As Washington struggles to figure out what went wrong with Obamacare, and what will become of its centerpiece — the public option — much of the focus has been on the strategy, or lack thereof, for passing this complex legislation.
Should the White House have waded into this debate earlier and made clear that the public option was a sine qua non of health care reform?
Should Democrats have pushed the comparatively radical Medicare-for-All proposal of its Progressive caucus, understanding that the public option would be a negotiated fall-back?
Should the White House have pushed reform and the public option on moral grounds, rather than as cost savings devices?
All are legitimate questions. But this inside-baseball strategic debate misses perhaps the central variable in Obamacare’s collapse — the public option must sound incredibly odd to those citizens who do not spend their lives thinking about politics. In other words, as progressives rush to defend the public option, it is easy to forget just how weird their key proposal likely appears to the town-hallers.
Consider the arguments of Rep. Anthony Weiner (D-NY). Earlier this week, he made the cable television rounds to defend the public option. Against the charge that the public option would crush private insurance companies, Weiner responded that such an outcome would be acceptable because that is how competition works.
The problem for Weiner and the liberals demanding a public option is that this is not how competition works. At least not as understood by the vast majority of privately employed Americans.
I imagine that the middle-class Americans Obama is so eager to win back hear this argument and wonder:
If that is how competition works, then why not promote government run airlines and auto manufacturers to keep those private industries honest? For that matter, why not get into the hamburger business to discipline McDonald’s and Burger King?
What Weiner and the left argue matter of factly — that it is entirely consistent with free markets to have the government providing services in competition with private industry — has to sound off-the-wall when pitched to citizens at these town hall meetings. When defended openly and aggressively, as Democrats are defending it now, the public option appears fundamentally at odds with the understanding of free markets and liberal societies experienced and expected by the vast majority of Americans. The government should be in the business of providing public goods that private industry cannot provide. But it emphatically should not be in the business of competing with private industry. As the polling indicates, this expansive understanding of the government, as not only a market regulator but as a market actor and creator, is proving a tough sell to an American public that goes to Best Buy and finds Toshiba and Sony competing with each other and providing decent products, even absent a government-option in the television market.
With progressives taking the lead in selling the public option, it has become ever more clear that the difficulties for Obamacare are far too significant to be solved by some shift in strategy. The problem for the left is not merely overcoming the fear (Democrats would argue the misconception) of citizens that the public option will displace existing health coverage with inferior care and a higher tax burden. And their problem isn’t in the selling. The problem is that with their attempt to have government competing with private companies, Democrats are pushing a foreign sounding product that the American people just won’t buy.
And no amount of Washington strategery is going to change that.
48 responses so far
1 sinz54 // Aug 22, 2009 at 9:27 am
“If that is how competition works, then why not promote government run airlines and auto manufacturers to keep those private industries honest?”
That is, in fact, how Europe used to run things. British Airways was government run. And so were older companies like Hawker-Siddley and British Aircraft (which became British Aerospace). Then PM Margaret Thatcher began the process of privatization, for which the Left never forgave her.
2 ottovbvs // Aug 22, 2009 at 9:38 am
………so how do government and privately run health insurance operations manage to co-exist quite happily in many European countries one wonders
3 sinz54 // Aug 22, 2009 at 9:43 am
Any public “option” is just a steppingstone to government monopoly.
I was born and raised in New York City, so I’m familiar with how the City of New York monopolized the transit system. They did it much the same way as liberals hope to use Obamacare’s “public option” to nationalize health care coverage:
The first subways in Manhattan and the Bronx were privately built and owned by a private company, the Interborough Rapid Transit Company (IRT). Along came a sister company, also private, the Brooklyn Manhattan Transit Company (BMT), to build subways in Brooklyn and connect Brooklyn to Manhattan.
Then, starting in the 1920s, the City of New York got into the subway building business. Their goal, stated explicitly amongst themselves, was to use their own subways to help “buy out” the privately owned lines and “unify” subways under City control. (Sound familiar?)
So the IND built their subway lines only a few blocks from the BMT and IRT, not justifiable on economic or social grounds but was a blatant attempt to draw business away from the BMT and IRT.
At the same time, the Mayor refused to permit the IRT and BMT to construct any more subway lines. And he denied their petitions to raise subway fares, resulting in their losing money on each ride.
http://www.nycsubway.org/articles/historyindependentsubway.html
Eventually the BMT and IRT folded under this competition. And in 1940, the City took them over, resulting in a completely government-owned subway system.
Moral: When the Government says they just want to “compete” with private business, NEVER believe them. Because they never play fair. Their powers to tax as much revenue as they want to support their own operations, and issue arbitrary regulations which hamper the private operators, is inherently unfair competition.
What about the Postal Service? For 40 years, UPS had to engage in costly, state-by-state litigation to get the courts to accept UPS alongside the Post Office as a common carrier of packages regulated by the FCC.
To this day, Federal law prohibits any private business from competing with the Postal Service in the delivery of first class mail. (In the 1970s, a small start-up company, Brennan Delivery, tried to deliver first class mail letters in their town more efficiently than the Post Office could. The Post Office sued them and forced them out of business.) Revenues from the first-class mail monopoly, combined with heavy Federal subsidies, enable the Post Office to “compete” against UPS even though the Postal Service’s package delivery business is uncompetitive. If competition were truly “fair,” UPS and FedEx would be allowed to deliver first-class mail, the subsidies to the Postal Service would be ended–and the Postal Service would be out of business in a year.
