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A must-read: Perlstein on the Public Option
From WaPo
I like Perlstein and always learn something. He pushes the administration's now established line: "it's just not that important".
I at this point still believe the Option-less bill is worse than nothing. Granted, the Option is just a sliver of the overall package, but it provides a guarantee that the insurance exchange(s) are truly competitive, and, if provided with a strong enough negotiating position, seriously pushes down costs on health services. In its absence, the bill looks like a trillion-dollar corporate subsidy. (Seriously, when do we stop racing down this corporatist road to serfdom, and start to consider a new direction?)
Perlstein's arguments seem weak to me. He argues that extremely tight regulation of the insurance exchanges could ensure they are truly competitive, and that other measures - such as tough anti-trust regulation and changes to service-provider incentives - could be just as efficient as a strong public option in reducing health care costs.
The glaring hole in this argument is that
Okay, that last statement is just bald assertion. I do not know for a fact that these things are not in the bill. But such strong measures, that don't take the easy way of increasing coverage by handing the corporates their ransom, that are equivalent in effect to a public option, are hardly to be expected from the same people that cave so easily in the face of opposition on the Option. Just color me skeptical.
As for the idea that we can give the industry a trillion dollars, leaving out all measures that hurt their bottom line, and then come back with a new bill with nothing in it for them but heartburn - be it the Public Option, regulatory measures, changes in fee-structure - I call such proposals politically naive.
I like Perlstein and always learn something. He pushes the administration's now established line: "it's just not that important".
I at this point still believe the Option-less bill is worse than nothing. Granted, the Option is just a sliver of the overall package, but it provides a guarantee that the insurance exchange(s) are truly competitive, and, if provided with a strong enough negotiating position, seriously pushes down costs on health services. In its absence, the bill looks like a trillion-dollar corporate subsidy. (Seriously, when do we stop racing down this corporatist road to serfdom, and start to consider a new direction?)
Perlstein's arguments seem weak to me. He argues that extremely tight regulation of the insurance exchanges could ensure they are truly competitive, and that other measures - such as tough anti-trust regulation and changes to service-provider incentives - could be just as efficient as a strong public option in reducing health care costs.
The glaring hole in this argument is that
these things are not in the bill.So there could be a great Option-less bill, but it just happens not to exist.
Okay, that last statement is just bald assertion. I do not know for a fact that these things are not in the bill. But such strong measures, that don't take the easy way of increasing coverage by handing the corporates their ransom, that are equivalent in effect to a public option, are hardly to be expected from the same people that cave so easily in the face of opposition on the Option. Just color me skeptical.
As for the idea that we can give the industry a trillion dollars, leaving out all measures that hurt their bottom line, and then come back with a new bill with nothing in it for them but heartburn - be it the Public Option, regulatory measures, changes in fee-structure - I call such proposals politically naive.
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Well, obey, then color me cynical. Even if there were some anti-trust and other regulations, often the bills seem to be written in ways that corporations can wend their ways around the supposed rules; oh--they are called loopholes after-the-fact, or donut holes (as though no one noticed the holes to begin with. Look at tax policy: if the upper bracket is supposed to pay 35%, why aren't they? Loopholews, shell corporations, off-shore mailboxes for corporations, on and on. A recent study said most big corps pay ZERO taxes. Fah! The big new jobs to stimulate the economy will come from the hundred thousand lawyers to figure out ways to STILL not provide fair health care.
Massachusetts has mandated care, and there are such divergent opinions about how well it's working, it seems altogether to depend who is asked.
I can't even begin to see how we can be legally mandated to buy private insurance, and I sure can't think it will help our national economic recovery. Oops-it will help our GDP; already has, since insurance stocks went waaaaay up on the Drudge Report's obituary for the Public Option. I can't even check the DOW today...
August 19, 2009 1:12 PM | Reply | Permalink
Well, Wendy, I'll take that as agreement...? There are so many things wrong with the outlines of the bill that I didn't bother to get into here. I barfed it all up on poor Stilli's blog yesterday.
