Many Health Care Debates, All Real
Howard Dean writes that when it comes to health care "The real issue is: Should we give Americans under the age of sixty-five the same choice we give Americans over sixty-five?"
This is without a doubt an important issue, but I think progressives do ourselves a disserve when we proclaim it "the" "real" issue as if all other aspects of the health reform debate are somehow trivial or fake. Consider the basic problem of the self-employed person looking to buy insurance on the individual market. Well, if he tries to buy insurance the insurer will naturally wonder why he wants it. Is he sick? Absent the sort of large risk-pool provided by a large employer, nobody wants to sell insurance to anyone who wants to buy it. Consequently, nobody can buy any decent insurance on the individual market and everyone's ability to get health care winds up inextricably tied-up with their job. The solution is regulation -- make companies stop discriminating against people who may need health care. But this creates a new problem -- if insurers charge everyone the same flat average premium, the pool of people who actually buy insurance will be disproprortionately weighted to those (older people, women, those who are already sick) with higher-than-average costs. Consequently, insurers would go out of business and nobody would have insurance.
The solution to this is to say that insurers must sell to everyone, and everyone must buy a policy. That, however, creates yet another problem: Many people can't afford to buy decent insurance. So the government needs to step in for subsidies for those in need.
This set of policies -- regulate, mandate, subsidize -- is at the core of all the major pieces of health care legislation. It'll be good for American patients and it'll also be good for American insurance companies who'll garner additional customers. Adding a public option into thie mix would be even better for patients, but not as good for insurers. Patients are more important than insurance company profits, so the public option is worth fighting for. But it's not the whole ballgame.
But everyone, whether they can afford insurance or not, deserves a choice outside of the private system. A law that requires me to give money to Cigna is not a just law.
August 25, 2009 4:27 PM | Reply | Permalink
What youre saying is completely true. i agree with you.
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January 11, 2011 2:41 PM | Reply | Permalink
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March 23, 2011 11:39 AM | Reply | Permalink
wrong.
ask yourself who runs this country.
if we can't enact single payer, or even a public option, which you admit is better for people, what makes you think we'll get sufficient regulation?
the mandates, subsidies and regulation approach is an unnecessarily inefficient way to go about providing all Americans with healthcare and the only "people" who like it are corporations and those paid by corporations to like it.
a public option may not be the whole ballgame, but it's pretty damn close.
Robert Reich from Aug. 17th
Without a public, Medicare-like option, healthcare reform is a bandaid for a system in critical condition. There's no way to push private insurers to become more efficient and provide better value to Americans without being forced to compete with a public option. And there's no way to get overall healthcare costs down without a public option that has the authority and scale to negotiate lower costs with pharmaceutical companies, doctors, hospitals, and other providers -- thereby opening the way for private insurers to do the same.
It's been clear from the start that the private insurers and other parts of the medical-industrial complex have hated the idea of the public option, for precisely these reasons. A public option would cut deeply into their current profits. That's why they've been willing to spend a fortune on lobbyists, threaten and intimidate legislators and ordinary Americans, and even rattle Obama's cage to the point where the administration is about to give up on it.
August 25, 2009 6:18 PM | Reply | Permalink
Hey; leave Matt alone.
Times are tough, and getting a job interview with Fred Hiatt ain't easy.
August 25, 2009 8:55 PM | Reply | Permalink
Ellen, for the kill.
August 25, 2009 9:08 PM | Reply | Permalink
Part of the problem is treating insurance as the only or preferred means to pay for health care. We would not think of using car insurance to buy gas, or for regular maintenance. I realize the issues are different (much of car insurance is to insure for damage to others) but still. Insurance as presently conceived is a dumb way to pay for health care, unless you are a top insurance executive.
There are 3 basic issues: access, cost and funding. Many more people need access to basic health care, especially those who are above the Medicaid line and too young for Medicare. Those issues can be allieviated by raising the eligibility line for Medicaid and letting people between 50-65 buy at least a Medicare Part A premium at cost and some kind of supplemental coverage like Part B.
Cost issues are two-fold: cost of insurance and cost of care. One ought to be able to contract for routine care from a medical practice at reasonable rates, or, as Matt once suggested, have it provided at free clinics. Insurance costs from marketing, inflated salaries and shareholder dividends don't really belong in a health care system. Let people speculate on something else than the health of their fellows. As I said, insurance ought to be kept for catastrophes and ought to be heavily regulated. Because their won't be a lot of profit in basic policies (but only in top drawer concierge policies) there should be one or more public plans.
The other cost issue is drs and hospitals and testing costing too much, plus overtreating. The gov't should be able to negotiate bulk purchases for more people. Other costs can be dealt with basically by things like info sharing and effectivelness research, and ultimately by high marginal tax rates that trim off the overchargers.