4 ottovbvs // Aug 22, 2009 at 9:47 am
sinz54 // Aug 22, 2009 at 9:27 am
” That is, in fact, how Europe used to run things”
………back at the old non sequitur mills Sinz?…….some vague, long forgotten, mid size, British airframe manufacturer is our reference point for US healthcare reform?…….You also need to check out govt owned EADS that produces the Airbus…….that’s the way Europe still runs a lot of things…….and Boeing doesn’t actually kick Euro ass does it…….and btw Margaret Thatcher also nationalised RR aero engines when it went bankrupt because it was a strategic necessity much like Obama had to effectively take control of the auto industry for a while……such a rigid mind
5 sinz54 // Aug 22, 2009 at 9:53 am
ottovbs: Where??? I don’t see a European analogue to ObamaCare.
In European countries I’m familiar with, either the public health system is dominant by far, with private companies limited to providing supplemental insurance (like in France or Germany); or else the health care system is privately run but heavily regulated (like in Switzerland and Holland).
I believe that the Swiss and Dutch systems have a lot to recommend them. But ObamaCare is NOT structured like either of those. Heck, it’s not even structured like the French system. ObamaCare is a bizarre unstable hybrid of giant private insurers with a public “option” that will either end up driving the private insurers out of business, or else get into financial trouble itself (as the Postal Service now is).
Do you think ANY European country would trade THEIR health care system for ObamaCare’s “public option” alongside giant private insurers?
6 ottovbvs // Aug 22, 2009 at 10:00 am
sinz54 // Aug 22, 2009 at 9:43 am
” If competition were truly “fair,” UPS and FedEx would be allowed to deliver first-class mail, the subsidies to the Postal Service would be ended–and the Postal Service would be out of business in a year.”
……….Sinz you’re really one of the most brainless people I’ve ever encountered………I’m not holding the USPS as a model of efficiency but it is to some extent a social service……can you see Fedex or UPS running postal services in rural and small town America at anything approaching economic cost……and who lives in rural and small town America……Republican voters!……..so the next Republican president is welcome to turn over the postal service to UPS/Fedex I’m sure it will make him very popular……..the primary reason for the USPS current deficits are the collapse in mail volumes both domestic and commercial becasue of e mail and the economic slowdown so they have massive over capacity…..Fedex isn’t immune they lost money last year……in many ways your gross oversimplifications are a text book demonstration of why the GOP has lost its reputation for managerial competence
7 BUterrier // Aug 22, 2009 at 10:06 am
Your comparison with the electronics industry is unconscionable. Electronics and televisions are not essential services – Health Care is. If 50 million people in this country didn’t have television sets I think they wouldn’t be at the risk of losing their homes or savings.
Moreover, if these companies were to make and sell TV’s where the retail rate increased at the same rate that health care premiums are increasing they would find themselves out of business pretty quickly.
I also find it quite interesting that the two companies that you reference are not American. Too bad we cant import our health care from Japan huh? I’ll take a US government run health care plan before something we import from china or japan any day. Furthermore, I wonder how cheap those televisions would be if the those countries stepped up their labor protection laws, environmental protection laws, and also had to deal with fair trade agreements. The funny point is that while china exports all of these televisions to Best Buy, very few people in China actually have HD TVs.
The truth about the public option is that it will not drive out privatized industry and this post is disingenuous – like all of the talking points on the right. All the public option will do is raise the baseline, it will provide a cheaper alternative for those who cant afford private insurance. I admit, there will probably be a few companies, that have profited immensely in the past, that might be driven out of business – but that will be because the refuse to conform and try to lower costs.
There will always be a market for a insurance plans that will provide more coverage then a government option. The wealthy and the upper middle class will choose to use their resources to get more extensive and fuller coverage, which will not be provided by the federal government. All the rich republicans will still be able to to make sure their families are not going to be killed off by the federal government because they will have private insurance. What this will do is provide coverage for those who cant afford plans like that.
Free market capitalists should know that where there is demand, private industry will fill the vacuum. The plan currently being discussed will not be mandating a single payer system, it is providing an OPTION. Therefore, demand will always exist for plans that provide more than the government plan will do, and fortunately private industry will still provide that service.
And for any response, please don’t give me the slippery slope argument, thats the weakest argument of all. Lets discuss the plan as it is currently being proposed.
8 ottovbvs // Aug 22, 2009 at 10:16 am
sinz54 // Aug 22, 2009 at 9:53 am
“ottovbs: Where??? I don’t see a European analogue to ObamaCare……ObamaCare is a bizarre unstable hybrid of giant private insurers with a public “option”
……….You won’t because as you yourself p0inted out they are all very strongly govt regulated even when private insurers are big players as they are in Holland………..they have all also had forty years or more to evolve from what were in some cases much more hybrid systems whereas Obama is having to make bricks with the available straw and in the face of very powerful vested interests…….you seem to screaming because the system is an “unstable hybrid” and in the next breath complaining it’s going to be like European systems…….the reality is you are an ideological conservative who seem to harbor some personal animus against the president…..hence you keep trotting out a load of contradictory, ill founded and illogical complaints and criticisms which have the effect of making you appear exceedingly stupid which in reality I’m sure your not…….just a totally rigid idealogue
9 LFC // Aug 22, 2009 at 10:52 am
Henry Clay said… The Public Option Would Crush Private Competition
Crush? This appears to be a frank admission that the government can run healthcare more cheaply and with better customer satisfaction than private industry. Hmmmmmm.