This Perlstein piece is imo just part of the WH's full court press in the media junking the public option. And there is a certain dissonance in the messaging. If it is so not important - if it makes no difference - then why are so many 'moderates' - i.e. those most defensive of corporate interests, so intensely opposed. If there are equally effective competitive and cost-controlling measures in the bill that neuter the impact of a public option, then why do they care so? And if it is insignificant, why do insurers' share price move WILDLY every time prospects improve or worsen for the public option? All these signs tell me no such measures exist.
The public option is pretty much the only measure in there that the insurers don't like. They couldn't care less about ceasing abusive practices as long as they have complete pricing power - i.e. they'll just raise premiums to whatever is required to maintain the same profit margin, and by the same token thereby price even more people out of the market, in turn requiring more subsidies. Just another subsidy sucking Vampire Squid ...
August 19, 2009 1:33 PM | Reply | Permalink
Yes, obey, i was agreeing and throwing another stick on the fire. It all makes my stomach hurt.
When I heard chuck grassley announce that he was involved in a compromise, but he most likely wouldn't be able to sell it many of his buddies, so he wouldn't vote for it, anyway, i swear. It makes my knees weak.
August 20, 2009 8:15 AM | Reply | Permalink
We are legally madated to buy auto insurance and house insurance (if we have a loan). Those have both been big winners for insurance companies. Why not mandate health insurance? Surely another winner for insurance companies. Which is why universal care should be the ultimate goal - IMO.
August 20, 2009 12:06 AM | Reply | Permalink
True, Rowan. But a couple of thoughts
1. Are those mandates accompanied by trillions in industry subsidies?
2. How concentrated are those insurance markets? Are there the same regional monopolies as in health insurance?
3. How concentrated are the underlying service-provider industries (car repairs, house repairs)?
I understand the goal is universal health care. But the idea of getting there largely through subsidies to regional private monopolies with broad pricing power is a recipe for disaster, as their lobbying power gets more and more entrenched. As I've said elsewhere, look where that got us with the banking industry...
In the absence of a public option, I'd much rather dump the subsidy-based strategy of the present bill and move towards something more like Dean's '04 proposal expanding government programs. The choice is not 'subsidy or nothing'.
August 20, 2009 7:31 AM | Reply | Permalink
That may well be true, but the legally-mandated car insurance and homeowners insurance are both for OPTIONAL practices (i.e., driving a car or buying a home). Although, evidently Repuglicans consider living to be an optional activity.
And, I'm not sure that if you purchased a house with cash and didn't have a mortgage that you'd be required to purchase homeowners insurance. (IIRC, the reasons for the HO ins is to protect the bank's interest in your house, since they hold the note on it.)
August 20, 2009 9:17 AM | Reply | Permalink
I'll raise you on the "must read," at least as far as the same topic is concerned, with
(For those who don't know her from her contributions to TPMCafe in 2008, Mahar is author of Money-Driven Medicine: The Real Reason Health Care Costs So Much
(Harper/Collins 2006), a fellow at The Century Foundation, a former financial journalist at the New York Times, Barron's, Bloomberg and....)
August 19, 2009 1:35 PM | Reply | Permalink
Thanks AA. Glad to see Maggie Mahar agreeing with me. Does that make her a purity-trolling ideologue too...?
"Could we have affordable, high quality health care for all without a public insurance option? Perhaps, if insurers were tightly and fairly regulated. But the chances of that happening are slim, particularly if Max Baucus and other conservative Democrats play a major role in writing this bill."
August 19, 2009 1:47 PM | Reply | Permalink
Actually, ironic that you say that; I have this suspicion that while she is extremely patient person who likes to interact with most kinds of people, she quit posting here because she has low tolerance for purity-trolling ideologues. :-)
August 19, 2009 2:57 PM | Reply | Permalink
Does she agree with you? really, really agree with you? In the selection you quote she's in your corner. But how about here?
And elsewhere she claims to understand Obama's atrategy and approve of it.
Boy do I miss Maggie Maher around here.
Artappraiser gave the link for Maher, so there's no need for me to give it again. I'll use my link to give you what she gave in the body of her article, the link to Obama's text in toto. I'd like to see one of his critics take that text apart masterfully and fairly--in a blog and not in a comment. Extensively--line by line if necessary. So how about it, Obey? I trust you to do it fairly, and I mean that.
