Suddenly, the public auction is the Charles de Gaulle of the healthcare debate: resurgent, victorious, beloved by all. I'm not sure I get it.
The only way the public option saves money is by using fiat to slash reimbursement rates to some variation on Medicare reimbursements: Medicare +5%, +10%, or whatever rate they finally settle on. Otherwise, it's unlikely that the thing will even compete on an even basis with private insurers, who have a lot more experience managing billing, claims experience, and negotiations with providers.
The problem is, Medicare doesn't pay the average cost of providing services in many cases--in some cases, it doesn't even pay the marginal cost of providing services. Conservatives frame this as Medicare "free riding" on the private sector, but that's not necessarily correct. The fixed costs of the health care industry are, as the name implies, fixed--they have to be averaged over the entire population of patients. Now, if you think that without Medicare, seniors would consume a lot less healthcare, the population of patients with private insurance would still have to pay for most of those fixed costs. So as long as Medicare patients generate more revenue than the marginal cost of treating one additional patient, they're profitable for the hospital--and probably even lower everyone else's bill a little bit, by at least partially defraying some overhead.
Of course, if you think that in a universe without Medicare, many or most seniors would probably have found a way to consume a bunch of health care, then yes, Medicare is free riding.
But moral calumny aside, the thing about patients whose insurance doesn't cover the average cost of treating them is that they cannot be 100% of your patient pool. Someone has to cover the cost of that MRI machine. If the public option does manage to crowd out other insurance--as it might well do, with the ability to dictate price controls--then suddenly, the public option won't be cheap any more. Hello, fiscal crisis.
That's the financial problem. Here's the political problem: if you insert a strong public option, the providers will revolt.
You've already lost the insurers. Try to reimburse hospitals and doctors at Medicare + 5% for any large segment of the market, and you'll lose them too. Health care reform is likely to survive the defection of the much-hated health insurance industry. I doubt there is any way at all that it survives negative ads from coalitions of doctors, hospitals, and other assorted healthcare workers. I don't see Obama having much success getting on the radio one Saturday morning to complain that doctors are all a bunch of lying obstructionists.
The House dealt with the problem by sweetening the deal for physicians: they "fixed" Medicare's Sustainable Growth Mechanism, which would slash physician reimbursement by more than 20% if it weren't ritually repealed every year.
The problem is, this costs money, almost $250 billion over ten years. This made the House bill cost more than Obama wanted to spend, and also, not so deficit neutral. The CBO is not going to find another $200 billion worth of surprise dynamic effects to keep the final bill from adding to the deficit over the ten-year window. And the tax increases the House wanted to implement have two major problems: it's unlikely they'll get through the Senate, and if they did, they would pretty much completely exhaust the remaining politically acceptable revenue sources available to help close the existing, gaping budget deficit.
Either way, a bill with a strong public option looks to me like a bill that can't pass. What am I missing?
Copyright © 2010 by The Atlantic Monthly Group. All rights reserved.
"I'm not sure I get it."
Reid needs something to give up in negotiations.
It's a non-starter and won't be part of the final bill; but Republicans need something they can be against all the while making sure Reid has just enough votes to pass health care nationalization.
Republicans are making it happen for Reid and the Democrats. Without Republicans' help, he couldn't get it done; but thankfully for Reid, there are enough turncoats in the GOP to ensure Democrat victory.
Interestingly, the administration seems to be relying on Reid more and more. I found a pretty telling video that shows Candidate Obama promising to show health care negotiations on C-SPAN, while President Obama seems to be letting Harry Reid write the bill behind closed doors:
http://www.youtube.com/watch?v=RmNdV0PSRy4
That's just because you're framing it wrong.
If you stop calling it the public option, and instead change that to Pelosi's term, 'the competitive option', you can then see how it will save money and increase competition.
Somehow...
Oh, come on, it's plenty profitable. With a Step 1 of "Steal Underpants", how could it not be?
One of my favorites!
http://www.southparkstudios.com/clips/151040
At the moment I prefer Cartman's wish for the Sea People to "take [him] away from this crappy god damn planet full of hippies." Except I would prefer it if the Sea People took away the hippies.
"What am I missing?"
Perhaps they feel compelled to throw SOMETHING to the liberal left because what they are doing in NY, NJ, and VA does not seem to be working.
From today's Real Clear Politics - http://www.realclearpolitics.com/
"'09 Polls: NJ: Christie +3,+4 | VA: McDonnell +15,+11 | NY23: Hoffman +5"
"... what they are doing in NY, NJ, and VA does not seem to be working."
I'm not so sure ...
You have Newt Gingrich campaigning in New York (from Georgia) for a liberal who votes 90% of the time with Democrats ... helping her raise money, urging her election ... and the NRCC running ads against a solid voting Republican.
Whatever the Democrats are doing ... it seems to be working pretty good since they have famous Republicans giving money and aide to liberals.
Why, it's almost like the Democrats have infiltrated the Republican Party and are running their candidates with Republican money.
That seems like a pretty good plan from a Democrat point of view.
"That seems like a pretty good plan from a Democrat point of view."
The most recent poll that I can find: http://www.realclearpolitics.com/politics_nation/2009/10/ny23_poll_hoffman_5.html
"Hoffman leads Democrat Bill Owens by 5 points and GOP nominee Dede Scozzafava by 20 points."
I know that the quality of polls varies all over the place however, in this poll, the Democrat is down 5 points just two weeks before the election.
We'll see next week how accurate that poll was (I have my doubts).
I did notice that the Republicans aren't running ads in Maine against Olympia Snowe ... the Republican who single-handedly saved health care reform for Barack Obama in the Senate.
Funny how the Republican Party is helping the Democrats on every vote and running ads against Republicans.
It's ... odd.
You have Newt Gingrich campaigning in New York (from Georgia) for a liberal who votes 90% of the time with Democrats ... helping her raise money, urging her election ... and the NRCC running ads against a solid voting Republican.
Do you know anything about NY? Obviously you don't. Being for reproductive rights and same sex unions(and occasionally friendly to unions) makes one automatically a Democrat? No matter what her other stands are? Does every single Republican have to be 100% pure? Did you know that Fightin' Bob LaFollette was a Republican? He sure as hell wouldn't fit in today's Republican party. And you wonder why us evil libruls laugh at you while you go the way of the Whigs.
Scozzafava has run with the support of the Working Families Party http://www.workingfamiliesparty.org/ in the past.
This is not simply about "reproductive rights" and "Same Sex Unions". It is also interesting to hear a "librul" defending her. What is that about, I wonder? (rhetorical question, I don't wonder at all about what concern trolls say)
BTW, I live about 10 miles from NY 23, so I do know a little bit about upstate NY, where I was born.
This -- "Otherwise, it's unlikely that the thing will even compete on an even basis with private insurers, who have a lot more experience managing billing, claims experience, and negotiations with providers." -- is not an argument. It's just another assumption of both cause and effect (sorry, hypothetical). I mean, you could make an argument, but you didn't.
And if the argument were made, it would have to account for the government being responsible for about 40% of those insured in this country; that doesn't sound like "inexperience" to me.
But the government doesn't handle insurance like an insurance company. It sets rates by fiat, bills through the tax system, and handles pooling issues by raising taxes or borrowing money. A government entity trying to compete as an insurance company, rather than as a government agency, has no competitive advantages, and quite a few competitive disadvantages.
"A government entity trying to compete as an insurance company, rather than as a government agency, has no competitive advantages, and quite a few competitive disadvantages."
Are you just bleepin' with us? Seriously, are you just bleepin' with us?
Mike
I look forward to bailing out Fannie Med in 2014.
MBunge, why do you find that statement so unbelievable? Seems pretty straightforwardly true to me.
