with either side. Republicans are not saying they won't support health care reform. They're simply saying there is no need for a public option, that existing private companies can perform the task. Democrats are saying that a Public option is mandatory for real reform.

Now, I'm not naive. I know that the insurance companies form one of the most powerful lobbies in Washington and are twisting every arm they can to get their view across. And I know their track record, of escalating costs and inefficient service delivery. I don't agree that we should just leave the private system intact, unchanged. That won't deliver cost reductions.

But the arguments put forth by Democrats (see a very good example in the article here by Robert Reich) are not convincing me either.

Essentially, the argument is that we need a public option to compete with the private plans and force them to drop prices and improve service. In a nutshell, that's the argument.

Excuse me?

If we had a clear market failure, a clear inability of private businesses to compete on a level playing field, then I would see a role for government to step in. But is that what we're saying? That private companies are absolutely unable to compete with each other? Or just that they haven't done a good job of it so far? I think it's the latter. In which case, why not use the most effective tool ever devised to deliver the services consumers want at the lowest cost: the private competitive marketplace. This is America - land of capitalism. If the private sector hasn't competed well in the past, I say draw up ground rules and regulations to ensure a level playing field which allows new entrants and encourages genuine competition. Do some classic trust-busting, if necessary. We broke up Standard Oil back when it was John D. Rockefeller's trust. We busted up the railroads. We busted up AT&T into the RBOCs. In each case real competition ensued, and consumers benefited. So maybe today what we need to do is some busting of Aetna and BCBS and Humana to get real competition between them. No doubt that's not what THEY want - that's why we don't hear lobbyists (or paid-off Republican congressmen) calling for it. But we also don't hear ANYONE , left or right, calling for it. WHY??

Why is the choice only between the miserable system we have, or a public provider? Why not a fully private marketplace with REAL competition between those private companies? To my mind, ALL the benefits Reich cites in this article could be achieved by a truly competitive private marketplace. The benefits are great, I just don't see why we need a public provider to achieve them.

See ..... if they'd let me.... I'd write the WSJ editorials!! Until then, VJ is stuck with me.

http://online.wsj.com/article/SB124580516633344953.html

Why We Need a Public Health-Care Plan

Without the government as competition, the private sector has little incentive to improve.

By ROBERT B. REICH

Why has health-care reform stalled in Congress? Democrats, after all, control both Houses, and President Obama, whose popularity remains high, has made universal health care his No. 1 priority. What's more, an overwhelming majority of the public wants it. In the most recent Wall Street Journal/NBC News poll, 76% of respondents said it was important that Americans have a choice between a public and private health-insurance plan. In last week's New York Times/CBSNews poll, 85% said they wanted major health-care reforms.

So why the stall? Mainly because Congress can't decide how to pay for it. The hardest blow came last week when the Congressional Budget Office (CBO) estimated that the trial-balloon bill emerging from the Senate Health Committee would cost a whopping $1 trillion over 10 years and would cover only a fraction of Americans currently without health care. According to the CBO, another tentative bill, this one coming out of the Senate Finance Committee, would cost even more -- $1.6 trillion.

That spells political trouble. Republicans who never batted an eye over George W. Bush's wild spending habits have become born-again fiscal hawks. Blue Dog Democrats are nervous about mounting deficits. Even the president admits that the flow of red ink in future budgets keeps him up at night.

No one wants to raise taxes or even be accused of thinking about the subject. But honest politicians have to admit that universal health care will require additional revenues. The likeliest sources are limits on certain tax deductions and a cap on tax-free employer-provided health care. Would the public go along? The most intriguing finding in last week's New York Times/CBS poll was that most respondents said they would be willing to pay higher taxes to ensure everyone had health insurance.

But before we even get to this point, it's important to recognize that those terrifying CBO cost projections significantly overstate the costs. They did not include potential cost savings from the lynchpin of health-care cost containment: a so-called public option that would give people who don't get health care from their employer the choice of a public insurance plan. Why? For the simple reason that the Senate committees hadn't yet agreed on a public option. Yet without a public option, the other parties that comprise America's non-system of health care -- private insurers, doctors, hospitals, drug companies, and medical suppliers -- have little or no incentive to supply high-quality care at a lower cost than they do now.

Which is precisely why the public option has become such a lightening rod. The American Medical Association is dead-set against it, Big Pharma rejects it out of hand, and the biggest insurance companies won't consider it. No other issue in the current health-care debate is as fiercely opposed by the medical establishment and their lobbies now swarming over Capitol Hill. Of course, they don't want it. A public option would squeeze their profits and force them to undertake major reforms. That's the whole point.