Actually, I think his premise is BS. Let’s look at the quote he put up…
“If that is how competition works, then why not promote government run airlines and auto manufacturers to keep those private industries honest? For that matter, why not get into the hamburger business to discipline McDonald’s and Burger King?
So these industries are comparable to healthcare? I’m sorry, but please explain to me how if millions are denied access to airlines, new autos, or McDonald’s, they can die. Privately, every industry mentioned in that list can block plenty of people from getting their product or service without seriously endangering their lives. Why do you think firefighters are not privatized? Or police? “I’m sorry, ma’am, but you haven’t paid your firefighter bill, so we have to let your house burn to the ground with your baby in it.” If you can’t understand that healthcare and some other services are different from airlines, manufacturers, and restaurants, you have no business even being in this conversation.
10 balconesfault // Aug 22, 2009 at 11:02 am
buterrier – well put. Free market capitalists should know that where there is demand, private industry will fill the vacuum.
Exactly – unless there is some Federal prohibition on private insurance plans, I see no reason why even if we were to operate a universal health care system (which apparently, if we ran it as the Brits run theirs, we could do so for the same amount of money we’re already spending on Medicare and Medicaid) there wouldn’t be private insurance stepping up and providing additional coverage to people who didn’t like lines, or wanted more services than the Universal System provided, etc.
Yes, the Brits spend as much per capita on the NHS as all 300 million of us in America do on Medicare and Medicaid. And they cover everyone in the country.
I’m fine with ExxonMobil and Goldman Sacks and Microsoft and other high performing companies deciding that their executives will have gold plated healthcare plans that don’t make them muss with the hoi polloi. I have no problem with people afraid of “Death Panels” taking out supplimental policies that provide high end treatment benefits if government care is denied or delayed.
Again – if we manage to run this universal system the way the Brits run the NHS … we won’t spend any more taxpayer money than we already do.
And I have faith that American capitalists will step forward to provide those insurance products. Mr. Clay apparently doesn’t have as much faith in the free market system as some of us do.
11 LFC // Aug 22, 2009 at 11:05 am
sinz54 said… To this day, Federal law prohibits any private business from competing with the Postal Service in the delivery of first class mail.
There is a reason for that. It’s because mail is considered to be essential infrastructure. Things might change if UPS and Fed-Ex proposed that they deliver first-class mail to any home in the U.S. for one rate. But your example of Brennan Delivery is a great example. They wanted to do just local delivery. Well, of course they can deliver a 10 mile radius cheaply. So let’s say we let start-ups crop up and do just local delivery all across the country. Now the USPS has to raise rates because they no longer get much local delivery, so they mostly provide long distance and rural. Every person who sends a letter now has to look up the rate for their delivery, try to find out who delivers where, effectively making a simple system more and more inefficient.
There is a reason that nearly every industrialized nation (nearly every nation?) has a government run postal service. Ditto for our road system. And we can look at how well electricity privatization worked out for California.
12 LFC // Aug 22, 2009 at 11:12 am
balconesfault said… Exactly – unless there is some Federal prohibition on private insurance plans, I see no reason why even if we were to operate a universal health care system (which apparently, if we ran it as the Brits run theirs, we could do so for the same amount of money we’re already spending on Medicare and Medicaid) there wouldn’t be private insurance stepping up and providing additional coverage to people who didn’t like lines, or wanted more services than the Universal System provided, etc.
As long as you understand that the private insurance companies will only provide that coverage for the subset of people they deem to be profitable, just like today. If you have a pre-existing condition, forget it. Private insurance is all about risk management, and that means tossing people aside (or jacking their rates to force them aside when they get sick) to maintain profitability. You don’t have to screw all your subscribers (because you’d lose market share). Just the ones who are really going to cause you to pay out on the “insurance” policies you issued and said you’d back.
If you’re old, expect to pay a lot more for private insurance. Medicare Advantage, which uses private companies, provides similar coverage for a 14% premium which, as of today, the American taxpayer picks up. This program was a gift to the insurance industry.
13 balconesfault // Aug 22, 2009 at 11:37 am
lfc – I have no problem with any of that. Universal care means the people of the US deciding on what level of coverage we can afford to provide everyone, regardless of their economic situation. It also means there being some level of coverage we decide we cannot afford to provide everyone.
And it would be an appropriate free market function to provide that additional level of coverage for some price. Yes, pre-existing conditions (like old age – lol) would most certainly drive that cost up. Insurers have a right to protect themselves from the costs of higher risks.
They even have the right to consider universal healthcare a “risk” and spend a lot of money fighting it. That doesn’t mean we need to accept their arguments, though.
14 liv&win // Aug 22, 2009 at 11:41 am
Clearly a public option would compete directly with private health plans. And it would enjoy competitive advantages because it doesn’t have the same regulation and accounting rules as a private plan would. Besides taxes, office rent, equipment and indirect labor costs, the government could also reduce or even ignore reserve requirments as they did with Fannie and Freddie. This would be both a competitive advantage and a taxpayer risk. Public accounting versus private accounting also allows more ways to skew the tables to the public option.