That leaves funding. Taxpayers should pay for the poor and people somewhat above the poverty line, and for all children but the top say 20%. There might be somne subsidy involved for those who buy into Medicare, and transitioning out of employer-based care is going to be difficult. Raising the marginal tax rates and ending the preferential treatment for dividends and a .25% transaction tax on transfers of stocks, bonds, options, futures and commodity contracts (c'mon, folks, these people have seen their incomes rise about 150% while everyone has been stagnant--don't be so selfish) will help, but bringing down costs is essential to minimize the funding issues.
The main thing is for patients to take some more responsibility and for providers of all kinds to stop seeing health care as a profit center--it is just too important to let those factors drive costs up.
August 25, 2009 6:27 PM | Reply | Permalink
. . . the public option is . . . not the whole ballgame. yglesias
Given Matt's mantra -- "regulate, mandate, subsidize" -- (regulate not including limiting fees and/or premiums), anything less than a public insurance option will bankrupt us.
August 25, 2009 8:45 PM | Reply | Permalink
Why not regulate to limit fees and premiums? Germany has 200 private payers who may not alter a person's premium if he joins a new plan. They seem to still be in business. The Swiss have a similar setup.
Whether we have the world's best health care depends on the type of measure, but we surely have the world's richest doctors. Still, many feel called and would practice at Japanese incomes, which are low by world standards. This allows them to provide gobs of services at costs like $98 for an MRI, and no waiting for an office visit or surgery. I haven't heard they have a shortage of doctors.
From T.R. Reid's WaPo piece:
http://www.washingtonpost.com/wp-dyn/content/article/2009/08/21/AR2009082101778_pf.html
August 25, 2009 10:51 PM | Reply | Permalink
Why not regulate to limit fees and premiums?
We do, already -- on the Medicare and Medicaid side. But it's a self-imposed limitation (that is, doctors and hospitals can't afford not to treat Medicare patients -- too many of them and too many lucrative procedures to impose on them -- so they "freely" sign on).
But those limited fees are made up for by higher fees charged to the privately insured. Give the public insurance fund a few years to sign up insureds and it would begin to look like Medicare (no more subsidies to Medicare providers).
And there goes the neighborhood -- at least as far as doctors, hospitals, drug companies, and medical devices makers are concerned.
August 25, 2009 11:22 PM | Reply | Permalink
Something that just occurred to me --
IIRC fees in the public plan will start out at Medicare plus 5%. Are we confident that providers will accept public insurance option insureds?
Initially, there won't be that many insureds in the public plan. Providers could reject them without seriously affecting their incomes. Providers may go on strike -- if allowed to do so.
August 25, 2009 11:35 PM | Reply | Permalink
Some providers are already refusing to take Medicare patients, but the majority accept them simply because the volume of revenue from Medicare patients is so large and so reliable. If we had an even larger government-run insurance program like Medicare, I doubt too many providers would refuse to take the government-insured patients. There's just too much revenue there for providers to ignore. I do think, however, that as providers receive less money for their services, their behavior will certainly change. The question is whether the drop in profitable revenue will make them more efficient (a beneficial change) or simply result in poorer service (a not so desirable outcome). My guess is that if we simply expand Medicare and do not reform the health care delivery system, either the quality of care will drop over time or Medicare will be forced to increase its reimbursements, jeopardizing whatever cost-savings we had hoped for in a public health care program. That's one reason why I think we need to look at both health care delivery and health care financing if reform is going to produce the results we want.
August 26, 2009 7:13 AM | Reply | Permalink
Excellent post, Matt. "Regulate, mandate, subsidize" are indeed the cardinal features of effective insurance reform. They characterize almost all the other industrialized democracies that surpass us in terms of coverage, affordability, and quality. A few of these are single payer, others utilize a strong public insurance component for basic services, and a few utilize private insurers exclusively for most medical services - with strict oversight and regulation to eliminate the abuses that pervade the American privage insurance experience.
A public option added to this would confer important additional benefits, and is something "devoutly to be wished", but it is not the essential feature whose absence would render reform meaningless. Paradoxically, the principal virtue of a public option (and possibly to a smaller extent, strong non-profit cooperatives) resides to only a small extent in its ability to constrain health insurance premiums, although it would do that. If private insurers altruistically chose to forego all profits forever, obviating the need for a public competitor, health care costs would decline only marginally, and we would still find American healthcare spiralling toward bankruptcy, due to the enormous excesses within healthcare itself - duplicate or unnecessary facilities, tests, procedures, or specialty referrals, driven by a fee for service paradigm that incentivizes excess.
The greater virtue of a public option would be its flexibility and long term planning horizons, which would permit it to reward those within healthcare who chose a restructured means of providing services aimed at eliminating waste and inefficiency and accepting payment based on value rather than quantity. In theory, I suppose an extremely farsighted private insurer could attempt the same, but would meet resistance from investors demanding quick returns, and would therefore probably revert to rewarding wasteful healthcare by passing its costs on to consumers.