Critics say the public option is really a Trojan horse for a government takeover of all of health insurance. But nothing could be further from the truth. It's an option. No one has to choose it. Individuals and families will merely be invited to compare costs and outcomes. Presumably they will choose the public plan only if it offers them and their families the best deal -- more and better health care for less.

Private insurers say a public option would have an unfair advantage in achieving this goal. Being the one public plan, it will have large economies of scale that will enable it to negotiate more favorable terms with pharmaceutical companies and other providers. But why, exactly, is this unfair? Isn't the whole point of cost containment to provide the public with health care on more favorable terms? If the public plan negotiates better terms -- thereby demonstrating that drug companies and other providers can meet them -- private plans could seek similar deals.

But, say the critics, the public plan starts off with an unfair advantage because it's likely to have lower administrative costs. That may be true -- Medicare's administrative costs per enrollee are a small fraction of typical private insurance costs -- but here again, why exactly is this unfair? Isn't one of the goals of health-care cost containment to lower administrative costs? If the public option pushes private plans to trim their bureaucracies and become more efficient, that's fine.

Critics complain that a public plan has an inherent advantage over private plans because the public won't have to show profits. But plenty of private plans are already not-for-profit. And if nonprofit plans can offer high-quality health care more cheaply than for-profit plans, why should for-profit plans be coddled? The public plan would merely force profit-making private plans to take whatever steps were necessary to become more competitive. Once again, that's a plus.

Critics charge that the public plan will be subsidized by the government. Here they have their facts wrong. Under every plan that's being discussed on Capitol Hill, subsidies go to individuals and families who need them in order to afford health care, not to a public plan. Individuals and families use the subsidies to shop for the best care they can find. They're free to choose the public plan, but that's only one option. They could take their subsidy and buy a private plan just as easily. Legislation should also make crystal clear that the public plan, for its part, may not dip into general revenues to cover its costs. It must pay for itself. And any government entity that oversees the health-insurance pool or acts as referee in setting ground rules for all plans must not favor the public plan.

Finally, critics say that because of its breadth and national reach, the public plan will be able to collect and analyze patient information on a large scale to discover the best ways to improve care. The public plan might even allow clinicians who form accountable-care organizations to keep a portion of the savings they generate. Those opposed to a public option ask how private plans can ever compete with all this. The answer is they can and should. It's the only way we have a prayer of taming health-care costs. But here's some good news for the private plans. The information gleaned by the public plan about best practices will be made available to the private plans as they try to achieve the same or better outputs.

As a practical matter, the choice people make between private plans and a public one is likely to function as a check on both. Such competition will encourage private plans to do better -- offering more value at less cost. At the same time, it will encourage the public plan to be as flexible as possible. In this way, private and public plans will offer one other benchmarks of what's possible and desirable.

Mr. Obama says he wants a public plan. But the strength of the opposition to it, along with his own commitment to making the emerging bill "bipartisan," is leading toward some oddball compromises. One would substitute nonprofit health insurance cooperatives for a public plan. But such cooperatives would lack the scale and authority to negotiate lower rates with drug companies and other providers, collect wide data on outcomes, or effect major change in the system.

Another emerging compromise is to hold off on a public option altogether unless or until private insurers fail to meet some targets for expanding coverage and lowering health-care costs years from now. But without a public option from the start, private insurers won't have the incentives or system-wide model they need to reach these targets. And in politics, years from now usually means never.

To get health care moving again in Congress, the president will have to be clear about how to deal with its costs and whether and how a public plan is to be included as an option. The two are intimately related. Enough talk. He should come out swinging for the public option.

Mr. Reich, professor of public policy at the University of California at Berkeley and former Secretary of Labor under President Clinton, is the author of "Supercapitalism: The Transformation of Business, Democracy, and Everyday Life" (Alfred A. Knopf, 2007).

[Hilarious Clinton 452]

"If you think health care is expensive now, wait until you see what it costs when it's free."

P.J. O'Rourke

[Niels Bohr 72]

surely the government isn't making it free....they just make it cheaper with more competition it'll make the private firms cheaper....afterall, healthcare costs is for the most part administrative cost to operate the firm

Edited June 24, 2009 by Niels Bohr

[rebeccajo 14]

"If you think health care is expensive now, wait until you see what it costs when it's free."

