A Picture of Healthcare Reform
August 19, 2009
This is it, folks. It’s not that hard to understand. The public option is a minor element, and will affect very few. It’s whole point is to contain costs, both directly and indirectly through competition with private insurers.
(Hat tip: Paul Krugman).
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Two thoughts, first with current insurance if you don’t like a decision by the insurance company you can appeal. If they deny it you can get an independent review. If it is employer sponsored you can often get your employer to intercede on your behalf. If you are not satisfied, you can then take it to the Courts. Then there’s the single payer system, or public option when the Federal Government denies your coverage who are you going to appeal the decision with?
Second thought, what if health care cost is an unsolvable problem? What if we got the waste out of the system, reduced incomes of health plan CEOs and doctors, provider and plan profits — and we somehow kept them in the business of providing health care — but trend continued rise at 2 to 3 times general inflation because new treatments, procedures and medical advances kept on coming, people lived longer and research to find various cures required larger and larger sums of money…we would be in the same state we are now.
Maybe, just maybe, market supply and demand is at work here. We have an inelastic demand for health care and and a scarcity of resource so that the cost rises faster than other products and services.
No amount of health insurance, health care or just health reform is going to solve the cost problem.
Follow the debate and other healthcare delivery issues at http://www.ilovebenefits.wordpress.com
Thanks for this… it reminds me of the time I had to put a picture of myself on the outside of my office so that students would know, “O… this is where my prof’s office is…”
David
That’s hilarious, David.
If the public option is only a minor element in the Democrat’s plan, why are so many on the left saying that they’d oppose any plan that doesn’t include it? (That’s not rhetorical, I really don’t get it).
Frankly the idea that the government needs to provide competition in health care by setting up its own insurance company is kind of silly. I guess instead of bringing that anti-trust suit against Microsoft the government should have just started its own computer company.
Blackadder, I don’t know why you willingly obfuscate, when you are clearly aware of the market failures in healthcare. You are well aware that single payer systems are dramatically more efficient than their private alternatives (cheaper to provide same or better quality care). American free market ideologues simply cannot get their head around the idea that the government sometimes has a legimate role in the economy.
As for the proposed public option, it has always been strictly limited. I’m wondering how many poeple realize quite how limited. As I’ve said before, we can get to the end point with a purely private system, by regulating the insurance companies. That’s how Switzerland and the Netherlands do it. But a key issue in the US is not just coverage, but cost, and the public option was always about containing costs. Of course, coverage is most important, but I find it highly ironic that the opponents of reform are attacking those very items that are geared to tackle costs.
Another issue is that, even with regulation, the lobbying power of the insurance companies without a public option to keep them honest could see all the gains lost over the next few years — especially if the GOP comes back to power.
MM,
Repeat after me: a public option is not single payer.
The argument in favor of single payer is that health insurance is subject to an adverse selection problem. In the typical telling, insurance companies “cherry pick” by only insuring low risk people, leaving those with higher risks to die on the streets, or something (this isn’t really adverse selection, but whatever).
Let’s say that this argument is right. In that case, any public option is doomed to fail. In order to compete against private insurers it will have to engage in the same sorts of cherry picking practices that private insurers do. For if it doesn’t do so it will end up insuring only the high risk people and will quickly go bankrupt. So if you think the above argument for single payer convincing you should be opposed to having a public option.
That is ONE argument for single payer, and not even the main one — we can easily avoid this problem by heavily regulating the behavior of insurance companies (including by mandating community rating alongside the universal mandate). This is pretty much what Switzerland and the Netherlands do. The bigger argument for single payer is that it will keep costs down, especially through exploiting economies of scale and using its bargaining power to get a good deal from healthcare providers and drug companies.
Of course, the proposed public option cannot do this, because it is far too small (and this is why I not only support a public option, but support the ability of anybody joining at any time). But it is a small step in the right direction, especially as recent studies have shown the prevalence of regional monopolies eitehr by insurance companies or healthcare conglomerates.
And your “adverse selection” arguments makes no sense as all inusrance companies would be expressly prohibited from this kind of “weeding out” behavior.
Two thoughts, first with current insurance if you don’t like a decision by the insurance company you can appeal. If they deny it you can get an independent review. If it is employer sponsored you can often get your employer to intercede on your behalf. If you are not satisfied, you can then take it to the Courts. Then there’s the single payer system, or public option when the Federal Government denies your coverage who are you going to appeal the decision with?
I’ve seen this argument floating around and I must say, I find it incredibly naive. All I can say is — good luck! If you take on the insurance companies, you are like a little fish swimming with sharks. These guys are incredibly sophisticated. They know what they are doing. Actually, one of the main bvenefits of the proposed reform will make a little dent in their armour, and level the playing field a bit.
That is ONE argument for single payer, and not even the main one
It’s an argument you’ve made repeatedly. Are you saying you don’t believe it?
The bigger argument for single payer is that it will keep costs down, especially through exploiting economies of scale and using its bargaining power to get a good deal from healthcare providers and drug companies.