Advantages - the government can borrow at t-bill interest rates. A private insurer cannot. The government has the power of law, and sovereign immunity when it disallows some treatment and someone dies. The private company does not.
rvman
Disadvantage - governments f-up everythin they touch. I mean something like 50% of public school teachers is CA send their own kids to private school. Not to mention that approx 14million people are eligible, for but not participating in MedicAid now.
Megan,
Your economics are all wrong.
First, a government entity has the following advantages:
#1 Lower overhead. Doesn't spend money on profit, doesn't spend money on trying to identify recissions, doesn't spend money lobbying, etc... Medicare's overahead is much low than private insurance.
#2 Potentially larger risk pool. In insurance, larger pool equals lower risk equals greater efficiency.
These advantages are not insignificant. In fact they end up as gigantic cost savers.
Beyond that, even if they had no competitive advantage, they would provide competition in markets that often have little if any competition.
Private experience in risk adjustment is a non-argument. Insurance is not rocket science and the government can hire employees that have experience from the private sector.
Second,
The public option as proposed would cover people that are not currently insured. As long as the price paid is higher than the average marginal cost of treatment, these additional patients will help providers not hurt them. I'm not about to take your word that medicare +5% is going to be lower than the average marginal cost of care on average. Prove it.
Third,
Fixed costs are not fixed for all time, they reflect long term investments. All proposed policies are phased in with plenty of notice. Whatever the result, providers can adjust their fixed costs appropriately if given ample time.(as they are) A better argument about the current policies might claim we should phase the public option in more slowly.
Fourth,
Your point about "sweeteners" from adjusting Medicare's rates is probably more deceptive than it is wrong. This adjustment has been made by Republican Congresses every time the Sustainable Growth Mechanism was about to kick in; ever since Republicans passed this policy in the mid-90s.
The bottom line is that Republicans started this Sustainable Growth Mechanism game. They should have stuck to their policy in the first place, rather than creating the expectation of repeal by continuously repealing it.
The best case you could make might be that this is a stick and not a carrot; that Dems might be threatening *not* to do this periodic adjustment. Though, as far as I'm aware no one has said anything like this publicly.
Daniel:
Another McArdle-style syllogism.
Major Premise: Libertarianism is good;
Minor Premise: I am a libertarian;
Therefore: Hypothetical stated as fact.
"Otherwise, it's unlikely that the thing will even compete on an even basis with private insurers, who have a lot more experience managing billing, claims experience, and negotiations with providers."
I've got to echo Daniel. The above statement seems to be based on theories about how the insurance business should work and willfully ignorant of how it actually does work.
Mike
No, it's just based on the notion that it's hard to create a company out of whole cloth in a fairly mature market.
So, all the folks in the insurance industry and their affiliated political types are just plain dumber than you?
Mike
I think Megan meant experience at not paying the bills. Insurers are good at that. Too good.
The public option is just single-payer lite, and as with single payer the idea is that a public option will save money on overhead. Fewer paper-pushers, less advertising and marketing, that sort of thing. I'm sure you think the idea that a government entity could be more efficient than a private one is absurd, but not everyone holds that particular dogma.
Couldn't have said it better myself.
The government is definitely not known for reducing the paperwork/paper-pusher load; government bureaucracy doesn't pay its administrators too richly, but it sure does have a lot of them, and rules to go with them--it's simply the nature of the beast, particularly in our process-obsessed system. The reduction in administrative overhead achieved by programs like Medicare comes from the fact that functions that are typically performed by companies, like billing, audit, compliance, and so forth, are part of different agencies with their own budgets. Meanwhile, the government doesn't negotiate with customers or providers; you get what you get, or nothing at all. This will not be true of a weak public option.
Nor do health insurers typically have vast advertising and marketing budgets . . . this notion seems to be leaking over from the complaints about pharma. Whatever plan it is will be competing with insurers on the exchanges--insurers who can defray some of their negotiating costs against their employer based insurance clients, unlike the public options. I'm not seeing it.
"The government is definitely not known for reducing the paperwork/paper-pusher load"
I think it's been well-established that Medicare and Medicaid have significantly less overhead/paperwork than private insurance.
Mike
The reduction in administrative overhead achieved by programs like Medicare comes from the fact that functions that are typically performed by companies, like billing, audit, compliance, and so forth, are part of different agencies with their own budgets.
You'd think you might want to actually read the post you're replying to.
But Obama told us that there is hundreds of billions of dollars of waste and fraud in them.
Perhaps they could use a few more paper pushers.
No, it hasn't.
Medicare patients are by definition elderly, disabled, or patients with end-stage renal disease, and as such have higher average patient care costs, so expressing administrative costs as a percentage of total costs gives a misleading picture of relative efficiency. Administrative costs are incurred primarily on a fixed or per-beneficiary basis; this approach spreads Medicare's costs over a larger base of patient care cost.
Even if Medicare and private insurance had identical levels of administrative efficiency, Medicare would appear to be more efficient merely because of an artifact of the arithmetic of percentages — Medicare's identical administrative costs per person would be divided by a larger number for patient care costs.
In the case of private insurance, administrative costs are measured by the difference between premiums collected and claims paid. The result is that this also includes costs that are not really "administrative."
For example, many private insurers provide disease management services for patients with chronic conditions and/or on-call nurses for patients to consult by phone. Because these services are provided directly by the insurance company, they do not result in a claim being paid. In addition, most states impose a "premium tax" on health insurers; this tax is obviously not a health benefit claim. However, because all non-benefit costs are defined as "administrative," these and other similar expenditures are reported as administrative costs. In recent years, these so-called "administrative costs" have accounted for 11.4-13.2 percent of total health insurance premiums.
Claims processing is the only category that is at all sensitive to the level of health care utilization, and it is more correlated with the number of claims than on the cost or intensity of service provided on each claim. Furthermore, it represents only a very small share of administrative costs. For example, in the case of Medicare, the total claims processing expenditure in FY 2005 was $805.3 million, which represented 4.04 percent of Medicare's administrative costs — which is, in turn, only 0.234 percent (less than 24 cents for every $100) of total Medicare outlays.
Only an extremely small portion of administrative costs are related to the dollar value of health care benefit claims. Expressing these costs as a percentage of benefit claims gives a misleading picture of the relative efficiency of government and private health plans.
I think it's been well-established that Medicare and Medicaid have significantly less overhead/paperwork than private insurance.
Sure, unless you count the IRS, which does all their revenue-gathering.
No, Mike, you've been deceived. They don't have significantly less overhead/paperwork than private insurance. They just let other government agencies budget for those functions with the costs attributed to them and not to Medicare/Medicaid.
Didn't 60 Minutes just run a program on widespread Medicare/Medicaid fraud? I'd be interested in seeing a comparison in the fraud frates for private insurance.
I still think the lack of a profit motive and the advantage of having one administrative staff doing work that dozens of different staffs once did will be enough, and I see the fact that the government could parcel out some services to other agencies who already do the same sort of thing as an advantage, not a problem. But you do make a fair point in that having enrollees pay their bills is harder/different than pulling money from a tax-supplied slush fund.
Of course, to me that's just another argument in favor of single-payer...
The idea that somehow a lack of profit motive would lead to cost reductions I find repeated as though it were not a pretty surprising claim. Where do we find other examples in which we can compare cases with and without a profit motive, and in which a profit motive adds costs? Similarly: where do we find a government agency "keeping for-profit businesses honest"? Does the Post Office help keep UPS and FedEx pricing in line? These seem to me astonishing claims, getting past the reality check phase only because they are being repeated in lots of places. I'd be interested in real-world examples where they are thought to be exemplified.
Well, there's the whole thing where every other first world country delivers health care more effectively than we do by almost any metric using non-profit government-run systems.
