Bell Curve The Law Talking Guy Raised by Republicans U.S. West
Well, he's kind of had it in for me ever since I accidentally ran over his dog. Actually, replace "accidentally" with "repeatedly," and replace "dog" with "son."

Thursday, June 11, 2009

Public Option or Bust! (revised)

The most important part of the health care reform is the so-called Public Option. Even if you didn't know anything else, you could tell this by the way it makes Republicans yelp. Republicans say two contradictory things about it. (1) The public option will undermine and destroy private insurance because it will be cheaper and everyone will therefore choose it (2) nobody wants a "public option" because they like their private insurance. duh... So let's all breathe a bit. If all that matters to the buying public is price, they will take the public option. That's why they have Kaiser now. If the public option provides bad care, you can still pay (much) more for private insurance, just like you do now. And if you can't afford private insurance now, at least you'll have something to protect yourself and your family. What's the problem?

The problem is that the Republicans - who are funded by insurance companies that spend some 20-40% of their income on administration and profit - are terrified. These are real figures, btw. Medicare, by contrast, spends less than 7% on administration and doesn't have to find profits.

(reprinted without permission from the Kaiser family foundation - no relation to Kaiser Permanente - which probably won't mind its research being part of the public discussion since it posts it on its website)

This chart shows the dramatic rise in administrative expenditures (the 20-40% figure came from a Washington Post piece I can't find again).

Here's more important information about the cost of private insurance (which shows why the $5,000 tax credit proposed by McCain and still proposed by the GOP is asinine):

And as long as I'm stealing charts. Here's some indication of how inequitably the US spends its health care dollars. Note just how almost half the population survives on just 3% of the health care money. This shows either (1) how much uninsurance and underinsurance there really is (2) how much money is wasted at the top end - or a combination of both. You think we can't find savings if 1% of the population spends almost a quarter of all health care dollars? I bet we can. Just think of how much better life would be for 50% of Americans if we raised the total spent on them from 3% to 4% - a 33% increase.

Conservatives and their insurance company backers know that a public option insurance will be as popular as medicare is and much cheaper. They also know that people will find public insurance to be a better product in other ways. The public knows that the various tricks of private insurers to drop coverage retroactively for sick patients ("rescission" in the terminology) will not be repeated for a public plan, and that alone will persuade many people to choose the public plan. Anyone who has dealt with private insurers know that federal bureaucrats can't hold a candle to them in terms of obstructionism and nastiness.

I, for example, am being billed $3,000 for *covered* emergency room services last Fall even after an appeal (where they granted me an extra $700), and I get no explanation whatsoever, and no choice but to hire a lawyer if I want to. No ombudsman or anything. No due process. And trust me, I know how to do appeals. This is Anthem Blue Cross, btw, and it's a platinum PPO plan. ( The good news is that the hospital itself is being reasonable with me). Any federal plan will give you notice and an opportunity to be heard about denials of coverage.

So the reason the Republicans are afraid of the public plan is that they know that it will be very popular and that private insurance will have to adapt (smaller profits, less cheating and stealing from their customers) or die. It's not true that most Americans like their current health insurance. Most Americans barely tolerate their current insurers, and those that are at all happy are usually those that haven't had to use it for anything.

If there's no public option, all we will get is a mandate to buy overpriced private insurance that doesn't work. It will be a mandate to fill the coffers of bloated private insurance companies that will provide the same poor swiss-cheese plans they do now. See Medicare Part D for more details...


Raised By Republicans said...

I think it would great to have the option of a publicly provided health insurance that would give basic coverage at a reasonable price.

I think it would also be great to allow people to spend more if they wish. It would force the current private insurance companies to be transform into niche providers who offer luxury services to narrow slices of the public.

But my God! 20% - 40% on administration? How can they claim to be a lean and mean market driven machine when they waste money on administration like that?

Dr. Strangelove said...

The private health insurance market is broken. Most consumers just take whatever they employer offers, and the employer has different incentives in its selection process. And even those consumers who are able to choose have little basis on which to choose--it is all so confusing and full of deliberately misleading fine print. Does anyone really know how much their health plan is supposed to cover? Do we have any idea what we are paying for?

RAND has done some good work comparing health care system reform alternatives. There is an excellent stoplight chart summarizing the affect of various options--although it is far from a complete list. Check out the site.

Raised By Republicans said...

By the way, this is a fight worth having. This is an issue so big that Obama would be well advised to risk a lot of political capital on this one.

I've seen poll numbers that show that a solid majority of both Democrats and Independents are behind him on this. Even Republicans are split on the issue with about a third of them favoring some aggressive reform on health care.

USwest said...

I agree we need a public option. The Republicans are contradicting themselves. As LTG points out, if everyone loves their private plan, then they won't go with public option. But on a slightly different, broader topic . . .

A recent piece in the Washington Post, written by a doctor, points out that from the 1960s to the 1980s, doctors worked in small collectives/clinics. Then, with the arrival of HMOs, they left the small collectives and in effect became employees of the insurance companies. The result was that patients no longer get the care they need, they get the care that the insurance company will cover. And he predicts that unless we fix that problem, then costs will rise, insurance companies will remain too powerful, and the medical system will go the way big banks have gone . . .bang! Will a public plan fix this? It seems to me that unless carefully designed, it may become just another player rather than a better player. Will doctors show a willingness to take less to treat patients? Will more doctors find merit in being general practioners? Will trained nurses agree to work in hospitals rather than approving agents for HMOs?

Our doctors, thanks to insurance companies, have become bureaucrats first and doctors second. Rather than diagnose, they use standard protocols to treat people. No thinking or listening involved. Their fear of lawsuits leads them toward standardization rather than working with the human in front of them. I am reminded of the mandatory minimums and the penalty grids that are used now in the justice system. This drive toward standardization of everything is destructive even if efficient. Judges are no longer judges. Doctors aren't doctors, nurses aren't nurses. Policemen aren't policemen. We aren't treated as professionals now, we are merely bean-counters looking at a grid to decide what to do. And when something bad happens, like a cop tazers a 72 year old woman at a traffic stop, we say, "He followed protocol."

Then we wonder by doctors are more motivated by profit and career rather than patient care or why many lawyers are more interested in billing by the hour than justice (present company on this blog exempted, I am certain), or why bankers and CEOs are more interested in making big bucks than keeping a company alive. Geeze, I sound like Marx. We've become divorced from your labor through the attempt an mechanizing things that should never be mechanized. But I digress.

So we can fix some problems in the system with reform. But I think that we really need a fundamental attitude shift.

Anonymous said...

Thanks to all...this was a good education...

Note on 20 to 40% admin cost: It is much cheaper than paying claims...those administrators are there to make sure the company doesn't pay a car recall....the actuaries calculate how many potential deaths there will be caused by a manufacturing error of a particular model, and they determine what it will cost in legal fees and payouts vs. what it would cost to recall and fix...same thing with the health care to day.

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