Whether strong non-profit cooperatives could achieve similar results is questionable, but with sufficient federal startup subsidies to allow them to gain a foothold in the market, they might be able to become very competitive. The critical need for either a public option or non-profit cooperatives would be to remain viable until some of the providers they chose to contract with restructured to the point that they could undersell those who remained outside. Additional help in this area would also require government regulations to preclude the establishment of local monopolies by private insurers by requiring competition on a broad regional or national level, including choices across state lines.
August 26, 2009 12:06 AM | Reply | Permalink
Here's a straightforward question:
How much does a triple bypass operation cost?
What share of the cost is due to the the private insurance coverage of the patient?
What share is due to the cost of the labor of surgeon and other personnel, the cost of drugs or devices needed, and the cost of using the hospital's resources and equipment and administration, etc...?
We could ask this question for any medical procedure or service.
How much of $2.4 trillion in total that we spend on health care is due to the cost of private insurance? (Remember, Federal and State governments pay for almost half of all the health care spending in the US, and about 12 percent is out of pocket)
The same dynamics that are raising the cost of care paid for by Medicare and Medicaid are at work raising the cost of care paid for by private insurers. What is it? and what dos it have to do with the public option?
Fred seems to be the only one close on this one. The incentives in the payment systems for the delivery of more or less efficient, higher or lower quality of care seem to me more important than who is doing the paying.
August 26, 2009 3:18 AM | Reply | Permalink
"The real issue is: Should we give Americans under the age of sixty-five the same choice we give Americans over sixty-five?"
Actually the real issue is should we give all Americans the kind of care they get at the Mayo Clinic or the kind they get at UCLA Medical Center?
Hint: Total Medicare spending per patient with chronic illness during the last two years of life (all deaths 2001-2005):
UCLA: $93,842
Mayo: $53,432
August 26, 2009 3:31 AM | Reply | Permalink
Hey; it costs mucho dólares to live in the City of Angels.
The next thing you'll be tellin' us is doctors shouldn't be shopping on Rodeo Drive?
August 26, 2009 9:38 AM | Reply | Permalink
Bite me.
A sort of random selection of hospitals in the LA region:
White Memorial Med. Ctr. 130,992
Alhambra Hospital Med. Ctr. 120,756
Cedars-Sinai Med. Ctr. 106,951
Brotman Med. Ctr. 102,909
St. Mary Med. Ctr. 98,315
City of Hope National Med. Ctr. 95,781
Encino-Tarzana Regional Med. Ctr 93,922
UCLA Med. Ctr. 93,842
San Gabriel Valley Med. Ctr. 93,367
Glendale Mem. Hosp. & Hlth Ctr. 91,060
Good Samaritan Hospital 88,575
Memorial Hospital of Gardena 86,986
Downey Regional Med. Ctr. 84,602
Long Beach Memorial Med. Ctr. 80,710
Santa Monica UCLA Med. Ctr. 76,808
Citrus Valley Med. Ctr.-IC Campus 75,378
Presbyterian Intercomm. Hosp. 68,820
Verdugo Hills Hospital 67,783
Providence-Little Company of Mary 67,311
National Average 52,838
August 26, 2009 2:22 PM | Reply | Permalink
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August 28, 2010 5:55 AM | Reply | Permalink
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September 27, 2010 12:28 PM | Reply | Permalink
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December 16, 2010 9:02 AM | Reply | Permalink
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he solution is regulation -- make companies stop discriminating against people who may need health care. But this creates a new problem -- if insurers charge everyone the same flat average premium, the pool of people who actually buy insurance will be disproprortionately weighted to those (older people, women, those who are already sick) with higher-than-average costs. Consequently, insurers would go out of business and nobody would have insurance.
December 17, 2010 1:14 AM | Reply | Permalink
it costs mucho dólares to live in the City of Angels.
The next thing you'll be tellin' us is doctors shouldn't be shopping on Rodeo Drive?bathing suits
December 20, 2010 4:17 PM | Reply | Permalink
they might be able to become very competitive. The critical need for either a public option or non-profit cooperatives would be to remain viable until some of the providers they chose to contract with restructured to the point that they could undersell those who remained outside.printed bags custom printed bags
December 23, 2010 8:41 PM | Reply | Permalink
Actually the real issue is should we give all Americans the kind of care they get at the Mayo Clinic or the kind they get at UCLA Medical Center?printing bags custom print hats
December 23, 2010 9:01 PM | Reply | Permalink
Nothing but Americans should think about it..
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February 18, 2011 4:46 PM | Reply | Permalink
such things are seems once in the blue moon
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February 21, 2011 2:42 PM | Reply | Permalink