P.J. O'Rourke

Why don't you and Mr. O'Rourke try being uninsured in America with a progressive genetic illness for which there is no "cure" other than maintenance medication. Why don't you try paying for your $700 per month in prescriptions that you need to keep the illness in check.

And don't talk to me about how you don't want to pay for somebody else's health care through tax dollars. If you are lucky enough to have health insurance, you are already paying for other people's health care. A dollar out of your pocket is a dollar out of your pocket.

[rooster 1]

Danette and I have had this discussion before. In Nova Scotia you pay @ 15 cents HSC & taxes for every dollar spent in purchases. We already pay close to 9 cents now here in Oklahoma. That would only be a 6 cent increase. I pay $430 a month for health insurance. I have to buy a lot of stuff over a 1 month period, for that 6 cent increase to add up to the $430 I am paying now for insurance. PLUS, they won't kick anyone out of rehab services once the yearly allowance for such is met. Believe me, right now they have no qualms about doing this!!!

[Ban Hammer 13,656]

like sheep to the slaughterhouse.

[Nessa 23]

a pubic health care, hmm, interesting.

[Mr. Big Dog 10,747]

It's funny how some keep pretending that the jury is still out on the question whether a publicly run healthcare system is more efficient than a privately run system. The numbers are on the table - have been for years. We pay by far the most per capita for health care while receiving the overall lowest service in return and are at the bottom when it comes to any public health indicator among comparable, developed, industrialized countries. This picture isn't going to change unless the private health insurance mess that rips each and every one of us off day after day, year after year is fixed once and for all. Put them in check with a public plan that they have to compete with.

[Trumplestiltskin 5,791]

I hope Cheney can do something about this when he is in office.

[one...two...tree 2,762]

It's funny how some keep pretending that the jury is still out on the question whether a publicly run healthcare system is more efficient than a privately run system. The numbers are on the table - have been for years. We pay by far the most per capita for health care while receiving the overall lowest service in return and are at the bottom when it comes to any public health indicator among comparable, developed, industrialized countries. This picture isn't going to change unless the private health insurance mess that rips each and every one of us off day after day, year after year is fixed once and for all. Put them in check with a public plan that they have to compete with.

Irrational fear.

[scandal 951]

It's funny how some keep pretending that the jury is still out on the question whether a publicly run healthcare system is more efficient than a privately run system. The numbers are on the table - have been for years. We pay by far the most per capita for health care while receiving the overall lowest service in return and are at the bottom when it comes to any public health indicator among comparable, developed, industrialized countries. This picture isn't going to change unless the private health insurance mess that rips each and every one of us off day after day, year after year is fixed once and for all. Put them in check with a public plan that they have to compete with.

Irrational fear.

Is it?

I agree with Mr. Big Dog on this :

" The numbers are on the table - have been for years. We pay by far the most per capita for health care while receiving the overall lowest service in return and are at the bottom when it comes to any public health indicator among comparable, developed, industrialized countries. This picture isn't going to change unless the private health insurance mess that rips each and every one of us off day after day, year after year is fixed once and for all. "

That is a succinct and correct statement of the problem.

OK.

Now, what's the solution? Mr. Big Dog, you suggest the currently fashionable approach in Democratic circles: "Put them in check with a public plan that they have to compete with."

What I'm saying is we should get this right. It's too important a thing to do it wrong.

There seems to be a range of alternatives here on a spectrum:

- at one (left) extreme - go to a mandatory single-payer government-run system. Essentially extend Medicare to include all Americans and take the private insurers out of the game altogether.

- at the other (right) extreme - leave the current private system intact, and tinker with it around the edges to make some minor improvements. Possibly add mandates and regulations to require compulsory insurance for everyone, similar to the Massachusetts model.

In between those extremes lie other alternatives.

The notion of a public provider that competes directly with private plans is one possible alternative, but hardly the only one.

Democrats argue that they are not on a "slippery slope" to a single payer system, that they want only to improve competition and thereby lower costs and improve service. Republicans attack that, claiming it IS a slippery slope to the hidden agenda Democrats really have, which is to abolish private insurance altoghether (aka "socialized medicine").

I don't know if there is a hidden agenda or not. Perhaps Democrats are being earnest that they want only a limited role for a public plan, and want to retain private plans for all those Americans who are happy with their current insurance. Perhaps not.

What I do believe is that the argument presented for the public plan doesn't make sense to me - that it's the best way to improve competition.