And here is what we know, Medicare is on its way to insolvency despite its monopoly for people age 65 and older. Medicare has no competitor and it is failing financially. Sure, people like it, it has decent benefits and it costs next to nothing compared with the cost of care. It is a simple plan so that doctors and patients all know what is covered. And significantly, because Medicare reduces payments to doctors so much, people on MediCare think, rightly, that they are getting a great deal.
But that program, despite being a monoply, doesn’t operate in a vacuum. Providers are basically forced to raise their fees for everyone else. This cost shifting is real, and it will be a major problem for hospitals and doctors if the public option becomes part of this plan.
But, before we get to that point, people will have choice. and they will see that the government plan costs $x, and their private plan costs $x+25%. And even thought $x is an artificially low number (remember, we’ve done nothing to actually address supply and demand other than paying doctors less), people will take the lower cost deal. And when insurance companies start to lay-off more and more people, the public safetey net will be strained.
I find it interesting that what private health plans want is a well regulated level playing field where competition can flourish. They are interested in creating and competing in an environment where profits can be made from being more efficient at keeping people healthy and helping the patient access quality care at competitive prices. But the system, because underwriting is a significant source of competitive advantage, is out of alignment. Take away many underwriting aspects, simplify the rules so everyone knows them, and the system can realign itself with what the customer really wants. I believe this because I believe in capitalism.
The reason many people don’t want the public option is that it isn’t what they want. And more importantly it doesn’t meet their criteria that we should be moving away from bureaucratic interference between a patient and his/her doctor. Another thing people want is simplicity. While no one can argue that private health plans are understandably simple, Obamacare takes that shortcoming to new lows.
We need to restart this entire discussion. Let’s begin with what you ultimately want out of health care. I want reasonable access to quality health care at an affordable price which is free from bureaucratic interference in my health choices and decisions and which provides a reasonable level of choice in choosing my health care providers. This, I think, is health care at its most basic level. If we are all agreed, then we are necessarily talking about universal coverage, and then it is a matter of working out the details. What is reasonable access? What does it mean? And what are those factors which affect supply and demand which necessilarly translate into how long you have to wait to see your doctor?
Quality health care- what does this mean? Perhaps it is a function of efficiency and effectiveness. How fast was there a diagnosis, how quickly did treatment begin and how effective was the treatment?
Affordable Cost – what’s affordable. I don’t know, but I would say that we should start at 15% less than we are paying right now, and hope to eliminate health care inflation so that costs rise or fall along with prices in the rest of the economy rather that 4 times as fast as the rest of the economy.
Freedom from bureaucracy – while I don’t want a bureaucrate between me and my doctor, I also need an advocate to make sure my doctor is doing right.
Choice – easy, global contracting. This is a major playing field leveler and administrative cost reducer. Now, private plans can be what they are truely meant to be, a method of financing the sometimes catastrophic cost of medical care and a consumer advocate.
15 balconesfault // Aug 22, 2009 at 11:56 am
Besides taxes, office rent, equipment and indirect labor costs
Government most certainly pays for office equipment and in a sense “rent” – check with how the GAO totals up the cost of programs – they most certainly include those costs.
Could you illustrate what you mean by “indirect labor costs”?
Meanwhile, are you implying that were insurance companies to be non-profit … that they would still pay taxes? Or is what this whole fight is over is a private sector right to profit immensely from insuring healthcare, that government would be taking away by providing competiton?
“I want reasonable access to quality health care at an affordable price which is free from bureaucratic interference in my health choices and decisions”
I assume then that you eschew the private health insurance system? Or are you just willing to pay far far more for your insurance than the average company-provided healthcare program can afford?
16 liv&win // Aug 22, 2009 at 11:57 am
BUTerrier – you discuss government run health care, and I’ll advocate for private industry. What I would like is to have the data points identified and then discuss how your plan addresses each one. At base, the public option is a monopoly like Medicare. It does most of its job well except it falls terribly short on financial stability. Private health plans respond to customers in a market which needs government regulation to be truely competitive, but are very much intune with being a long term financially viable option. they have to or they cease to exist. Funny how Darwin’s theories are present everywhere but in government and among religious extremists.
17 balconesfault // Aug 22, 2009 at 12:06 pm
liv&win:
This: “Private health plans respond to customers in a market which needs government regulation to be truely competitive”
And this: “Funny how Darwin’s theories are present everywhere but in government …”
I see an inconsistency here. Do you?
18 ottovbvs // Aug 22, 2009 at 12:09 pm
liv&win // Aug 22, 2009 at 11:41 am
“And here is what we know, Medicare is on its way to insolvency despite its monopoly for people age 65 and older. Medicare has no competitor and it is failing financially.”
………Why do you keep misrepresenting the facts ?……Medicare’s funding problems stem from the increasing costs of paying for the provision of care not from the costs of operating the Medicare system which everyone apart from you accepts costs around 3% of disbursements………You’re even distorting about their lack of competitor……..Advantage plans are a competitor and account for about 20% of seniors
” Providers are basically forced to raise their fees for everyone else. This cost shifting is real, and it will be a major problem for hospitals and doctors if the public option becomes part of this plan.”