I'm not a true anti-capitalist, I think in most areas a profit-motive is beneficial. One of the reasons for this is that it encourages businesses to innovate, providing more and better goods and services to the consumer. In the case of health insurance, however, most of that innovation has been negative: denying claims or denying people who are likely to file claims is simply the best way for them to cut costs. Add to that the fact that every penny paid in dividends or executive bonuses is a penny not used for sick people and it makes plenty of sense to me.
I don't really expect that to be convincing to people who think the private sector is axiomatically more efficient. But then there's really no reason for a conservative to support HCR anyways, I don't know why Obama is wasting so much time pretending there is.
I still think the lack of a profit motive and the advantage of having one administrative staff doing work that dozens of different staffs once did will be enough
Using this same reasoning, I can predict the Soviet Union will emerge triumphant in the Cold War.
It's a little scary that people are already starting to forget the essential lessons of the 20th.
Well, there's the whole thing where every other first world country delivers health care more effectively than we do by almost any metric using non-profit government-run systems.
No, in fact they are worse by almost every metric.
U.S. does 2x as many transplants as Europe
U.S. has the best cancer survival rates in OECD
Death panels in Britain are putting people to death who could have recovered
Death panels: now in kids' sizes too! Infants being left to die.
U.S. has about twice as many MRIs as OECD average
U.S. gets new drugs 1 year sooner "On average, the FDA approval came 1 year ahead of clearance by the European Medicines Agency (EMEA)."
"Prostate cancer mortality is 604 percent higher in the United Kingdom and 457 percent higher in Norway."
"The top five U.S. hospitals conduct more clinical trials than all the hospitals in any other developed country"
U.S. performs more operations than any country in the world.
Lower U.S. life expectancy does not argue U.S. has worse health care
Sorry, I have links for all these but Atlantic doesn't let me post them.
That's an argument not just for nationalizing health insurance, but for nationalizing health care, steel, railroads, automobile manufacturers (whoops!), fast food chains, coffee shops, law firms . . .
"Well, there's the whole thing where every other first world country delivers health care more effectively than we do by almost any metric using non-profit government-run systems.
. . .
In the case of health insurance, however, most of that innovation has been negative: denying claims or denying people who are likely to file claims is simply the best way for them to cut costs."
So your complaint is that healthcare costs too much in this country and also that private insurers don't pay for enough of it?
Leftneck,
I never saw an on point reply to philosophermark's second point questioning "where do we find a government agency keeping for-profit businesses honest'? I think we can find government agencies regulating the market to keep it honest. Not entering it. Or both. Seriously would like to see the idea either supported or refuted. Not just repeated.
"government bureaucracy doesn't pay its administrators too richly"
When you factor in wage stagnation in the private sector, plus generous lifetime government benefits and "double-dipping" of "retired" civil servants, I don't think this statement is as true as it one was.
The so-called "public option" is being pushed because, as any number of them - including Obama -have stated in the past, it is the Left's preferred tool for quickly destroying the private U.S. health insurance industry. The actual effects on costs and service levels are irrelevant. The whole health care "reform" push has, at its core, nothing to do with health care really. It's about the Left being in charge. The ceaseless quest for greater and greater control of everything is the bottom line in everything the Left does.
Sorry, Dick, who are this mythical "them" you're talking about?
How about not talking until you have something useful, as well as factual, to say.
Barack Obama and other prominent Democrats (like Barney Frank) are on videotape admitting that the public option is designed specifically to lead to the elimination of private health insurance and to a single government payer.
I will link you directly to these videotapes if you persist in suggesting that they do not exist.
Please do.
Here is the link.
I won't even disagree with you that to many the public option is a step on the path to single payer. However, the motivation there comes from the fact that many if not most liberal believe single-payer to be the most effect method of providing health care, not from manelvolent desire from control as Dick Eagleson argues.
By the way, that's the sort of thing that sets our racist-dar off. Even the angriest liberals ascribed rational, human motives to BushCo (usually greed). Many conservatives, however, insist Obama that wants all sorts of terrible things as ends in themselves. Its hard for us to believe that you really think Obama actively wants to destroy America or implement a communist regime, so we naturally speculate that you have other motives that you're not willing to publically air.
Or maybe it's all Jonah Goldberg's fault, I don't know.
leftneck:
He was "BusHitler" over greed? He supposedly refused to prevent 9/11 over "greed"? Do we really wanna break out the logs from DemocraticUnderground to show what the angriest on the left REALLY felt? The signs at anti-war rallies saying "No war for Israel" and "no war for Zionist pigs" while a devil wearing a swastika set the Earth on fire?
And I do love how many euphemisms the left has trotted out...."public option", "single payer", "competition"...all to prevent saying the truth. Government Run Health Care.
1) Obama said in 2003 saying he supports a single-payer system;
2) Later, he said he wants to end, not private insurance, but employer-based coverage. But, regardless of how one feels about single-payer, we all want that, right?
3) There are countries who have public insurance without a single-payer system;
4) There are countries who have single-payer systems and still have private insurers;
5) Most importantly, the current "strong" bill forbids the vast majority of employees of using the public option;
6) What some politicians would like to ultimately have isn't politically possible. Perhaps it would be if there was 3 or 4 Democratic administrations with large majorities in the House and Senate. But this is not likely to happen.
Wait ... Nimed.
First, you defy people to produce links to Mr. Obama's on video statements that he is after the end of insurance as we know it, as if he never said any such thing.
And then, when provided with videotaped proof, you toss out his six talking points explaining why what he wants really isn't what he said he wants and can't get politically.
And you wonder why nobody trusts your president?
Here's a story about Obama fucking over a Michigan Democrat.
Bart Stupack is catching on about how what President Obama says today isn't really what he said. People in his own party can't even trust Barack Obama.
http://thehill.com/blogs/blog-briefing-room/news/64971-mich-democrat-pelosi-not-happy-with-me
Fraggle:
Yes..? Bush was accused of all sorts of terrible things, but they were always alleged means to an alleged end, which in turn was usually enriching certain groups of people. Truthers basically say that 9/11 was to provide a pretext for Iraq. Iraq, in turn was supposed to be about oil or security contracts. You also had people saying Afghanistan was about that pipeline. "BusHitler" is agitprop, a slogan for a sign rather than an actual argument, and the Zionist stuff is a red herring (stemming more from the all-inclusive shit-show that is an ANSWER protest than from anything people actually thought about Bush). Besides, the leftist critique of Israel is basically the same: "they stole a bunch of land, and have been oppressing the Palestinians ever since to hold onto it." Hell, "people do bad things out of greed" pretty much is the leftist critique.
I'm not denying the anger, the lack of civility, or even the crazy, but the only non-material motivation for Bush I've ever heard anyone argue was that it was all about Saddam trying to kill his dad, and that was neither common not especially leftist.
I honestly doubt you'd find many counter-examples in comments sections, and none at all in respectable sources, except for maybe that guy who was diagnosing Bush with mental illnesses. You're welcome to try and find them... or you could just figure out a critique of Obama that doesn't rely on him having 'lawful evil' motivations that no non-fictional person has ever had.
Fraggle:
Yes..? Bush was accused of all sorts of terrible things, but they were always alleged means to an alleged end, which in turn was usually enriching certain groups of people. Truthers basically say that 9/11 was to provide a pretext for Iraq. Iraq, in turn was supposed to be about oil or security contracts. You also had people saying Afghanistan was about that pipeline. "BusHitler" is agitprop, a slogan for a sign rather than an actual argument, and the Zionist stuff is a red herring (stemming more from the all-inclusive sit-show that is an ANSWER protest than from anything people actually thought about Bush). Besides, the leftist critique of Israel is basically the same: "they stole a bunch of land, and have been oppressing the Palestinians ever since to hold onto it." Hell, "people do bad things out of greed" pretty much is the leftist critique.
I'm not denying the anger, the lack of civility, or even the crazy, but the only non-material motivation for Bush I've ever heard anyone argue was that it was all about Saddam trying to kill his dad, and that was neither common not especially leftist.