Here's that link. http://www.whitehouse.gov/the_press_office/Remarks-By-The-President-In-Town-Hall-On-Health-Care-Grand-Junction-Colorado/
August 19, 2009 3:32 PM | Reply | Permalink
Just caught this - and you got me reading the whole text, Amike. Gotta say, it is a very comforting feeling to see a president so comfortable with the details and so confident in arguing for them. Really worth reading!
That said, I'm not sure what you're asking of me (or any other critic). He defends the Option and the rest admirably. So no objection there. It's got more to do with Sebelius' wording of her 'support' and the mass of media noise - also from the progressive pro-administration side - trashing, or perhaps belittling, the Option. It's the only element the industry is worried about, that cuts significantly into their profit-margins. Is it a HUGE positive to the bill? No. But it is the ONLY thing that moves the industry somewhat in the direction of price-efficiency and slows the rampant slide to Capitalisme Sauvage, where 50 cents on every dollar of health care spending goes to corporate profit. Without it we're being asked to pay a trillion for 500 billion in value in terms of health care services. It's just nuts.
The bill offers huge subsidies to the industry along with 50 billion new clients forced to buy their product, and in exchange asks for a minor narrowing of their profit margins. And that ONE bit is getting thrown out. Amike, we just can't keep moving in this direction. We did it with the banking sector - 24 trillion in guarantees worth 2+ trillion in cash value - and are looking at no serious change in the regulatory environment. The more we feed the corporate beast the hungrier it gets. Each time we demand it provide some public good, be it allocation of savings, reduction of polution, health care, it demands a bigger and bigger ransom. I am happy to provide them with the profits that come from providing those public goods efficiently, but each time the ransom gets bigger, the regulations that ensure some measure of efficiency are thrown out, and as a result the lowly tax-payer gets fleeced.
ONE SMALL CONCESSION. That is all I want to see the government eak out of the corporate sector in this bill. ONE. And yet, here we have an outright administration campaign to say that the one concession in the bill, hey, it makes no difference: "150 billion dollars more or less, who really cares, they're giving us universal coverage (or so we think...)".
August 19, 2009 4:13 PM | Reply | Permalink
This comment is worth bookmarking. Good blog too, pug.
August 20, 2009 12:20 AM | Reply | Permalink
Thanks Miguel.
August 20, 2009 12:50 PM | Reply | Permalink
That's exactly what I want you to do..but in a post where it will hang around for awhile. One doesn't need 1,000 words on a 700 word extract...but I often ask my kids to take something like this, use it as a "prompt" and put their brains to work on it. I'm quite surprised at how good the results are from the best of them--the implications they can tweeze out, that sort of thing. And when I get two or more of the really goodies working with each other by probing each other's thinking then real learning takes place.
Sorry to go all professory on you. I just think there's a chance for something pretty interesting to happen if you take this on.
August 20, 2009 7:36 AM | Reply | Permalink
Thanks for your comments and the suggestion Amike. I'll think about it. But posts don't hang around longer. I checked out how long this blog lasted: three hours.
Granted, it's not great - just a sober small-bore nano-argument. But more broadly, the degree of work and seriousness that goes into my posts is inversely proportional to their life-span. It seems that longer comments on more successful threads have a better chance of being read and getting feedback.
Maybe if I did a post called Hot sexy Space Monkey Deviant Public Option Porn, well, that might work... but that's kind of the problem, isn't it?
August 20, 2009 8:21 AM | Reply | Permalink
Now if you could work the word "Fascist" into the title it would be perfect--maybe move Hot a little into the body of the title so people won't envision perspiration dripping off the fascist pervert like sweat.
That stupid little window indeed is the problem. The bigwigs stay around forever, whether anyone reads them or not, whether they say anything new or not. I'm not convinced that the management is holding staff meetings to remedy this situation.
August 20, 2009 9:17 AM | Reply | Permalink
Get the word fascist into the title someplace, doesn't matter where, and you'll have a winner for sure. :-) Why did I put a smiley there? I should have put a frowny. :-(
August 20, 2009 10:40 AM | Reply | Permalink
Ransom. Yes, how clear. Taxpayers paid a ransom to keep the banks "viable."