That is an argument for single payer, but in my view not a very persuasive one. As you note, the Netherlands doesn’t have single payer, yet per capita spending on health care in the Netherlands is almost exactly what it is in single payer Canada (it’s actually a bit lower in the Netherlands). Since the U.S. spends a lot more than Canada and we’re right next to each other it is tempting to assume that if we adopted single payer we’d have Canada levels of spending. Comparing Canada’s spending to non-single payer systems in Europe, however, suggests that the difference is due to other factors (the fact that the U.S. government already spends more per capita on health care than Canada suggests that there is something else going on).
Actually, with two recent experiences — a friend had a problem with Medicare. One call and one follow up to her Congressman’s office and matter resolved favorably. With a private insurance company — scores of calls made; 20+ minute waits; directory of “press one for this recording…” dropped calls; calls not returned; wrong information given; demand that documents be mailed; documents lost by insurance company. It still has not ended.
Even in my last fight with insurance, they decided to accomodate me, but refused to fix the problem systemicly.
Sam Stein reports this interesting Gallup finding:
“The states that have been most skeptical of President Barack Obama’s agenda for health care reform also have some of the highest levels of uninsured people in the nation.
A new study by Gallup shows that large swaths of populations in the South and West — anywhere from one-in-five to one-in-four individuals — are currently lacking health insurance coverage.
These same regions also have the largest percentage of populations who believe widely perpetuated mistruths about the Obama agenda, including allegations that the president will set up “death panels” and wants a complete government takeover of the health care system.
According to Gallup, of the 25 states with the greatest percentage of the uninsured, all but three are based in the South or the Midwest.”
All obama will do is outsource anyways. Just think about the all the lobbyists flocking to Washington DC because of obama’s reckless over-spending of $2 TRILLION in just 6 months, which alone is increasing the National Debt by 20%.
Politicians take people’s money and reward the large corporations, in this case companies in the health care industry, since they have the money to more effectively lobby politicians. In the end smaller businesses will be hurt.
Politicians will only reward companies that will be in their best political interest. Honestly, when can you really trust politicians since they are basically professional liars, and being president just means you are the best liar of the time. Why not just give the money directly from the people to the companies and take politicians in government out of the equation?
obama is going to recklessly spend TRILLIONS of tax payers’ money just to give insurance to about 25% of those who do not have it. Over 50% of people’s income go towards taxes, just imagine how many more people will afford health care insurance if their income is almost doubled because of dramatic tax cuts.
Competition is what is needed. It lowers prices of products and services, along with developing new innovations. All of which will benefit consumers. You need to remember that monopolistic tendencies can also apply to government.
The reason why the cost of insurance is high is because politicians in government mandate insurance companies to increase their premiums to pay for ridiculous things. In addition, politicians put up regulations so that Americans are not allowed to get insurance from another state and use the coverage in their own state. This reduces competition making it more expensive for people to get insurance. On top of that medical professionals are not allowed to freely practice their profession in any US state without taking a long and tedious licensing process. This again increases the cost of medical insurance.
In the end, the problem with most economic issues is too much government intervention of the economy by politicians, who will only tend to do things for political self interest. Just like how obama nationalized GM to pander to its unions. Politicians can barely run government, yet people think they can run a multi-national auto manufacturing company?
The solution is SMALLER government, LESS spending, and LOWER taxes.
I have appealed many decisions with insurance companies, and I have appealed bills directly with hospitals. And, when my mother was handling my rather expesnive medical costs, she did the same. She once drove to the hospital just to get 25 cents they owed her.
I have also had to appeal decisions with Medicaid once it had made up its mind.
Appealing to insurance companies is a breeze. Medicaid is not.
As for “reducing costs”-isn’t that the whole issue, right there?
There are two ways to reduce costs.
One is to cut into the salaries of medical professionals–not something I would entirely disagree with. But I also think, if that’s the case, they need to reduce the costs and unnecessarily hurdles of medical educations, and they need to strictly limit malpractice suits. Do what realtors do: malpractice/lawsuit payouts are limited in how much the customer can get, so the realtors don’t have to pay that much into it . But a doctor who gets sued loses his or her license.
You can reduce the cost of equipment and drugs. Some of that is artificially high, yes, but that goes back to R&D for new equipment and new drugs.
And don’t complain to me about “greedy insurance companies” and “Greedy pharmaceutical companies” and *then* complain about your retirement plan or 401(k), because your 401(k) is why those “greedy corporations” are so concerned with keeping stock prices high.
So, in practice, the way they reduce costs is by reducing services. This gets us back to health care rationiing, which is the real issue in all of this.
Also, what I find interesting is that your flow chart points to what conservatives have said for years: the “uninsured” are middle class Americans who don’t buy personal insurance. They can get it through all sorts of discount programs (e.g., Sam’s Club), but they *choose* not to buy it, or they can’t afford it on their salaries. So the plan is really about forcing those people to pay for insurance–which could just as easily be done by giving them tax breaks and requiring them to buy private insurance, like drivers are required to buy car insurance (and requiring insurance companies not to deny them).
Finally, you’re leaving out the part about taxing the private insurance plans to pay for the “public option,” which reduces the main incentive employers have for subsidizing private insurance.
Appealing to insurance companies is a breeze
Glad your individual case has worked so well. I had responsibility for a much larger group of people, thousands at a production plant. I had to put a steward on full time just to handle complaints and appeals. Of course, many who should have appealed never did, feeling the system was stacked against them. Management was totally open and reasonable. They were willing to switch to another insurer but were confident it would be no different (if not worse).