(Untitled)

[silentclarity]

I wrote some good (at least I think so) posts on another forum about why I don't think a public option should be a mandatory feature of a healthcare reform bill.  I figured some people who read my journal might be interested in them, so here they are!

Post The First (in which Jeff sells out on the public option)

A lot of people are missing the forest

Comments

[pseudonoise]

Sorry, I meant the mandate itself was the problem without the public option -- IMO the two (mandate & public option) really need to go hand-in-hand for this to be anything but a give-away to private insurance. I don't see how we can mandate unaffordable insurance -- we have to find a way to make at least one of the options for insurance affordable. If the gov't gets stuck with the bill through subsidies, again this is a give-away because private insurance has no incentive to control costs, but we've given them a larger customer base.

The 3% profit is after compensation; I expect we'd be able to shave more than that by capping compensation to government limits.

I also thought Medicare (D specifically) was forbidden to use its bargaining power, at least for prescriptions. But how to bend that curve, no idea.

I think your main points are:
- get what we can get while the getting's good (agree)
- the PO can't be that great at controlling costs (doubt)
But even if I grant the second point, I guess my main question is still how is this going to keep costs down? Unless it comes back to the first -- we just have to get what we can and wait for a later iteration.

[silentclarity]

Medicare part D is forbidden to use its bargaining power on prescription drugs. That sucks, and is straight up a giveaway to pharmaceutical companies. Other than that though? Medicare pays less for medical goods & services than private insurers. It's a good deal less, but it's not enough. The cost growth curve still points at 100% US GDP for healthcare on a long enough time horizon.

You're basically right about my main points. Out of curiosity - how do you figure a public option with > 20mn enrolled will lower costs?

re keeping costs down: Frankly, we're not going to do that on this go around. Those costs represent a lot of people making money. Insurance companies are amongst them, but so are doctors (who make more of a profit than insurance companies), medical researchers (who make more of a profit than insurance companies), pharmaceutical companies (who make WAY more of a profit than insurance companies), and medical devices & equipment manufacturers (who make more of a profit than insurance companies). Right now there's just no political constituency for telling surgeons "Sorry, you're not going to be making a quarter million bucks a year any more."

So yeah, we're going to get what we can - which is a huge win. We're going to enshrine into law the principle that everyone in this country ought to have affordable access to healthcare. When we revisit the subject in another 8 or 10 or 15 years, that's going to be the starting point, and reformers will be able to go much further.

[pseudonoise]

I was figuring the lower overhead / non-profit aspect would keep the public option at least competitive with similarly-sized private insurance.

You're right about the principle of "health care as a right" being the victory here, unless the mandate becomes nothing more than an extra tax on the otherwise-uninsured. I worry about the backlash from that.

Maybe I'm reaching too far in also wanting the principle of "hey, sometimes government can be better than private industry in some things" getting a piece of the enshrining action.

[silentclarity]

One thing that I should mention - the mandate isn't happening alone. There's all sorts of regulation coming that will put an end to all manner of evil practices. Recission (the practice of canceling your policy when you get sick) is going to be illegal. Community rating is in (e.g. insurers cannot charge more if you have a preexisting condition). It's not just a straight up giveaway; it comes with lots of strings attached.

[pseudonoise]

For sure, but my prior experience with monopolies has shown that regulations translate into costs which are passed directly to consumers -- especially if the monopoly has an incentive to show how "hurtful" (to their bottom line) regulations / lawsuits are.

Example:
http://www3.signonsandiego.com/stories/2009/sep/02/sdgampe-seeks-ok-raise-its-rates/