Not Change We Can Believe In
In this second posting, I wish to elaborate on the question: “Is the public option model change we can believe in?”
I wish I could, but sadly I see no reason or evidence to do so. But before readers who may be excited about this approach conclude that I am a “spoiler,” let me lay out my case, making educated guesses about what assumptions underlie the “public option theory.”
During his election campaign, President Obama said he believed that health care is a right, so I assume that whatever he does, granting this universal right must be a high priority. So to secure this right he has promised to “overhaul” health care.
Very well. What may he and his supporters (like Kennedy, Baucus, etc.) have in mind? They have called their approach “uniquely American,” and modeled it after Berkeley professor Jacob Hacker’s proposal of a “public option” competing with private plans within a “highly regulated health care market.”
I call them all “hope it works” health care policy.
The fundamental problem is that, because supporters of this policy hold false assumptions about health insurance – that it is something you can comparative shop for with the same ease you comparative shop for designer shoes – they send you comparative shopping for it. But you do not comparative shop for rights; you are entitled to them.
“But,” says the public option crowd, “we have to send you comparative shopping because this will control costs and make health care affordable to everybody!” But what if I still cannot afford meaningful coverage that will protect me financially if I get sick? They might answer, “don’t worry; the health care marketplace will be highly regulated.”
What would they mean by that? Let me lay it out schematically:
First, they mean that private insurers will be legally bound to sell policies to everybody, regardless of past or present health status, and at prices people can afford. (Note: we are not told how this regulatory machinery will be enforced, or who will pay for it, but we can infer that taxpayers will foot the bill and, given the history of private insurance business practices, it won’t be cheap).
Second, employers will either provide insurance or contribute to a public fund. Discussions are also now moving from Obama’s initial demand for a mandate for children to a “universal individual mandate” that will legally compel all Americans to buy insurance.
Third, public programs for “vulnerable (i.e. expensive or poor) populations” will be expanded (Note: again, we are not told who will foot the bill of the machinery to divide people up according to “vulnerable” or not, or who will pay for the public programs, but we can safely infer it will be all taxpayers).
Fourth, there will be subsidies for those who cannot afford market prices, yet who are not “poor enough” to qualify for public programs (Note: again, criteria for “poor enough” remain a mystery, and once more we can infer that taxpayers will pay for subsidies, whether or not they qualify for them themselves).
Fifth, and here is where the theme of this second posting comes into play, there will be a “public option” good enough to set high standards – assuming, that is, that private insurers do not kill this option or water it down enough to make it worthless. The high standards of the public option — presumed by Hacker, based on Medicare’s indicators of performance, to provide excellent services and fair prices — will force insurers to compete or drop out of the market.
Finally, the plan will encourage providers to use electronic medical records, emphasize preventive medicine and fund research on comparative efficacy of treatment options.
Then we will all hold our breath, and hope that all this works, somehow.
Don’t get me wrong. I am not against electronic medical records, preventive medicine, eating your broccoli and not smoking, or researching what really works in medicine. All else equal, they are wonderful things. But is there any reason to believe that all or any of these things will, for instance, increase our purchasing power so that health care becomes affordable and can be universally guaranteed, as it is everywhere else in the industrialized world?
Well, there is not, because as I discussed in my previous posting, purchasing power comes from bulk purchasing, and all of the above are irrelevant to it.
Nor do electronic medical records or healthy lifestyles have any connection whatsoever with the other big “cancer” of our system: the administrative overhead that comes from dividing people up according to a mind boggling number of policies or eligibility criteria. (Britons spend half of what we do, while providing comprehensive and universal coverage, since they created the National Health Services. And there is no evidence whatsoever that their costs are lower because they eat more broccoli or use computerized records).
“But,” you might still insist, “what about the public option?” Well, in the absolutely best case scenario, it will end up with all the “bad customers” (i.e. the sicker, the poorer and the “not so poor for public programs yet not poor enough to qualify for a subsidy”, etc.).
And of course the public option, by being just an option, will be deprived of the greatest strengths of social insurance: 1. risk pooling, which assures sustainability and lowest costs, and 2) cooperative compulsory contributions, which secures an economically and politically sustainable source of money to pay for health care for all.