August 20, 2009 8:22 AM | Reply | Permalink
Playing Poker? If Obama's playing poker he's been doing it in the back room at baucus's place where he's been wheeling and dealing and big insurers are naming the game.
August 19, 2009 4:54 PM | Reply | Permalink
Either the money will be in his pocket by the time the game's over, or he'll flash his badge at them about the time the sun rises and arrest them all for illegal gambling.
August 20, 2009 12:15 PM | Reply | Permalink
Dream on, Amike while you can. I'm afraid I am completely disillusioned and cannot abide hearing the fawning over obama still going on, which sounds almost as irrational to me as the wingers believing their lies. I don't think Obama is lying. I just think he's not telling the whole truth.
I may rejoin the ranks of the besotted if they pass a decent health bill, but I'm betting against it at this point.
August 20, 2009 1:22 PM | Reply | Permalink
This post is about to disappear after its three-hour window (?!). Thanks for the comments.
Signing off.
August 19, 2009 3:32 PM | Reply | Permalink
its not over till its over. No its not dead. We just did not sell it properly. I missed the damn thing. Could not sell it in chat...
We got to get you up to ten.....
My damn dashboard does not always work right and I have not been checking the recent blogs.
I will do better next time.
Now you could cut and paste and add a sentence with a new title.
You are the third this week. Its not dead, it is just hidden because of too few recs.
August 19, 2009 11:51 PM | Reply | Permalink
Oh, I shouldn't be complaining Dick. Much better blogs are getting thrown out with this system. But three hours?! I never realized until I checked this one just now. My thing here was more a continuation of an ongoing discussion, so no big deal. But some people are putting long hours of work into their posts and get bupkis. I don't know what to do about it.
Though, I must say you do a great job of picking up and commenting on some of the lost blogs which I only see because they then end up on my dashboard. So thanks for that...
August 20, 2009 7:45 AM | Reply | Permalink
See. Your back. Just like that. Four hours still to go and you are not only recommended but not that far from the top. You would be higher if I had caught it, but I don't have to feel guilty about it. ha!!!
August 20, 2009 9:45 AM | Reply | Permalink
I agree Obey, mi amigo pugalito!
I am dealing with an insurance company right now, not health, but auto, and damn if they aren't adopting some of the health insurance industries more disgusting tactics, namely, recision.
If they can't see obvious damage, and you admit that your car had damage in the past, they'll refuse paying for it, even if it was working fine before the accident. In this case it's the drivers side door. The mechanic can't close it. Of course, when it was towed to him the door was closed, but hey, guess who's paying to fix it? Not my insurance company.
I do believe that if we don't stop this now, that all types of insurance will go whole hog and adopt these disgusting practices, and we'll all go merrily to the poor house.
What is the point in insurance then? It's just give me your money and spin the wheel. MAYBE we'll pay... maybe not. That ain't insurance. That's graft. It used to be illegal.
The idiots protesting don't have the slightest clue that they are one illness, auto accident, or job loss away from disaster. Perhaps that needs to be driven home much more forcefully.
None of us like being suckers.
August 20, 2009 12:04 AM | Reply | Permalink
What drives me nuts, Bwak, is that all these 'regulatory reforms' count for shit. Take the banks: so much of the rampant financial fraud is already illegal, the Fed is already responsible for systemic risk, the FDIC is already responsible for auditing. But they are totally captured by their industries. They enforce when and how the industry wants them to. Take the recent 4 billion dollar accounting fraud at BofA. The SEC went in and fined the current shareholders - i.e. the tax-payer - for management lying to their buyer - i.e. the tax-payer - about their financial position. WTF?!?! It's Alice-in-Wonderland crazy.
Making a show of tightening the rules while the existing ones are not applied or enforced is not even a joke. It's an insult. The dirty not-so-secret is that most of these insurance abuses are already illegal in many (most?) states. But what are you going to do? Fight a 5 year legal battle in courts against corporate lawyers? Against more and more conservative judges? Creating an alternative institution that is actually accountable to its clients - i.e. a public option - is the only way to incentivize the corporate sector to actually follow the rules.