……….What you’re saying is that doctors and hospitals are running businesses and they want to protect their margins which is fine……but unless we do something about costs of provision it means healthcare in this country is going to go from it’s current 17% of GDP to over 20% in 9 years…..ultimately the margins that providers achieve have to be reduced and they will respond in the same way any business does by getting cost out of the product and cutting expenses and probably not make as good a return as historically
“The reason many people don’t want the public option is that it isn’t what they want”
……..Numerous polls show 60% plus support for the public option
“while I don’t want a bureaucrate between me and my doctor”
……..And insurance company bureaucrats don’t get between you and your doctor?
19 ottovbvs // Aug 22, 2009 at 12:13 pm
16 liv&win // Aug 22, 2009 at 11:57 am
“At base, the public option is a monopoly like Medicare. It does most of its job well except it falls terribly short on financial stability.”
………Which arises out of the cost of what it has to pay for not the Medicare model per se……..why do you keep practising this intellectual deception I wonder
20 ottovbvs // Aug 22, 2009 at 12:20 pm
balconesfault // Aug 22, 2009 at 11:56 am
“Government most certainly pays for office equipment and in a sense “rent” – check with how the GAO totals up the cost of programs – they most certainly include those costs.”
………liv&win has been peddling the fiction that Medicare has no overhead for weeks…….he works in the insurance brokerage business probably although he’s somewhat coy about it……generalities and distortions are the standard modus operandi
21 Churl // Aug 22, 2009 at 1:02 pm
Thus spake Otto: “………so how do government and privately run health insurance operations manage to co-exist quite happily in many European countries one wonders.”
Otto, for one who knows so much, you disappoint by wondering, not explaining. How DO privately run insurance operations coexist with each other in “many” European countries? How many countries and which ones? The world awaits enlightenment.
22 sunroof // Aug 22, 2009 at 1:04 pm
There isn’t a healthcare system in the world that doesn’t have its positives and negatives. Instead of highlighting the weaknesses of other systems, the US should be looking to cherrypick strengths.
1. For example, why not adapt a version of single payer systems by creating a clearinghouse owned and operated by all insurance companies, cooperatives and the government handle all transactions related to patient and physician claims. Why does each have to have its own vast bureaucracy, its own forms, its own codes, etc.? Many industries have clearinghouses – banking, travel agents, etc. Stock exchanges are a form of clearinghouse. Consolidate and standardize the paper work, then have all claims filed electronically and all payments handled by electronic deposits. That’s how the system works in Ontario. My doctor files his daily claims electronically and is paid electronically in a matter of days. His commitment to paperwork is a fraction of the time put in by US doctors and institutions.
2. Have a single entity negotiation nationwide prices with the drug companies. Again, this is cooperative concept that mimics a statist system. The sheer muscle of pooled buying power will lower drug prices without cutting into the quality of the drugs. The same cooperative body could buy hardware like MRIs on a bulk basis, and while manufacturers might wince at having to give better pricing, the competition for these large orders would be immense and winning would mean a guaranteed income stream for years.
3. Reform malpractice rules. No country has a bigger problem with malpractice suits than the US. Most countries place lower limits on suits, and hence doctors have cheaper insurance and more importantly, less incentive to submit patients to wasteful or redundant procedures.
4. Encourage clinic models where expensive equipment is used effectively, 24/7. There is no need for each doctor in the US to have his or her own ultra-sound equipment. Statist systems discourage the accumulation of so much stranded capital. My doctor in Toronto doesn’t have an ultra-sound machine – he sounds me to the privately owned lab two floors down which does the test and bills the health care system.
I’m sure there are dozens upon dozens of ways the US could borrow best practices from other countries without implementing their entire systems.
Right now, however, the real opportunities are overlooked as the debate is increasingly centered on red herrings, like Canada’s or Britain’s healthcare system, good or bad. Leave us to our system, change yours for the better, so we can cherrypick the good things you do.
As for the universality question, once universal coverage is available one way or the other, and the young healthy people who are skipping coverage now are forced into plans, this issue will resolve itself. And the young will be grateful (eventually) for it. I never needed the public healthcare system in my 20s, but paid into it anyway, and now that I am into my 50s and using it more – if only for checkups and tests – I am grateful not to have to worry about it. I am grateful because I am now self-employed but don’t have to be worried about coverage. And those who I know are employed don’t have to worry about being pushed out of their jobs because of high employer healthcare costs. And they don’t have to stick to a job they hate because they are afraid of losing their current coverage. They have complete portability by virtue of public health care. These are benefits not well appreciated by many Americans, especially the portability issue. If the US could create portability in healthcare coverage and portability in retirement savings, it would have a substantial, positive impact on productivity in the US.
23 sunroof // Aug 22, 2009 at 1:12 pm
There isn’t a healthcare system in the world that doesn’t have its positives and negatives. Instead of highlighting the weaknesses of other systems, the US should be looking to cherrypick strengths.
1. For example, why not adapt a version of single payer systems by creating a clearinghouse owned and operated by all insurance companies, cooperatives and the government handle all transactions related to patient and physician claims. Why does each have to have its own vast bureaucracy, its own forms, its own codes, etc.? Many industries have clearinghouses – banking, travel agents, etc. Stock exchanges are a form of clearinghouse. Consolidate and standardize the paper work, then have all claims filed electronically and all payments handled by electronic deposits. That’s how the system works in Ontario. My doctor files his daily claims electronically and is paid electronically in a matter of days. His commitment to paperwork is a fraction of the time put in by US doctors and institutions.