I honestly doubt you'd find many counter-examples in comments sections, and none at all in respectable sources, except for maybe that guy who was diagnosing Bush with mental illnesses. You're welcome to try and find them... or you could just figure out a critique of Obama that doesn't rely on him having 'lawful evil' motivations that no non-fictional person has ever had.
movertyperguy, I'm not moving the goalposts. Obama really never said such thing in the video. What he says is that he wants to end employer based insurance.
To be specific:
There's a large caption saying "OBAMA ADMITTING HIS PLAN WILL ELIMINATE PRIVATE INSURANCE (OVER TIME)", and then the video shows Obama saying that he wants to eliminate employer based coverage. These are far from being the same thing. In fact, eliminating employer-based insurance is largely a bipartisan objective.
and then the video shows Obama saying that he wants to eliminate employer based coverage. These are far from being the same thing.
Not far enough. Whether his preferred solution was, it's a safe bet it involved more government and less free market. People who oppose single payer probably don't care about the distinctions between government plans.
You're welcome to try and find them... or you could just figure out a critique of Obama that doesn't rely on him having 'lawful evil' motivations that no non-fictional person has ever had.
Mao and Stalin weren't fictional, however unlikely totalitarianism is to take root here.
Whatever one thinks of Obama's agenda, it's a bizarre and ahistorical reading of human nature to claim people aren't motivated to more power for its own sake.
*Whatever his preferred solution was
leftneck:
Nope, that would be racism, you know, that thing you accuse anyone who dares disagree with Obama of harboring.
Greed is just a red herring.
And frankly, allowing thousands to me murdered by Islamists is hardly "rational". Truthers are insane. Those comparing Bush to Hitler did not do so because they thought he was greedy, but because he was evil and like murdering non-whites.
Glad you're here to explain to me what liberals think, Fraggle Rock.
No one believes or believed Bush did the things he did because he liked killing people or hated a certain race. Even his harshest critics only thought he didn't care about who he hurt in the pursuit of his goals, not that he liked hurting people. If you chose to believe otherwise and turn your opponents in caricatures, you're only hurting yourself.
And for the record, I do not think anyone who disagrees with Obama is racist. For one, I disagree with him all the time. The author of this blog, as another example, disagrees with Obama all the time, and don't think she's racist. If you can provide sane, fact-based reasons for your opposition to Obama then there's no reason to think you have a racist motivation.
But if you think socialism and fascism are synonyms and the man who might as well be called Clinton II has a secret plan to bring it to America and/or destroy it... well, frankly, I hope it's just a front for racism, because otherwise you're nuts.
While the construction is awkward, an average high school level of reading comprehension and effort would have made the reference of "them" clear: the Left.
So perhaps you should start with applying your advice to yourself? Your acidic comment added nothing to the debate except perhaps a revelation of your ideological bias.
Huh? New entrants into markets often have trouble breaking in when there are incumbents, and it's generally agreed that the regulatory and compliance barriers to entry are pretty high in the health insurance market. Or, like I said, the new kid on the block is likely going to have a hard time competing with experienced competitors who already have existing relationships and experience managing the market. Maybe the incumbents are all so bloated that they're ripe for the picking--but if so, how come no one is entering any of these markets, only exiting?
"the regulatory and compliance barriers to entry are pretty high in the health insurance market"
Ah, but these surely won't apply to Fannie Med! I'm sure that Barney Frank, Nancy Pelosi and others can find a way to cut through all the red tape (but only for the one 'competitor' with a special relationship with the government). And if reducing the red tape for Fannie Med doesn't give it enough of an advantage, there are many, many regulations that could be imposed on all other providers. After all, when it comes to regulation, more is better, right?
This is not persuasive in the least.
New entrants don't come into the market supported by billions of dollars in taxpayer money, a new "exchange" set up in part to provide them with customers, and a commitment of the federal government to support it.
The new government entrant is simply not the same as new private entrants, and it makes no sense for Megan to analyze it as if it was.
Wait a minute. Why should the public option need taxpayer money? I thought it was going to be supported by premiums only? Private businesses aren't subsidized. Why should the pulbic option?
If the public option isn't going to be subsidized by the government, then how will it change anything? Without subsidies, it's just one more competitor. We could do far more by just allowing coverage to be sold in all States.
Of course the subsidies don't have to be explicit. They might primarily involve exemptions from regulation (which will of course lead to some really onerous regulation of the competition).
Plus, they bring the legendary work ethic, discipline, and focus of the unionized government worker. It's just not a level playing field.
Government workers are the worst. I have worked on-site at government offices (for consulting companies), and I can tell you first hand that many government workers do very little. One guy's job was to handle a certain type of request, let's call it a RQO-13. He refused to do anything but RQO-13 requests because his job description only entailed RQO-13. The problem is that when he was hired in like 1990, the agency received dozens of RQO-13s per year, but since 2000, the agency received like 12 of them. So he just read books in his office all day. Unbelievable.
And forget working past 5 pm, even if there is work to be done.
Actually, what happened here in Maine is that all the expensive folk signed up for Dirigo early, providing a better pool of less-sick folk for Anthem/well-point/blue cross -- whatever you want to call it, the company that's in the business of ripping us off while not paying for our medical care here.
So the state had to put a cap on subsidies available to Dirigo enrollees.
My guess is that you'll see some of the same kind of thing nationally; private insurers slightly undercutting the public option for all those healthy young folks out there, while higher-cost folks end up on the public option.
You're assuming a "strong" public option; one that would kill the deal. But this is politics, not policy, so maybe it's just a pretty meaningless public option so the left can say "we won," or can at least be persuaded to support the bill, while the CBO still makes a nice prediction.
The weird thing about all this is that we are once again discussing a "proposal" the content of which is still a secret. Kind of like back when the President told us it was time to stop debating the plan he had yet to introduce.
Suddenly, the public auction is the Charles de Gaulle of the healthcare debate: resurgent, victorious, beloved by all. I'm not sure I get it.
That's because public auctions are much more fun than private ones.
I take this as a sign that Democrats in the House and Senate know health care reform is a dead issue. Knowing it is going to lose anyway, why not put up a bill that the far/farther Left will vote for overwhelmingly, pacifying their base, and that the Blue Dogs can vote against, as they have already promised to, to polish up their fiscal conservitude? It works even better if the Democrats give just enough votes in the Senate to defeat cloture. That way they can blame Republicans for the defeat and be factually correct (this is better than having the bill fail in the House). It even allows Democrats to brag about how they didn't destroy Senate rules and traditions in a push to win at any cost.
I think this may very well be the strategy underway. The Democratic leadership has finally realized that passing their Left's dream of nationalized health care is tantamount to electoral suicide in 2010
That's was my immediate assumption. They know reform is going to fail and this is an attempt to make sure it remains a campaign issue.
Hope you're right.
By the way, "a federal government run health insurance plan (a public option" is currently running at 8 at Intrade.com. Does that include this kind of opt-out plan? Because someone really doesn't think it'll pass.
Yes, according to the contract specific rules...
http://www.intrade.com/jsp/intrade/common/c_cd.jsp?conDetailID=683800&z=1256666557672
...a public option that has either opt-in or opt-out will not fulfill the Intrade contract.
Got it! Thanks for clarifying that.
I'm betting whatever they pass ends up adding a trillion dollars in net spending over the first ten years, and three times that in the next ten. They're barely pretending to pay for it.
Megan,
I also think it is probably pointless to even wonder about cost shifting between public and private systems the way we tend to. The truth is that the full cost of both is borne by individuals- in other words, Medicare and Medicaid are funded with payroll, income, and excise taxes on both the recipients, and even more so, on nonrecipients. One way or another, the cost of those on public plans gets shifted onto those with private health expenditures.
