Public Health Plan will Run Private Ins Out of Business?
I just loved President Obama's comment today when asked a question about the private insurers assertion that having a public health plan would run them out of business:
"Why would it drive private insurers out of business?" asked Obama. "If they tell you they're offering a good deal, why is it that government, which they say can't run anything, can drive them out of business? There are gonna be some legitimate debates to be had about how this takes shape. But conceptually, if they can't compete against a public plan as one option, with consumers making the decision on the best plan, that defies logic."
I'd like the reporters to now go and ask those private insurers and the GOP leaders that made the initial claim that private companies would be run out of business if a public health plan was provided -- where they get this so called fact?
While I continue to worry about Obama's promise that if you like your companies plan and your doctor, you can keep them. What if the company decides to change plans or go into a public health plan? He's not answering that question as of yet.
However, in his defense, your company could change plans tomorrow. They could suddenly say, "Hey, that Health Alliance is just too expensive for us, we're changing to PPO". So either way, you are still forced to 'change' plans and possibly doctors.
Is that what they call a single payer system? You pay your premium one place, and go to any hospital or doctor you please. No more HMO's.
If they can guarantee us that if there's a public option the private insurers will go out of business then I'll be happy as a clam and America will be healthier as a result.
June 24, 2009 1:54 AM | Reply | Permalink
Sad to say, it is Obama's rhetoric which defies logic. But it was pretty good theatre!
btw, don't get me wrong, I'm not a supporter of cartels and monopolies. But I'm not a supporter of government using its muscle to effect the same problems which private money can aim for.
June 24, 2009 4:08 AM | Reply | Permalink
If it weren't for market failure, there would be no need for government intervention.
Government has had to intervene numerous times since WWII, so obviously the "private market" is full of FAIL.
res ipsa loquitor
June 24, 2009 11:28 AM | Reply | Permalink
(eds - I'm not singling you out - you just happen to be the person who made the comments that I felt compelled to respond to. hope you're well.)
June 24, 2009 11:29 AM | Reply | Permalink
Well, what exactly is the market failure in this case? Sure, there are horror stories out there but if 90% of insured people are happy, "where's the beef?" applies. If one horror story (mild or extreme) out of 100 satisfied customers, then you could come up with a million horror stories and still have a 99% effective system.
I have not seen any good articles about cartels and monopolies in health care (care or insurance). Sure there are a few hints here and there about say Arkansas or some other isolated state.
There are fundamental reasons why health care is running about 16% and looking to go above 20% of GDP. The fact is that lots of people are looking for or accepting lots of expensive procedures. And if there are no big hidden cartels in the insurance area which suppress competition then competition among insurers should drive those costs down.
I'm not defending the status quo as being perfect. I'm asking for rationality.
June 24, 2009 3:14 PM | Reply | Permalink
Where is your proof that the cost of health care is from people getting expensive procedures? This data point you keep using seems suspect without verification.
There are many reasons the cost of health care has gone up, of which new treatments is one, but out-of-control administrative costs seem to be the data point most experts cite. It was one of the main price differentiators for health plans when I worked at Mercer. Of secondary importance is disease prevention programs which are non-existent. Third is the price of pharmaceuticals. Again, a huge point when most organizations price the cost of a plan.
I am not so sure why the health insurance and pharmaceutical companies get a pass in your estimation while consumers are all of a sudden the end all and be all of the problem. This seems an odd view of all the available data. I will agree that consumers play a part, but most people really aren't consuming medicine these days, only the sickest among us. That is sure to skew the numbers, yet never makes it into your analysis.
We are hardly a nation of hypochondriacs, despite any advertising to the contrary.
June 24, 2009 4:22 PM | Reply | Permalink
"Where is your proof that the cost of health care is from people getting expensive procedures?"
Oh, you're saying that health care is cheap? Okay.
You seem to confirm that there is competitive pressure with: "It was one of the main price differentiators for health plans" but your writing style might be obscuring some other intended point. If there is competitive pressure then the "overhead" argument doesn't hold water unless there are cartels. Your own "analysis" fails to be responsive to my prior comments.
"That is sure to skew the numbers, yet never makes it into your analysis."
Oh? If a person pays $5,000/yr and never exceeds the deductible, that person is expecting to eventually need a $300,000 procedure or some other compilation of expensive procedures adding up to that amount.
June 25, 2009 6:12 PM | Reply | Permalink
Doesn't take a conspiracy (or "cartel" if you will) to make insurance non-competitive.
All it takes is an entire industry dedicated to "stock holder" value at the expense of human life. All it takes is dozen of plans, each with different paper trails, to hide the inefficiencies in our system. All it takes is a population so scared of changing the status quo that their horrible coverage (always at risk of being lost or down-graded) will go away to make a public plan seem like a huge gamble.