August 20, 2009 8:46 AM | Reply | Permalink
The only reason to worry about being "competitive" with a for profit system is to save the for profit system. The basic question is whether health care is a right or a commodity. The concern about competitiveness comes from the position that health care is a commodity - at least that's the way I read it.
Some at the "town halls" keep yelling about raising taxes. Well, personally I would support raising taxes if it replaced the premiums and out-of-pocket expenses. In fact, most folks would likely net more pay with coverage through taxes than coverage out of pocket.
August 20, 2009 12:12 AM | Reply | Permalink
Not sure which of my points, if any, this addresses. The aim of creating more competition is ultimately efficiency of delivery of health care services - reducing waste in terms of excess waste and excess profits. Whether a vibrant private for-profit market is the way to go is a hypothesis that has not been tested, and can only be tested if people are given the option of something else - i.e. a public option.
August 20, 2009 8:57 AM | Reply | Permalink
Yes, Rowan, plenty of americans have said they would pay higher taxes fro universal care. But the pundits keep asserting that the President simply can't break his "no new taxes for folks earning under a quarter of a million dollars."
Did you see this hoe church bishops rant on "THE health care bill at the national press club?
http://www.huffingtonpost.com/2009/08/19/conservative-black-bishop_n_263531.html
(Some christian bishops are more worth than others...)
August 20, 2009 8:29 AM | Reply | Permalink
Pearlstein says: "You also hear the argument that government-run insurance would have lower costs because it wouldn't have to generate a profit (that's true) and would be more efficient than private insurers (that isn't). The evidence of greater efficiency is Medicare, which spends about 2 to 3 percent of its budget on administration. But if a government-run plan had to spend its own money to collect premiums, market itself to customers, maintain a reserve, and manage care in a way that lowers costs and raises quality -- none of which Medicare now does -- then you can be sure its administrative costs would be nowhere near 2 or 3 percent."
All the more reason for a government-run, single-payer plan. It would be more cost-effective if we followed the Medicare plan, with some leeway, as Pearlstein suggests, to reflect reasonable physician and hospital awards.
You can't argue with the Medicare admin. costs. And you can't argue with the success of Medicare. For every horror story, there are thousands of stories about lives being enriched or saved because of the Medicare safeguard.
Why should the government ever have to "spend its own money to collect premiums [and] market itself to customers"? There is a much easier way. It's called universal government-controlled health care. It's done in every industrialized country in the world and, while it may not be problem-free, the unquestionable conclusion is that it works.
August 20, 2009 9:42 AM | Reply | Permalink
"And you can't argue with the success of Medicare. For every horror story, there are thousands of stories about lives being enriched or saved because of the Medicare safeguard."
One of the many interesting parts is that many of those who are screaming about not wanting the government involved in their health care are either on Medicare or have parents who are, and have ANY of them said they want it ended??? Not that I've heard...
August 20, 2009 10:09 AM | Reply | Permalink
Thanks for stopping by Stilli. Regarding the screamers, (1) they're deeply misinformed by the media, and (2) they don't trust any reform of health care because from their point of view, expansion of coverage can only make their own care worse. Medicare recipients have a strong preference for the status-quo combined with uncertainty ginned up by the press. Annoying, but understandable...
August 20, 2009 11:02 AM | Reply | Permalink
Wasn't it GWB who didn't know Medicare was a government program? Or was that SS?
If those crazy seniors are going to protest against any governmental interference with health care, they ought to have to pin their Medicare cards to their chests.
(I'm looking at mine right now. There is an eagle-emblazoned Dept of Health and Human Services insignia right on it. Granted, it's tiny and a little hard to read, but I didn't need to see it in order to know it came from the govmint.)
August 20, 2009 2:50 PM | Reply | Permalink
Thanks Ramona. What you said, AND the fact that the cost-curve on Medicare is also much shallower than private insurance-based health care.
August 20, 2009 10:47 AM | Reply | Permalink
Excellent blog, Obey. Generated lots of good thinking.