In reality, yes. But you forget that the government only cares about the money that comes out of any one pocket at a time.
If the costs are shown on the Medicare side, then that won't show up on the public option side, and so forth.
I think the simpler endgame is that providers just refuse to accept the public plan like they would any other insurance that tried to force down the reimbursement rates to medicare + 5% or whatever other magical number they wanted to pick. Unless providers are required to accept the public plan or would be prohibited from accepting medicare if they also accept the public plan then I really don't see what the big deal is. The public plan isn't a magic wand- its just another non-profit insurance company. The bigger curiousity to me is what happens when the public plan becomes insolvent.
Already saw it. The federal gov't buys it out and hands it over to the union.
"Unless providers are required to accept the public plan or would be prohibited from accepting medicare if they also accept the public plan then I really don't see what the big deal is."
Medicare subsidizes in-hospital physician training (i.e., residency). It would be quite easy for a govt plan to modify or cease a funding program - that's done all the time in Washington, given the broad regulatory powers the bureacracies have. A govt run plan will make decisions based on politics, e.g., there is this language in the House bill: "HHS shall give preference to entities that have a demonstrated record of training individuals who are from underrepresented minority groups or disadvantaged backgrounds . . . the secretary shall design and implement the payment mechanisms and policies under this section in a manner that seeks to reduce racial and ethnic disparities." So it is up to the HHS to decide what constitutes a "racial disparity", and then independently "design" funding mechanisms to do what it perceives is necessary to redress such.
"The bigger curiousity to me is what happens when the public plan becomes insolvent."
If that happens, the govt will be compelled to backstop it, just as it has Fannie and Freddie and will quite possibly do soon for the FHA. Of course it was DC politics that actively facilitated the policy changes which led to insolvency. My guess is that when the govt plan busts the blame will be put on providers and insurers, leading to the "fairness" and "cost" needs of a single-payer system.
OTOH, I don't see how they get the public option in with Lieberman now saying he will filibuster.
Watch the elections. If Deeds somehow pulls out a win and NY-23 and NJ both go Dem, maybe. If Dems lose all three, forget it.
First, Reid's opt-out public option is not a "strong" public option. The definition of strong public option seems to be one that reimburses based on Medicare rates (either Medicare, or Medicare +5%), requires providers to accepts its members, or both. Reid's plan would negotiate rates with providers. And i see no reason why it would get better rates than the large insurers do, In fact if providers are smart they would refuse to do business with the public option to minimize the risk that it would become become large enough to dictate rates to them at some future date.
Meghan is absolutely right about the strong public option -- doctors and hospitals would oppose it and it has no chance of of becoming law.
Reid does not have the votes for his opt-out plan. My take is that he's doing to please both the national progressives and to improve his re-election chances in NV.
There isn't anything useful about the idea of fixed costs in looking at anything of this scale, especially when changes this big are contemplated. It's silly. Any of these cost structures can and should change dramatically. The health care industry has massively bloated fixed costs, as they are understood at an operational level by health care firms. That has to change fast.
There are enough turncoat Republicans to ensure its passage. Don't worry too much Megan, we'll get a robust public option yet along with Barack's other grab-bag of socialist goodies.
Megan McArdle said
What you're missing is that what they call "strong" is, in fact, weak. What you're missing is this:
http://voices.washingtonpost.com/ezra-klein/2009/10/can_you_reform_the_health-care.html
Few people will be covered, so costs be low.
Ugh. Of all the reasons to oppose a public plan, preserving the idiocy of employer-based coverage is the worst.
"Here's the political problem: if you insert a strong public option, the providers will revolt. ... You've already lost the insurers. Try to reimburse hospitals and doctors at Medicare + 5% for any large segment of the market, and you'll lose them too. Health care reform is likely to survive the defection of the much-hated health insurance industry. I doubt there is any way at all that it survives negative ads from coalitions of doctors, hospitals, and other assorted healthcare workers."
I enjoy Megan's analysis of economics, and usually think she is right. But when it comes to politics, I think Megan doesn't know what she's talking about. They've already got the doctors on board - is there any chance that the AMA switches sides on this? No. These constituencies will be public neutral at worst. They know that even a strong public option will continue to pay them large amounts, no matter what this particular legislation says. And the point about driving private payers out of the business is probably decades away from occurring.
Please, Megan, stick to economics and don't try to analyze politics.
You're kidding, right? They bought AMA support with the SGR fix. No fix, AND lower reimbursement rates in the private market? I think it's very likely that the AMA switches sides.
The AMA is not a very good representative of the nation's physicians, the vast majority of whom are far more dedicated to their specialty's association. Pay has been steadily eroding for almost two decades now, and there is little support for an option that leads to further cuts or more government control.
As I posted in another thread on this general topic, if you look at incomes orthodontists make more than the vast majority of physicians. General dentists make salaries at least at par with average physicians, and better than general-practice physicians. Neither of those groups takes call or works weekends, and they get paid mostly by their patients rather than insurance companies. Offer to cut physician pay to Medicare + 5%, and you'll gut the market.
Alsadius,
My comments are based in the established fact that just about every industrialized country that utilizes government-run health care/insurance spends far less money than the U.S. while having populations that are relatively as healthy or healthier than the U.S. How are they able to achieve cost-savings if they have no "competitive advantage" and must labor under "competitive disadvantages" compared to the private-run U.S. health care system?
Or to put it another way, which do you think costs more to deploy - a platoon of American soldiers or a platoon of Blackwater/XE mercenaries?
Mike
Platoon of US troops. Remember the logistics. And training. The US troops have mucho already invested in them and thier heavy equipment. Plus retirement and bennies. The Mercs are short time contract forces that have no benefits to be paid for. Yes it looks like it's more expensive at face cost, but it's the hidden costs that kick yah in the tookus.
Yeah, the math on this one is pretty simple, really. If it wasn't cheaper to use companies like Blackwater, why would a nation with a perfectly serviceable army ever have outsourced to them? They have to offer some benefit to be worth using, after all.
Those other countries do not have large populations (in more than one way) living off corn syrup. It's the number one component of the US diet. You can thank the low-fat movement for that one.
That sort of dietary issue is actually why Americans are so unhealthy, not access to doctors. Which is why this whole healthcare reform misses the point. Reform what goes into the body and you will have a population that doesn't need to access healthcare except for stuff like broken legs and car wrecks. And it is far cheaper to get better food into american tummies than to haphazardly adopt an unclear and fiasco-brewing 'public option'.
We went over this last month.
It's all very good waving your hands and saying "it is far cheaper to get better food into american tummies..." but when it came down to concrete proposals to do just that, nobody could argue a convincing case.
end subsidies for corn, soy and wheat. send the actual scientific data on saturated fat and cholesterol to doctors (hint: they're both great for you, even in massive amounts).
return bison to the open plains. there is plenty of open land, both public and private for them to be bred on in large numbers since they do in fact live on scrub grass and don't actually need feed. we could all be eating grassfed bison for less than the combined costs of a 'cheap' corn-syrup based diet and resultant diabetes/preemie/cancer expenses.
there are links to most modern illnesses and poor nutrition, including joint problems, premature births, and several cancers (such as stomach cancer).
it really is very cheap to have everyone eating food that is full of omega 3s and cholesterol and high-quality saturated fat rather than the stealth trans fats hidden in canola and soybean oil.
The solution to the real problem is hard. So lets try an expensive solution to a non-problem instead!
So you think that a less-unhealthy diet will result in a lack of cancer, pandemic-of-the-week flu, premature babies, joint replacements, and all those other wonderfully cheap things that a modern medical system provides care for?
it already demonstrably does. there are lower rates of many cancers and things like premature birth where people have better consumption of saturated fat, such as france.
what mothers eat is key to prematurity, and american mothers have absurd levels of vitamin d and omega 3 deficiencies, to name two biggies.