Again, I am not sure what you are arguing for here since it seems you are giving the health insurance industry a huge pass for being bloated and ineffective, not to mention for killing hundreds of thousand of their clients by denying them the care they need.
Whatever.
June 25, 2009 6:21 PM | Reply | Permalink
Gad, you really do believe in the conspiracy theory!
"All it takes is an entire industry dedicated to "stock holder" value at the expense of human life. "
Not if they compete against each other, silly. Even if they are selfish pricks, the point is that competition among pricks forces prices down in the absence of cartels as long as consumer support competition.
My point at first was simply to note Obama's fallacy and the irony of him using a fallacy and then talking about logic. We seem to be off on some other illogical fantasy of yours here, now.
June 25, 2009 8:41 PM | Reply | Permalink
Except that it hasn't forced down prices, eds, and it doesn't take a conspiracy theory to explain it. You're acting as if we have not had double-digit increases in health insurance over the last twenty years, most with an attendant rise in out-of-pocket costs. We have three decades of voluminous data that shows "competition" simply isn't working in this industry.
Health insurance isn't the only sector that has seen fit to care more about Wall Street than Main Street. Many of our most basic needs have done through the roof - transportation, energy, food, housing. Everything is more expensive, despite a vast array of choices. The externalized costs of American business aren't even factored into the equation. The wage of those on the lower rungs have dropped while the goons at the other end have seen their pay sky rocket.
It doesn't take collusion (or a "conspiracy" if that is your preferred term, though it is an extremely loaded word meant to produce a very specific allusion) for something to have a detrimental effect on society.
June 26, 2009 8:05 AM | Reply | Permalink
I'm sorry you need to rant pointlessly.
Either there is competitive pressure or there isn't. If there isn't then there are cartels/collusion/conspiracy/whatever, OR, the demand is so high and growing so much that producers don't need to compete. That is, the society values the Good so highly that it has been grossly underpriced in the past and the market is seeking the correct equilibrium point.
You don't know that competition has not kept a lid on prices. Without competition, prices could currently be much higher than they are now. But if producer costs have been going up, then even with producr competition you will see prices rise as long as consumers value what is offered, regardless of whether consumers do due diligence or not.
What is your explanation for the large increases you're so on about?
June 27, 2009 7:06 PM | Reply | Permalink
This is a nonsensical comment, so I am not really sure how to reply, though it is clear you are unable to listen to any opinion that you don't already agree with.
Competition doesn't lower prices. Economies of scale lowers prices. Competition in an industry that is designed to fail all of us isn't competition at all. There is very little that health insurers do that is worth the price we pay for those services. Those are the facts and they are undisputed.
Did you have something worthwhile to add or is this the extent of your thinking on the matter?
June 27, 2009 10:17 PM | Reply | Permalink
Well...
--Competition doesn't lower prices.
Generic drugs. You lose.
--Economies of scale lowers prices.
That's why Microsoft software is practically free and flawless, and why Big Pharma is so good for us and offers low priced drugs.
--Competition in an industry that is designed to fail all of us isn't competition at all.
The only industry failing here is the information industry, but you're right that bullshit fails all of us when it's not restricted to vaudeville. Or are you saying that FDR set out to fail all of us with Social Security and his followers with Medicare and the like? How ironic.
--There is very little that health insurers do that is worth the price we pay for those services.
Then don't pay for those services. Simple. Or admit that what they DO offer (risk management and arbitrage) is actually worth a lot to you.
--Those are the facts and they are undisputed.
I see there is a gap in our mutual vocabularies, or that you're just bullshitting.
Can we get an honest post around here please?
June 27, 2009 11:41 PM | Reply | Permalink
I said competition in health insurance doesn't lower prices. That has been proved. The rest of your comment is simply smoke and mirrors meant to complicate a very simple issue. Just because some is the only game in town doesn't make it a worthwhile service. Health insurance is a scam. Pure and simple. It has been proven that they use deception and collusion to deny benefits and kill people.
You have yet to offer actual proof for any of your assertions just vague and meaningless non sequiters that have nothing to do with the topic at hand.
The simple fact of the matter is that costs have gone up by double-digits each year for the last two decades. Most of the that cost has been for insurance and not health care. Health insurance, without proper regulation, is more than simply worthless. It is actually damaging to society. The proof of that is undisputed and backed by years of data. You act as though the jury is still out.
What next? Are you going to argue the benefits of a trillion dollar defense budget?
June 28, 2009 8:41 AM | Reply | Permalink
You might try adding to the topic instead of talking about yourself so much:
"The rest of your comment is simply smoke and mirrors meant to complicate a very simple issue."