I wish we could get a bill out of DC that wasn't written by private corporations and the elected representatives nestled deeply in their pockets.
I'm really curious about why President Obama hasn't come out even more passionately for the pubic option--to say it's only a sliver insults my sensibilities. I can only imagine the threats he gets on a daily basis, beyond mindless gun-toters at town halls.
Greed is an ugly motivator that can exact lethal consequences.
August 20, 2009 9:50 AM | Reply | Permalink
"Pubic option" - henhenhenhen... sorry, just my inner Beavis.
I don't really get the various theories of why they are down-playing the public option. They're saying it's not important because they don't think it's important. I'm getting sick of the Obama-playing-four-dimensional-space-chess meme...
I just hope the 'sit down and trust Obama' brigade don't win out here.
August 20, 2009 10:55 AM | Reply | Permalink
this is really an interesting phenomenon--this irrational explanation that someone we hold in such high regard, perhaps more in potentia, must be operating on a super intellectual level, one we can't possibly comprehend and that by the time he finishes playing Jedi mind tricks on the evil nemesis, they'll be spitting dust. And we mere mortals will see how he had them right where he wanted them all along, how silly and unfair it was to doubt him.
This is dangerous stuff, rationalizing beyond the point of sanity.
August 20, 2009 11:15 AM | Reply | Permalink
I've give up trying to figure out what's in the sausage or when all is said and done, how it's going to be sewn up.
If Maggie's for it, I'm for it; if she's against it, I'm against it.
August 20, 2009 10:15 AM | Reply | Permalink
Thanks for the links Ellen. AA gave the Mahar link above. Interesting contrast on the President's emphasis re the Public Option between now and a few weeks ago. Then it was one of four key criteria for success, now it's an inessential sliver. Am I paranoid? Maybe... but it can't hurt.
August 20, 2009 10:40 AM | Reply | Permalink
If you liked the financial industry bailout - brought to you by Wall Street Execs - you are REALLY going to like the health insurance industry regulation effort written by the health care industry lobbyists.
Remember "toxic assets?" Remember foreclosures being the problem that will frustrate any economic recovery? Well, since Paulson, Geithner, and the other Wall Street Execs. handed out hundreds of billions in bailout funds, how many toxic assets have been purged? What help has there been given homeowners in avoiding foreclosures?
Wall Street is doing famously. Main Street? Not so much! Gee, how did THAT happen?
In the "Insurance Industry Profit Enhancement Reform" effort, we have already seen the degree that Washington is owned by the corporate lobbyists and the way in which the public is so easily swayed by less-than-honest but highly financed public relations campaigns. It sure doesn't take much to understand just how ludicrous it is to think we can ever get a handle on regulating the Health Insurance Industry when we can't get them out of the way just enough to actually pass any significant and genuine health care reform.
And to the asshats proposing that this is the solution, I would have to ask since when they developed so much trust in "guvmint" to think they are capable of holding the reigns on the Insurance Industry. After all, these are the same jackasses that insist government can't run health care - or even a portion of it. There is a disconnect in their argument here that is related more to whose water they are carrying rather than an honest consideration of the issue.
August 20, 2009 11:22 AM | Reply | Permalink
You say it better than I could. Thanks Sleepin.
The government run health care scare. I just don't get how it gets any currency. The US has one of the biggest government-run insurance programs in the world with Medicare, one of the biggest govt-run service programs with the VA. Both better than their private-sector counterparts in terms of cost-efficiency. Why not open up both of those to outside clients at cost+ rates on premiums and services? Frees up money for better care for current recipients and saves patients money, opens up more choice and competition. But Conventional Wisdom says this is CRAZY TALK. Very very strange...
August 20, 2009 1:02 PM | Reply | Permalink
crazy talk among those scraping the bottom rung of reason, and those who would endeavor to keep them there.
August 20, 2009 3:44 PM | Reply | Permalink
Well put. as always, Gary...
Got a new blog up in case you're interested:
http://tpmcafe.talkingpointsmemo.com/talk/blogs/obey/2009/08/the-public-option-as-it-appear.php
August 20, 2009 3:51 PM | Reply | Permalink