“But”, you may still argue, “can we not hope that this time a hybrid “private-public” insurance model will work?” You can, but you can’t rely on any past evidence of success – quite the contrary. Similar “hybrids” giving a central role to private insurance have been tried, touted repeatedly as “ground-braking” by a complacent, misinforming mainstream media, and have failed, repeatedly. They were tried in Massachusetts in 1988; Oregon in 1989; Minnesota, Tennessee and Vermont in 1992; Washington State in 1993; Maine in 2003; and again in Massachusetts in 2006. (For excellent analysis of these attempts, see “State Health Reform Flatlines” [PDF].)
Now, I recognize that the picture I have given you is grim. But let me tell you about the change I, at least, can believe in. It is the change that grassroots, truly popular social movements are able to bring about. One such movement is the single-payer movement.
If all those who believe that health care is a right – and evidence indicates that it is the majority of the population – drop the self-defeating belief that a true right to health care is not “politically feasible” and join in this movement, its collective strength will move mountains. After all, during the civil rights movements, Americans did not say, “let us just negotiate that black people be able to sit in the rear half of buses and hope this will lead to a universal right to sit in the whole bus.” They settled for no less than full equal rights.
Single payer legislation has already passed twice in our state, and was vetoed, twice, by Governor Schwarzenegger and his fellow Republicans. It has recently been reintroduced by Senator Mark Leno. At the federal level, many brave Americans are being dragged out of Washington-sponsored meetings and thrown in jail for demanding single payer (see video clips in my reply to a reader’s comment on my previous post). And as more people continue falling into debt or suffering unnecessarily, many more will join the ranks of these brave Americans. There are only so many jails to throw the increasing number who fight for health care equity. And they – we – cannot be silenced forever.
This growing grassroots movement gives me real hope that meaningful change is on the horizon and that politicians will eventually have to listen.
Because it is ordinary people who hold the vote.
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Here is a contribution to the “public option” debate, from the national organization of physicians (to which i belong) that supports single payer universal health care. I think it is very instructive. I hope you find it useful.
Health Policy Q & A with PNHP Co-founders Drs. David Himmelstein and Steffie Woolhandler
Q: Should PNHP support a public Medicare-like option in a market of private plans?
A: PNHP should tell the truth: The “public plan option” won’t work to fix the health care system for two reasons.
1. It foregoes at least 84% of the administrative savings available through single payer. The public plan option would do nothing to streamline the administrative tasks (and costs) of hospitals, physicians offices, and nursing homes. They would still contend with multiple payers, and hence still need the complex cost tracking and billing apparatus that drives administrative costs. These unnecessary provider administrative costs account for the vast majority of bureaucratic waste. Hence, even if 95% of Americans who are currently privately insured were to join a public plan (and it had overhead costs at current Medicare levels), the savings on insurance overhead would amount to only 16% of the roughly $400 billion annually achievable through single payer.
2. A quarter century of experience with public/private competition in the Medicare program demonstrates that the private plans will not allow a level playing field. Despite strict regulation, private insurers have successfully cherry picked healthier seniors, and have exploited regional health spending differences to their advantage. They have progressively undermined the public plan – which started as the single payer for seniors and has now become a funding mechanism for HMOs, and a place for them to dump the unprofitably ill. A public plan option does not lead toward single payer, but toward the segregation of patients; with profitable ones in private plans and unprofit able ones in the public plan.
Would a public plan option stabilize the health care system, or even be a major step forward?
The evidence is strong that such reform would have at best a modest and temporary positive impact – a view that is widely shared within PNHP. Indeed, we remain concerned that a public plan option as an element of reform might well be shaped in a manner to effectively subsidize private insurers by requiring patients to purchase coverage while relieving private insurance of the highest risk individuals, stabilizing private insurers for some time and reinforcing their control of the health care system.
Given the above, is it advisable to spend significant effort advocating for inclusion of such reform?
No, for two reasons:
1. We are doctors, not politicians. We are obligated to tell the truth, and must answer for the veracity of our stance to our patients and colleagues over many years. Ours is a very different time horizon and set of responsibilities than politicians’. Falling in line with a consensus that attempts to mislead the public may gain us a seat at the debate table, but abdicates our ethical obligations.
2. The best way to gain a half a pie is to demand the whole thing.
Is fundamental reform possible?
We remain optimistic that real reform is quite possible, but only if we and our many allies continue to insist on it.
Feel free to ask if you have any questions!