I think if Dems want a single payer plan - fine. Say so. Advocate the expansion of Medicare.

Otherwise, if you claim a private insurance market is a good thing - then strengthen that market place. Level it, permit new entrants, do some trust-busting. This idea that we will improve competition with a special "uber-private" plan (public, yet autonomous and competing with private plans) makes no sense to me.

The public payer model is not what's best, by anyone's standard. It's simply what's politically expedient and which was proposed as a way to get something through Congress. I'm certain those who propose it would actually prefer a single payer plan if they thought they could get the votes. Hence my gut feeling that Republicans are right, it is a hidden agenda towards single-payer. That would be fine by me, I would just like a little more honesty in the debate.

Big Dog, Steve, RJ others -- it would be great to have a real discussion of this important issue by those who care about it and are willing to think it through.

We can just ignore the usual inevitable VJ peanut gallery comments. As stated in the article I posted 'In last week's New York Times/CBSNews poll, 85% said they wanted major health-care reforms." Americans do want reform, and they want it now. You wouldn't always know it from reading VJ OT threads, but this forum is hardly representative of what is going on in the country.

[Niels Bohr 72]

You know another interesting thing is the Pres of Blue Cross Blue Shield, UnitedHealth Care, Harvard Pilgrim, or whatever have in common. They all receive bonuses that are in the high millions, and a salary in the high millions.

If a household pays $400/month to health care, that's $3,600/year. And, how many household need to pay to supplement the salary of the CEO? Lets see, about 300 household. This is simple minded persuasion.

Anyway, I really think it's messed up with these private insurers. Lots of secrets scheme they have. Reduce quality and increase the fees. That is another thing that those insurer has.

[Chica Yeyé 41]

Holy Molly... scandal is on a roll people!!!

Having lived in Canada, Mexico and the US; I must say a two-tiered system would be my way to go- and i can also say the most fvcked up system of the three is the American one. Why not have public health care for those who cannot afford private insurance as a right; and provide the option for buying insurance as well?

[Mr. Big Dog 10,747]

Otherwise, if you claim a private insurance market is a good thing - then strengthen that market place. Level it, permit new entrants, do some trust-busting. This idea that we will improve competition with a special "uber-private" plan (public, yet autonomous and competing with private plans) makes no sense to me.

The public payer model is not what's best, by anyone's standard. It's simply what's politically expedient and which was proposed as a way to get something through Congress. I'm certain those who propose it would actually prefer a single payer plan if they thought they could get the votes. Hence my gut feeling that Republicans are right, it is a hidden agenda towards single-payer. That would be fine by me, I would just like a little more honesty in the debate.

I will be the first to come right out and say it - a single payer system is what will surely deliver the most efficient service. Is it perfect? No. Is it better than we have today? Yes. Will it cost less than what our system costs us today? Yes. Will it improve our overall quality of health indicators? Yes. Does it have a chance to be implemented in the US in the near to mid-term? I'm afraid not.

With the single payer option off the table - it simply isn't going to happen - let's look at alternatives. What would it take to get to something at least near universal coverage solely in the private marketplace? Requiring private insurers to cover anyone regardless of pre-existing conditions, age, etc. Is that going to happen? Realistically, not in my lifetime.

So, where, if not in a public pool, do you capture those uninsurable in the private marketplace?

Is universal coverage all it takes to get this monster we've allowed the private industry to create and have us pay for tamed? Certainly not. There are a number of other issues to be addressed - such as the compensation practices for medical providers. As long as they are paid on a per-procedure basis, you better believe that patients will have more procedures performed on them than actually necessary. That's how doc makes the money. Can't blame him for making his living. And then there's the rather difficult issue of medical malpractice liability that needs to be addressed in a way that protects patients while not exposing medical providers to undue burdens. Many tests and procedures are performed today not only because that's how doc makes the money but also because that's how doc covers his behind for potential later medical malpractice cases. And there are more issues to look at and tackle.

None of these issues, however, address the 30%+ in red tape that this inefficient, wasteful current private enterprise system sucks out of our overall healthcare expenditures.

One last thought: What really bugs me is how profit rather than public health is front and center of our current system. That's just wrong, in my opinion. We don't focus on profit over safety and security when looking at public services such as police and fire fighters.

[Trumplestiltskin 5,791]

That's my problem with Obama's plan - not so much of a radical reform as a papering over the cracks.

The focus is on getting everyone covered, I'm less convinced that there's as strong a commitment to address the root problems and lower costs.