"Either way, a bill with a strong public option looks to me like a bill that can't pass. What am I missing?"
seriously? what are you missing? they don't care about costs. they may care about perceived costs but actual costs are something they don't have time to deal with. they have more important things to do like throwing $17 million at a gas station to honor Jimmy Carter and buy some votes from the national park service.
thankfully i really don't care anymore. vote 3rd party.
MBunge -
Comparisons in quality of health care between countries are often misleading. The U.S. system is substantially better than, say, the U.K. in regards to early diagnosis and treatment efficacy for major disease such as prostate cancer and coronary. Mortality rates that do not adjust for societal differences (in the U.S., smoking and obesity) or differences in definition (a stillborn premature baby is counted in the U.S. but not in Japan) make comparisons difficult if not irrelevant.
What disturbs me most (well, almost most) is that the only option we seem to be offered for a public option, is on the U.K./Canadian model of a govt run system (which are going broke fast, even with rationing). The universal care systems in The Netherlands and Switzerland provide excellent quality and are delivered entirely through the private insurance market.
American health care is the toppest of top-quality, but it suffers from not being 'redistributed' enough. We get dinged for not being sufficiently mediocre across our population (because we are too large to be sufficiently excellent-- only countries under 10 million can play that game due to the logistics and density issues).
We are also penalized for having 300 million where canada has 30 million and the uk 60 or 70 million, etc. we are never compared to countries with 100 million or more, because there aren't any 'industrialised' countries that liberals like with 100 million+ people. And the logistics of providing access to care for 300 million widely distributed, heterogeneous people are more complicated than doing the same for 30 million or even 70 million more homogeneous people that live mostly in cities or very near to a city.
If 90% of the american population was concentrated in ny and la, healthcare access would be significantly easier to accomodate.
I don't understand this remark. The National Health in the UK is true socialized medicine, like our VA, and the Canadian system is single payer, like our Medicare. Nothing proposed by Reid resembles the National Health. Essentially, it's Medicare (on an optional basis) for people who don't receive medical benefits from their employers.
I agree with mingus in one regard. There would be no need for a public option if our health insurance industry was as tightly regulated as the systems in the Netherlands and Switzerland. Given the role that money plays in American politics, this seems impossible, which is why I back a strong public option.
As far as Megan's post goes, it's disingenuous. As far as I can see, she doesn't like anything in the bill Reid's proposing. Her opposition to a public option is just a talking point.
Doctors refuse to take Medicare and Medicaid in ever-increasing numbers. I live in the PacNW and refusal rates are about 33% for medicare and pushing 50% for medicaid.
So, tell me again how another similarly priced 'public option' will increase access? Doctors currently will not accept two of the public options we have now. That doesn't add up to 'more access to doctors for poor people'.
If doctors are so opposed to a public option, why is the AMA in favor?
@Stan:
The AMA has less than 1/3 of all doctors as members (29% according to its own records on the matter). It's hardly representative of doctors in general simply because so few are members.
It would be like claiming Americans are all on board with GOP talking points because about 30% of voters claim GOP membership/affiliation.
The rolodex illusion.
What about that BusinessWeek poll that said 40% of doctors would quit?
Derek
Gee, wonder what the percentage of doctor refusals are for those who are uninsured? I believe that its a lot higher than for Medicare and Medicaid patients-indeed, near 100 percent.
Getting the uninsured insurance will of course give more of them access to health care. It's pretty simple logic-except for libertarians.
Stonetools, the refusal rate for the uninsured is nowhere near 100%. Quite a lot of the uninsured are people sufficiently wealthy to self-insure for most conditions. The rate of that isn't near 100% either, of course, but it's non-trivial.
@stonetools:
Counterintuitively, uninsured folks are refused less in the PacNW. Doctors and hospitals would rather put you on a payment plan, reduce the fee to what you can pay out of pocket, or give you care for free than deal with medicaid or medicare. A lot of people just go in with 'i have no insurance' instead of 'i'm eligible for medicare/medicaid' when they need healthcare.
The problem is, Medicare doesn't pay the average cost of providing services in many cases--in some cases, it doesn't even pay the marginal cost of providing services.
Lets emphasize "doesn't even pay the marginal costs" and examine the next stage of the argument:
So as long as Medicare patients generate more revenue than the marginal cost of treating one additional patient, they're profitable for the hospital
And by your own admission, that does not happen. It is a very serious flaw that you fail to satisfy the pre-condition of your propositional statement and then plow ahead with the argument as though you did.
Conservatives frame this as Medicare "free riding" on the private sector, but that's not necessarily correct.
Getting someone else to pay the fixed costs while you pick up only the marginal costs is free riding.
"Either way, a bill with a strong public option looks to me like a bill that can't pass. What am I missing?"
You're missing 2 things. First, as mentioned by nearly everyone, this isn't a very strong public option. It's pretty weak. Second, you're missing that while a handful of Dem Senators who are getting a bunch of dough from insurance companies CLAIM they will oppose a plan with a public option, that doesn't mean A. That this is true, given it's increasingly good polling or B. That they will support a fillibuster-- which is all that matters, because there are easily 51 Senate votes for a much stronger bill than what is on offer.
In short, what you don't get is that your assumptions about the politics of this thing are pretty simplistic and simplistically wrong.
63% of doctors are in favor of a public option, and another 10% are in favor of single payer, so regardless of how many doctors belong to the AMA, doctors as a whole are on board, at least for now
surveys do not reflect behaviors. doctors are currently, right now rejecting medicare and medicaid patients, not answering 'i would' on a survey, but actually doing so.
that i take as a more authentic note on doctor behavior than survey results.
when the medicare/medicaid and even tricare (which is very often refused) refusal rates are 5% max, then i will trust surveys appearing to show doctors favoring something when their actions are to reject that same something.
As a physician, I have been watching the argument about doctors threatening to stop accepting Medicare for many years. Every year there is a survey of doctors predicting that if this or that happens, there will be no more doctors accepting Medicare. While I agree that there is of course a bottom line amount under which doctors will stop accepting Medicare-I know I have a bottom in my practice- the dire predictions have not yet panned out. Furthermore, the public option thus far does not include a provision tying reimbursement to Medicare rates; it may at some point, but it is premature to predict that it will.
What doctors see RIGHT NOW is that we spend $67,000 a year each on administrative work associated with insurance company rules. This does not even count the amount we spend trying to get insurance companies to honor our contracts and pay us for services we have provided.
We also are really tired of seeing our patients denied necessary care by insurance companies.
We deal with the insurance companies all day, every day, and the majority of us are fed up with the strangle hold they have on the practice of medicine. I, for one, am mystified as to why anyone who doesn't work for the insurance industry, would worry for one second if they go under.
I, for one, am mystified as to why anyone who doesn't work for the insurance industry, would worry for one second if they go under.
The guy who keeps pushing for this 'public option' also thinks enough of us are happy with our insurance companies to keep claiming that we won't have to give up our current insurance. I'd say that indicates that at least a few people disagree with you.
Some doctors are. Are you saying this is a majority, or anything like it??! What a weird thing to argue.
in some areas of the country, a significant (more than 30%) number of doctors will not take medicare or medicaid. in my area of the country, about 1/3 refuse medicare and about 1/2 refuse medicaid. if you don't live where the military bases are, it is hard to get anyone to take tricare (military 'public option').
that said, in my area of the country, there is a lot of care given away for free or offered at steep cash/payment plan discounts.
so at least where i live, they won't take your insurance, but they will work with your financial limits and just give away the care as charity if you have no ability to pay (regular doctors, specialists, urgent care and ER, depending on where you go for your care.)
"Either way, a bill with a strong public option looks to me like a bill that can't pass. What am I missing?"