2. Have a single entity negotiate nationwide prices with the drug companies. Again, this is cooperative concept that mimics a statist system. The sheer muscle of pooled buying power will lower drug prices without cutting into the quality of the drugs. The same principle could buy hardware like MRIs on a bulk basis, and while manufacturers might wince at having to give better pricing, the competition for these large orders would be immense and winning would mean a guaranteed income stream for years.
3. Reform malpractice rules. No country has a bigger problem with malpractice suits than the US. Most countries place lower limits on suits, and hence doctors have cheaper insurance and more importantly, less incentive to submit patients to wasteful or redundant procedures.
4. Encourage clinic models where expensive equipment is used effectively, 24/7. There is no need for each doctor in the US to have his or her own ultra-sound equipment. Statist systems discourage the accumulation of so much stranded capital. My doctor in Toronto doesn’t have an ultra-sound machine – he sends me to the privately owned lab two floors down which does the test and bills the health care system.
I’m sure there are dozens upon dozens of ways the US could borrow best practices from other countries without implementing their entire systems.
Right now, however, the real opportunities are overlooked as the debate is increasingly centered on red herrings, like Canada’s or Britain’s healthcare system, good or bad. As a Canadian, I say: Please leave us to our system, and change yours for the better so we can cherrypick the good things you do.
As for the universality question, once universal coverage is available one way or the other, and the young healthy people who are skipping coverage now are forced into plans, this issue will resolve itself. And the young will be grateful (eventually) for it. I never needed the public healthcare system in my 20s, but paid into it anyway, and now that I am into my 50s and using it more – if only for checkups and tests – I am grateful for it. I am grateful because I am now self-employed but don’t have to be worried about losing my coverage, about the rising cost of coverage for the self-employed, about nasty surprises like being denied coverage for a “pre-existing condition”, etc. And those I know who are employed don’t have to worry about being pushed out of their jobs because of high employer healthcare costs. They don’t have to stick to a job they hate for fear of losing their current coverage. They have complete portability by virtue of public health care. These are benefits not well appreciated by many Americans, especially the portability issue. If the US could create portability in healthcare coverage and portability in retirement savings, it would have a substantial, positive impact on productivity in the US.
24 ottovbvs // Aug 22, 2009 at 1:17 pm
Churl // Aug 22, 2009 at 1:02 pm
” Otto, for one who knows so much, you disappoint by wondering, not explaining. How DO privately run insurance operations coexist with each other in “many” European countries? How many countries and which ones? The world awaits enlightenment.”
………I speak of what I know, and when I don’t know, I say so…….unlike yourself who speak of nothing which is probably an accurate reflection of how much you know
25 oldgal // Aug 22, 2009 at 1:20 pm
If the public option would drive out private insurers, why haven’t non-profits driven out private insurers in states where they exist? Isn’t there an underlying assumption here that all of the folks that are currently opposing a public option would opt for that public option? If not, wouldn’t there still be sufficient demand for private insurance?
26 ottovbvs // Aug 22, 2009 at 1:22 pm
sunroof // Aug 22, 2009 at 1:12 pm
“There isn’t a healthcare system in the world that doesn’t have its positives and negatives. Instead of highlighting the weaknesses of other systems, the US should be looking to cherrypick strengths.”
…….Philosophically I agree with you but you can’t ignore political and organizational reality…..we are where we are…….whatever passes in the fall is going to evolve over time as we discover what works and what doesn’t …….that’s what’s happened with all these European systems two of which I have personal experience of (Britain and France)
27 Churl // Aug 22, 2009 at 1:24 pm
Otto, so you don’t know much about the European health systems you seemed to be promoting.
I apologize for asking for details; I mistook you for a while like a fount of knowledge just waiting to gush wisdom to us unelightened ones.
28 Churl // Aug 22, 2009 at 1:25 pm
correction “I mistook you for a while to be a fount of knowledge…”
29 ottovbvs // Aug 22, 2009 at 1:39 pm
Churl // Aug 22, 2009 at 1:24 pm
“Otto, so you don’t know much about the European health systems you seemed to be promoting.’
……..I know quite a lot about two of them because I’ve been treated in them…..I also know the rest are a) universal b)feature a mix of private/public insurance c) they are all closely govt regulated d)they all cost about half what ours does c)none of the citizens of these countries would choose our shambolic and expensive system over their own……..sorry if this knowledge is offensive to you
30 ottovbvs // Aug 22, 2009 at 2:03 pm
Churl // Aug 22, 2009 at 1:25 pm
” correction “I mistook ”
………Call me Gradgrind if you like……what I find harder to understand is your enthusiasm for commenting from a position of semi or total ignorance…..is it genetic or cultural
31 liv&win // Aug 22, 2009 at 3:19 pm
balc: indirect labor costs include the percentage of labor used to bill, collect and redistribute taxes from the IRS to CMS. http://www.bcbs.com/issues/uninsured/Sherlock-Report-FINAL.pdf
In the attached, the author also discusses that claim and service functions outsourced to private industry in Medicare are not accounted for in their administrative expenses. There are other “management” costs which are not accounted for. For example, the percentage of time and expense of congressional deligations and assistants devoted to Medicare. The government also utilizes other agencies efforts and budgets at times to assist them in their functions.
My point is that public accounting is far different and less accurate than private accounting when analiyzing administrative expenses. A private firm would have to account for all plan adminsitrative aspects whereas the government doesn’t. The government also borrows money to fund its activities. the interest on the debt attributable to Medicare is not accounted for in its budget.