"You have yet to offer actual proof for any of your assertions just vague and meaningless non sequiters that have nothing to do with the topic at hand. "
June 28, 2009 1:36 PM | Reply | Permalink
You might respond to the query that prefaced those comments instead of saying my opinion isn't warranted. You quote the part you took umbrage to - mild criticism at best - while dismissing the actual meat of the critique. Very odd way to debate that does nothing to really move the conversation forward.
June 28, 2009 1:50 PM | Reply | Permalink
The topical ball has long since been lost in your mudslinging, that post was to offer you a mirror so you might care to clean up your act.
June 29, 2009 4:38 AM | Reply | Permalink
Mudslinging? Pretty thin skin for someone who considers himself a writer, You might want to work on the ability to take constructive criticism, unless you come here to not listen to anything but the flapping of your own gums.
June 29, 2009 6:17 AM | Reply | Permalink
http://tpmcafe.talkingpointsmemo.com/talk/blogs/coonsey/2009/06/public-health-plan-will-run-pr.php#comment-3511398
June 29, 2009 4:56 PM | Reply | Permalink
Starting to sound like, OGD, by quoting yourself. Simply quoting erroneous information doesn't make you right.
June 30, 2009 6:10 AM | Reply | Permalink
So ... logically speaking . . .
Your rhetoric appears to be that the entire Medicare, Medicaid, SCHIP, VA and the military health bureaucracies should be dumped from federal government oversight and be entirely run by private corporations and industry. Is that fair for me to say?
~OGD~
June 24, 2009 1:40 PM | Reply | Permalink
"I'm not a supporter of government using its muscle to effect the same problems which private money can aim for."
That does not seem to me to say what you turned out! I believe in a balance between uniformity and diversity. I believe in some kinds of social engineering but not in others. My libertarian side says people should be responsible in their conduct and not have big expectations of getting bailed out, that is the entitlement mentality strikes me as perverse and dangerous. In general I think the devil is in the details, a nice idea can go to hell when implemented esp. if it's sold on false premises. And a difficult idea can turn out to be an effective solution, too.
Also see my other reply just above.
June 24, 2009 3:19 PM | Reply | Permalink
Uh . . .
Where the hell do you think the Medicare, Medicaid, SCHIP, VA and the military health bureaucracies started? In a vacuum?
Your "libertarian side," or those with those leanings to capitalistic free market reign couldn't make a pimple on the butt of a flea when handling and overseeing the current day complexity of an issue such as the current ill state of the health insurance coverage situation or the services needed to be effective both in cost and application for a nation of 300+ million. The proof? Look at the hole we are currently in. That's proof positive enough for me.
If the for-profit publicly traded insurance corporate weasels don't like competition they can always go home and play solitaire.
~OGD~
June 24, 2009 8:33 PM | Reply | Permalink
In addition . . .
Here are some basic details that no doubt will contain many little devils in them ... but it beats the hell out of standing around watching the system go further into the toilet.
~OGD~
June 24, 2009 8:58 PM | Reply | Permalink
Thanks for the tasteless spam.
Oh and as for your previous inane and rude comment, libertarians did not run the Bush or Clinton Congresses or WHes.
June 25, 2009 6:02 PM | Reply | Permalink
I don't know about you but my workplace over the past 20 years has changed insurance companies twice, so even with PRIVATE insurance - you could STILL lose the plan and doctor you LIKE.
June 24, 2009 8:55 AM | Reply | Permalink
An obvious point coonsey that somehow seems to escape the mainstream media who continue lending credence to this manufactured boogeyman of a complaint against public health care plans.
June 28, 2009 2:29 AM | Reply | Permalink
Mine has changed 3 times in 4 years. (The best plan - cheaper and better coverage - was the first one)
June 24, 2009 9:43 AM | Reply | Permalink
So I guess my question about my workplace changing policies if they want is mute.
June 24, 2009 11:44 AM | Reply | Permalink
Happens regularly.
Oh, and it's "moot"...
June 24, 2009 1:17 PM | Reply | Permalink
If the government offers a public plan, and the private insurers take their ball and go home, I can think of a million young entrepreneurs who inherently put a value on social responsibility and would be willing to start new private insurance companies that
compete fairly in an industry that would no longer be a monopoly.
June 24, 2009 1:15 PM | Reply | Permalink
I agree. The reason they don't compete is because they don't have to. They are allowed to pursue strategies that literally kill people and no one in government says a word.
This has been going on for at least the last four decades, but has gotten exponentially worse in the last ten years or so. Any new-found surprise on the part of anyone Congress is disingenuous at best, especially given the number of incumbents who have been screwing this pooch since the beginning.
This country frustrates the hell out of me some times.
June 24, 2009 4:30 PM | Reply | Permalink