Megan, you are wrong. The bill can pass because there is no requirement that Congress has to think longer term and in over all national interests. There is no requirement that President Obama only has to sign fiscally balanced bills.
There, there you got it.
What Reid move shows, Sullivan calls it Chicago style politics, is that Congressional leaders are free to kick this ball as per their immediate political pressures in respective constituencies without worrying the overall effects.
Yeah, but today's story (Wednesday) is that Reid's ploy was all bluff. A public option bill will most definitely not pass the senate, not even with the bogus "opt-out" fig leaf. Reid has ostrich egg all over his face. This was, it turns out, a local politics move. Reid's main concern now is not anything you or I are concerned about unless we are related to, work for, or give money to Harry Reid. He is desperately seeking re-election. I'd say everything flows from that, but there's no "flow." Everything is about re-electing Reid in Nevada.
Coming to this late:
Otherwise, it's unlikely that the thing will even compete on an even basis with private insurers, who have a lot more experience managing billing, claims experience, and negotiations with providers.
Well, if the public option is going to be so inefficient, then those wonderfully comptitive private insurers have nothing to fear, right? That's simple logic.
The problem is, Medicare doesn't pay the average cost of providing services in many cases--in some cases, it doesn't even pay the marginal cost of providing services.
I'd like to see evidence for that , rather than a bare assertion. Thanks in advance.
Of course, if you think that in a universe without Medicare, many or most seniors would probably have found a way to consume a bunch of health care, then yes, Medicare is free riding.
This is of course, libertarian fantasy land. In the pre-Medicare universe, many seniors didn't consume any health care at all-they just went without, suffered and in some cases, died. That's why Medicare happened.
Either way, a bill with a strong public option looks to me like a bill that can't pass. What am I missing?
What you are missing is :
1. According to the CBO(whose authority you hitherto accepted) a robust public option saves the most money.
2. According to the latest polls, support for the public option has only grown, right wing lies, tea parties and death panel nonsense notwithstanding. 57% of the public wants a public option, and in a democracy, when a strong majority wants something, they should get it.
Based on the above, we should and will get a public option. Glad to help you out with the democracy thing.
Well, if the public option is going to be so inefficient, then those wonderfully comptitive private insurers have nothing to fear, right? That's simple logic.
If it was possible to drive the public option out of business, you'd have a point. But you can't compete on a level playing field with someone who covers losses by levying taxes.
I'd like to see evidence for that , rather than a bare assertion. Thanks in advance.
Large numbers of doctors refuse Medicare/Medicaid patients. According to them, it doesn't pay the marginal costs, or else they would presumably accept them. Obviously, it varies by practice, and I'm sure there are people making their analysis on issues other than the bottom line(on both sides), but if it's a sizeable fraction, then that says it's pretty close to the marginal cost for a lot of them.
This is of course, libertarian fantasy land. In the pre-Medicare universe, many seniors didn't consume any health care at all-they just went without, suffered and in some cases, died. That's why Medicare happened.
I think it was you who said in a previous thread that before Medicare, almost half of seniors had no insurance - i.e., more than half did have insurance. Five decades and a pile of economic growth later, we can presumably do better. I can't claim that "most" would have perfect coverage with any great amount of evidence, but "many" seems indisputable. Seniors, while low-income, are collectively pretty rich. If they need something badly enough, most will find a way to pay for it. Not all - as you say, some will suffer and die. There's a reason I prefer public healthcare guarantees existing. But from the point of view of microeconomic analysis of medical practices, her point is entirely valid.
According to the CBO(whose authority you hitherto accepted) a robust public option saves the most money.
Wasn't the CBO's claim that a robust public option, supported by robust public taxation, was deficit-reducing? I may be conflating two bills here, but the CBO generally scores legislation, not plans. Are you sure you're not confusing a cost savings with a tax hike?
According to the latest polls, support for the public option has only grown, right wing lies, tea parties and death panel nonsense notwithstanding. 57% of the public wants a public option, and in a democracy, when a strong majority wants something, they should get it.
Based on the above, we should and will get a public option. Glad to help you out with the democracy thing.
Congrats. Best of luck keeping those numbers up when things actually come to the point where there's one bill that can be analyzed instead of it just being a whole lot of shadow boxing on both sides.
57% of people like the magical pony version of the public option. When you tell them their employers will be incentivized to involuntarily dump them onto the public option, support collapses.
I'm just curious if anyone writing here that a government funded health insurance program will be wasteful/inefficient/bloated/pointless etc. and in essence defending private insurers has ever had to deal with private insurers in a major medical situation. I've got the personal distinction of being involved in a case where both parties were providing medical benefits, granted, this is a one-off case study but I'm happy to share it:
In 2004 my wife was pregnant with twins, kids 3 and 4. She's a nurse practitioner at an Ivy League teaching hospital, I am a software developer so we had higher than average income and excellent coverage. In the womb it was determined that one of babies had a life threatening birth defect called CDH (Google it), essentially a hole in his diaphragm which some of his lower organs passed through and crushed his developing left lung. Very high mortality rate, 50-70% depending on what study you read.
Anyway, long story short, our sons are born, the sick one has corrective surgery, develops infection from it, spends nine weeks in the NICU, almost dies twice and then spends 18 months in therapy (PT and Speech) sessions. I live in Pennsylvania and at the time (I believe it still exists and in fact has been expanded) there was a CHIP program that covered all children born with a congenital illness, regardless of parents income or insurance coverage. Whatever our insurance did not cover the state program would.
Like I said, we are fortunate in having good jobs and we probably could have absorbed the cost our insurance but it was nice, in retrospect, to be able to focus on our son and his treatment and not have any additional stress weighing down on us. His hospital stay cost just north of $2M, the surgery alone was $400,000. Three or four X-rays a day at $65 a pop, never mind the ultrasounds, the fifteen different meds they were feeding him, surgical and NICU staff and so forth.
So here's the relevance to this debate. We had Blue Cross/Shield at the time and I can remember my wife having to call them almost every week because they billed us for items which they should have covered. We were constantly getting billed for $400, $500, $1000 for procedures they should have covered. I'm not talking co-pays here that the state would cover and we had to pass the cost along to, these were items BC/S should have covered outright. I don't remember ever having any major issues with the state coverage. Even our county had a easy as pie program that provided us a visiting nurse.
I realize this is just anecdotal but I wanted to counter a lot of the government=inefficient private sector=honey and milk service comments. Inefficiency thy name is HMO in my opinion. You folks speak as if the private sector is just a well oiled machine, do you not have cable, own a phone, have electricity, an appliance, a bank account at a major institution? Sure, a lot of those companies make gobs of money, and they do so by nickeling and diming their customers, but I wouldn't quantify many of them as efficient or providing quality service.
This is not to carry the government's water despite my personal experience, I would just consider that a government run opt-in insurance program would be no more or less efficient than what Blue Cross/Shield or AETNA delivers to their customers.
I am inclined to agree. Democrats should let the American people see what’s in the health care bill. I found a video that shows Candidate Obama promising to show health care negotiations on C-SPAN, while President Obama seems to be letting Harry Reid write the bill behind closed doors:
http://www.youtube.com/watch?v=RmNdV0PSRy4
Two points may suggest what you are missing.
The first is that very few people actually know what the public plan would mean for them. Those doctors who are supporting the 'public plan' are guessing about how they will be paid, since there is no clear description yet on rate setting and payment. Most people who are supportive are unaware that in the absence of the Wyden amendment for free individual choice very few people with existing employer-provided coverage will have access to the public plan benefits,such as they will be,even as the rest will suffer from any impacts. So much of the support is based on hopes that the evil insurance companies will be done away with,not on any realities of a public plan.