Balc, if you can show me a detailed budget on Medicare, I would like to see it. My point in main is that let’s understand that the comparisons we are making are often apples and oranges. Either we admit that and explain why the apple is a superior fruit, or we make an honest attempt to equalize apples and oranges so that comparisons are fair, honest and understandable.
If you have read my posts, I don’t think health care costs can be reduced by increasing competition amoung insurance companies within the present system. The cost of health care, and therefore health insurance is determined by how much it costs to see the doctor and how many times in a period of time you visit the doctor. I also don’t think medical care competition is best served within the concept of prices. Health care should compete on the basis of quality, efficency and affectiveness. Those that win at that game should be compensated better than those that don’t provide the consumer with a better experience.
there is also the problem that medical care as it is currently organized doesn’t fit with tradional supply demand models. In medical care, suppliers have too much control over both supply and demand. For example, a doctor simply tells you he wants you to come back next month for a follow-up, regardless of if you are feeling well or not, and you comply. Who controlled supply and demand?
In my recommendations, I am taking these data points into consideration when attempting to build a better system. So, as I said, lets get all the data points out on the table and develop something that addresses them all. You may also recall that I am in favor a system that is similar to single payer, universal coverage for primary care services (medical, dental, oral, vision, mental health and alternative therapies like accupuncture and chiropractic). For secondary services, knowing the data points as I do, I think private insurance which has a national network of hospitals and specialists, where there are no pre-existing conditions, no employer mandate, fully portable and consumers can vary their coays, coinsurance, deductibles, out of pocket maximums to whatever level they need to to fit their needs and their budget is an idea worth exploring. I say this because one of the things I want more of is freedom, freedom from government interference in my life choices.
32 liv&win // Aug 22, 2009 at 3:25 pm
otto, don’t be a grind by insulting people. Or are you getting paid more for rude and hostle posts?
33 ottovbvs // Aug 22, 2009 at 4:09 pm
liv&win // Aug 22, 2009 at 3:25 pm
“otto, don’t be a grind by insulting people. Or are you getting paid more for rude and hostle posts?”
……….Why do you feel it necessary to keep repeating these falshoods about Medicare’s funding problems……if any of my claims about the real nature of these is incorrect tell me where…….Mr Gradgrind btw is a character in the Dickens novel Hard Times who is overly addicted to facts
34 ottovbvs // Aug 22, 2009 at 4:21 pm
liv&win // Aug 22, 2009 at 3:19 pm
“balc: indirect labor costs include the percentage of labor used to bill, collect and redistribute taxes from the IRS to CMS. http://www.bcbs.com/issues/uninsured/Sherlock-Report-FINAL.pdf”
……..Before even taking a look at this(which I will because I’m genuinely interested) I’m going to guarantee it’s written by some consultant who has been paid by a group of insurance companies to produce the report……this probably had something to do with it’s conclusions
35 liv&win // Aug 22, 2009 at 4:32 pm
Otto: From the GAO:
“While today’s debt numbers are large, they do not represent a measure of all future claims. They exclude a number of significant items, such as the gap between currently scheduled Social Security and Medicare benefits and the revenues earmarked for these programs as well as the
likely cost of veterans’ health care and a range of other commitments and contingencies that the federal government has pledged to support. For example, the Statement of Social Insurance in the 2007 Financial Report of the United States Government disclosed that as of September
30, 2007, for Social Security and Medicare alone, projected expenditures for scheduled benefits exceed earmarked revenues (i.e., dedicated payroll taxes and premiums) by approximately $41 trillion over the next 75 years in present value terms. Of that amount, $34 trillion is related to Medicare and $7 trillion to Social Security.”
That is a fiscal deficit of $34 TRILLION. Please explain why you think Medicare is a fiscally prudent and well managed program?
36 liv&win // Aug 22, 2009 at 4:38 pm
otto:”……..Before even taking a look at this” I am going to argue that because it is written by someone I don’t like, all their facts and conclusions are erroneous.
that otto is an ad hominem logical fallacy. Do you get paid more to post logical fallacies? How much do you get paid to post here anyway?
37 ottovbvs // Aug 22, 2009 at 4:56 pm
liv&win // Aug 22, 2009 at 4:32 pm
“That is a fiscal deficit of $34 TRILLION. Please explain why you think Medicare is a fiscally prudent and well managed program?”
……..Still misrepresenting I’m afraid…….these are the likely liabilities Medicare will incur in paying for medical care for enrollees over the next 75 years……It is NOT the cost of administering the Medicare program……I’m beginning to wonder if you understand the difference……..all this proves is that the govt has, of now, underfunded one of it’s major social programs leaving aside the fact that 75 years is an utterly ridiculous timeframe(do you think govt is going to do nothing about this for the next 75 years)……..What you’re essentially complaining about is the concept of Medicare not how it’s
administered.
……..And I did a quick eyeball of the Sherlock report, and guess what, it’s from a consultant hired by BCBS……….I’ll read it in more detail when I have time but I immediately spotted one inconsistency in the exec summary……Sherlock claims insurance admin costs average 9.18%…….I then checked this against the 2009 financial results from Wellpoint who are the largest health insurers in the land(about 35 million enrollees) and actually operate the BCBS franchise and their admin figure is 17.1%!