The second point is that the Congressional representatives from the coastal states are going to vote against the interests of their constituents and their states. The uninsured and the likely beneficiaries from the health care reforms are in the red states,while those who will be taxed to pay for the changes are in the blue states. Draining these revenues from the blue states will further hurt the local economies and encourage health care system employment growth in the red states. Normally this should lead to Congressional delegations voting for the interests of their states and seeing the blue state delegations working harder to get reforms that help their constituents. But they are not. The why of this probably has to do with Congressional longevity and gerrymandering.
It should also be noted that if there is a 'public plan' organization,most of the work will most likely be outsourced to private service providers,as Medicare does in many cases. Who says that there will be no profits available in the public plan?
I think you might want to do some research into which sets of states are draining resources now.
I don't think anyone is arguing that the private system is perfect or well oiled. Its a question of relative merit. Much like democracy, market capitalism is the worst system... except for all the rest.
Look- all the issues and problems we forsee in government run healthcare are indeed present in the private system. The difference is that in the private system those issues can be reformed, via regulation or expanded competition. They are inherent in the government, and there is no recourse.
What a lot of us are saying is- its indeed not fair that insurance companies can ignore their contractual obligations etc. Fine- change the law back so that they must obey their contracts. Thats a stroke of a pent that costs the government ZERO. Initiate tort reform, allow interstate insurance sales, reform the tax code. These are all incremental steps that will help but dont have huge price tags... aside from political ones.
The fact that these problems exist now is due to our political class in bed with special interests. I don't see how snuggling up further in those politicians/government's bed will help in the long run. Lets snap these corrupt relationships and try to right the ship one step at a time, instead of doubling down on these idiot politicians and their thousand page bills.
Funny how hundreds of thousands of jobs in the insurance industry are expendible because the
because of the greedy insurance execs who manage to milk a 2% profit margin out of their industry, all the while subsidizing Medicare and Medicaid
I guess they will all be forced to go begging the govt for jobs... but that's not a bug, it's a feature!
Not to mention medical care for the indigent via emergency rooms. Those evil bastards!
"I am inclined to agree. Democrats should let the American people see what’s in the health care bill. "
I have a feeling, since the bills in both the house and senate are online for you to read, the FINAL bill will also be online....you know, when the bill is finally written and combined with the house bills.
I'll take that bet. I have a strong feeling that whatever monstrosity is finally cobbled together in the dark of night will be voted on as quickly as humanly possible before somebody starts readin the thing and parsing out all the deal breakers on CNN (or Fox more likely).
Thats how they handled the stimulus bill, i see no reason this won't be the same. They are playing a ludicrous game- flood the field with a dozen different bills and then anything that is sketchy you can write off as 'not written in stone'. I bet you once everything IS written in stone there wont be time allotted to study it.
Megan,
You're looking at the public option as an end in itself and asking why it lingers on? But the Democrats don't see it that way. They won't let it go because it's not an end, but a means to an end. It was created to bypass public resistance to government expansion into the health care system. Jacob Hacker himself (the author of the public option) has said so. Indeed he has said that one of its chief strengths is it allows you to "claim" it's about choice, even as it moves us toward single-payer.
Rep. Schakowsky let the cat out of the bag back in April when she indicated (to a group of single-payer advocates) that the goal was to allow the public option to expand at the expense of private insurers. Russ Feingold is on record supporting the PO as a means to this end. Rahm Emmanuel has indicated it's a "strategy." One of HCAN's spokesman has equated the public option with single-payer and encouraged single-payer advocates to think strategically, knowing they can "fix" it later. Paul Krugman is on record (on two different occasions) stating that this is the end-game for the PO. Ezra Klein has said it (twice) as well.
They can't say so openly because if the wider public learned this was the goal, support would plummet. Now that Robert J. Samuelson has broken the log jam on this story, I'm hoping others will follow and examine the evidence.
Here's what I think is going on, and I don't think this is tin foil hat stuff:
1.Create a public option to get a foot in the door for the government. It doesn't have to be financially viable (of course) so...
2.Legislate a mandate for insurance companies to take all comers (no more preexisting conditions), while making the penalty for not having insurance so low that there is a huge incentive not to buy insurance until you get sick. You'd be a fool not to.
3.Point 2 will rapidly bankrupt private insurers as they end up with a pool of only sick people. Premiums will skyrocket in an attempt to stave off collapse, driving most everyone into the public option (point 1, they don't care if they hemorrhage red ink).
4.We end up with a de facto single payer system, with the few remaining private companies acting as gold plated supplementals.
I pretty much have to believe this is the democrats gameplan, because to put forward these plans and not realize these outcomes are inevitable would they are all completely brain dead, instead of just mostly brain dead.
I agree Mark. The democrats want to say that the public option will be completely self sustaining based on incoming premiums and without any additional supplements from the government. But I think there is literally zero chance that the public option will be able to cover what democrats consider to be "fair" while also only charging what democrats consider to be "fair" and the fund will quickly become insolvent as the obvious problems manifest themselves. At this point because its a PUBLIC OPTION! then it will be bailed out. Of course this is the same as supplementing the public option up front but it will be spun differently. And this will continue on indefinitely.
I really have no problem with a public option in theory. Give the liberal dems 10 billion or so to start their own national co-op free of the evils of corporate greed. IF they are right that for profit insurance companies are the problem then it will thrive. If they are wrong and it fails then it should be allowed to fail.
spot:
My fear is that is that this "experiment" won't stop at S10 billion. After that amount is gone, there will be a Fannie Med bailout blamed on the usual suspects or a forced march to the single-payer panacea.
We end up with a de facto single payer system, with the few remaining private companies acting as gold plated supplementals.I pretty much have to believe this is the democrats gameplan
I doubt you're right about this being the Democrats' game plan. But if you are, sign me up, because you've just described a system that is considerably better than America's -- indeed it may be the world's best healthcare system -- that of France.
you mean the same french system where the poor are simply refused care with zero consequence?
you mean the same french system where the poor are simply refused care with zero consequence?
No, I mean the French system called the world's best by the World Health Organization:
http://www.businessweek.com/magazine/content/07_28/b4042070.htm
Also, you're not claiming that in France "the poor are simply refused care" with the frequency they are in the US, are you? Although it is true that federal law requires emergency rooms to stabilize a patient's condition, there is no legal requirement that the healthcare system treat people for ongoing, chronic conditions like diabetes, cancer, CV disease, HIV, etc. At least there is no legal requirement now. That's what Obama and the Democrats and trying to remedy.
Each of you reactionaries will regret you opposition to Obama's great leap forward!
Thing is, I really think that's the plan, not a bug.
Megan,
One more thought. Are you aware of the massive contradiction in your argument? At the top you argue that medicare's reimbursement rate is too low. At the bottom you argue that it costs too much to perform the ritual upward adjustment of medicare's reimbursement rates.
This is much like you Pharma argument. You argued healthcare is too expensive while simultaneously arguing that failing to overpay for drugs would lead to millions of early deaths.
You can't have it both ways and pretend to live in a world that makes the least bit of sense.
None of these are contradictions. They all make sense. Perhaps you are not thinking it through carefully, and see complications as contradictions.
Indeed, perhaps you have trouble understanding logical entailment.
I suppose I do assume that Megan isn't a monster, ethically. Maybe she really is saying that we should enact policies that cause millions of people to die early deaths.
Maybe she's arguing the we should put healthcare providers out of business and so people can go back to using leaches.
If you are trying to say that Megan doesn't value human life,that would eliminate the contradiction,and I'll take it under advisement; but in absence of adoption of such a premise, the contradictions are massive.
Well, I'll try a simple response. "Costs too much" means costs too much for the federal government to pay for it. That's entirely different from the issue of what price the suppliers will supply at.
"That drill costs $100." "I can only afford $40, and I really need it." "I'll only sell for a hundred. So I'll have to sell it to someone else."
You seem to have a picture where the government has all the money there is. Not a place I want to live.