38 ottovbvs // Aug 22, 2009 at 5:01 pm
liv&win // Aug 22, 2009 at 4:38 pm
“How much do you get paid to post here anyway?”
……..Zippo…..I told you exactly what my background was while you continually avoid it leading me to conclude that you’re probably in the insurance brokerage business
” I am going to argue that because it is written by someone I don’t like, all their facts and conclusions are erroneous”
……..No it means I’m going to treat it with some scepticism because, guess what, I know consultants get paid by companies and trade associations for writing slanted reports……..I’ve commissioned the odd one myself
39 liv&win // Aug 22, 2009 at 5:43 pm
otto: I don’t think you get it. I know what administration in health care is. While I have argued with you about administrative costs, my arguement has always been the unfunded liability issue. And that is an issue you consistently sweep under the rug. By doing so, I am certain you don’t get it. 75 years is indeed a long time. But not nearly as dramatic as a $34 Trillion deficit.
Medicare was established in 1964. By 1970, the deficit disaster was well recognized. that was nearly 40 years ago. 40 years ago, consultants and advisors stood up and said, “hey there, we have a big problem coming down the road.” Almost every year since, the report has been the same. “we have estimated revenues and estimated expenese, and there is going to be a huge deficit.” And the brilliant politicians said the same thing you did, “oh thats 75 years away…we can’t worry about that” (not exactly your words).
So, I wonder, do you think the actuaries just make this stuff up? that is will all just go away? Do you have any point of comparison of what $35 Trillion is?
Further, when you are advocating public universal health care, I would appreciate it if you would at least recognize that you are advocating a permanent plan. And to be permanent, it must be sustainable from one generation to the next. Your generation F#&#ed that up for the next generation and now you want to F$&K it up for the next 4 generations.
every american under the age of 45 should start a revolt. They have been screwed, before many of them were born, by the baby boomers and greater generation.
40 liv&win // Aug 22, 2009 at 5:54 pm
Let me say that again, if you are under 45 years old, you have been screwed by your parent’s generation, probably by your grandparent’s generation and possibly by your great-grandparent’s generation. For you who are much younger, you have been screwed since long before you were born. the previous generations did nothing to provide you with a sustainable system. they ruined the environment, they raided the treasury, they heaped trillions of dollars of debt on your backs. They never thought about what comes next.
Those that are blindly supportive of a government takeover of health care are also guilty of not considering what comes next. They refuse to address that. That will be your burden and the burden of your children and theirs.
Do you know why their is such fierce, illogical appeal to government run health care? Because the boomers want to make sure you fund their retirement. The boomers don’t give a shit about you. Their entire existence has been about them. It was always about them. It will always be about them. F*&K them back, take your country back and make them pay!
41 ottovbvs // Aug 22, 2009 at 6:13 pm
liv&win // Aug 22, 2009 at 5:43 pm
“I know what administration in health care is. While I have argued with you about administrative costs, my arguement has always been the unfunded liability issue.
……..Actually your argument has not been about the unfunded liability……..You obviously hate Medicare as a concept but have always muddied the waters by trying to make it about the cost of administering Medicare
“And that is an issue you consistently sweep under the rug. By doing so, I am certain you don’t get it. 75 years is indeed a long time. But not nearly as dramatic as a $34 Trillion deficit.”
……….I’m not sweeping anything under the rug……I’m well aware we have a 34 trillion Medicare deficit(although 75 years ludicrous way of measuring it)……. almost all of it for the provision of care…….so the problem is to contain the growth in the cost of care which btw will equally afflict private insurers
“And the brilliant politicians said the same thing you did, “oh thats 75 years away…we can’t worry about that”
……..For the 44 years since passage Republicans have been in power for 28 years and Democrats for 16…..neither show any enthusiasm for eliminating Medicare….nor should they……the bottom line of any liability grows out of the fact we’re running a non universal program that costs twice as much as anyone else……bring our costs into line with our peer group and 34 trillion becomes 17 trillion in round terms
42 liv&win // Aug 22, 2009 at 6:23 pm
To those under age 45, who don’t believe me. Look what is in store for you, courtesy of the GAO:
For example, under our alternative simulation closing the fiscal gap would require spending cuts or tax increases equal to 6.7 percent of the entire economy over the next 75 years, or about $54 trillion in present value terms. To put this in perspective, closing the gap would require an increase in today’s federal tax revenues of more than one-third or an equivalent reduction in today’s federal program spending (i.e., in all spending except for interest on the debt held by the
public, which cannot be directly controlled) and maintained over the entire period.
My young american friends, very little of this is your problem. Why should you be burdened by the failings of the prior generations? This report says that for the rest of your life, and most of the life of your children, you will be paying out the ass for those that came before you. this is debt, not a capital building campaign. You are not getting anything in this bargain. All you are doing is paying off someone else’s debit. You will not be saving more, enjoying life more. You will be in virtual servitude to the boomers. You need to wake up NOW.
43 ottovbvs // Aug 22, 2009 at 6:52 pm
liv&win // Aug 22, 2009 at 6:23 pm
” My young american friends, very little of this is your problem. Why should you be burdened by the failings of the prior generations?….you will be paying out the ass for those that came before you.”
……..Au contrare…. to the rather hysterical rantings of my young friend they’ll actually be paying out the ass for themselves most of the time because they’ll all be dead before the 75 years is up…..with current life expectancy anyone over 45 is going to be dead in 35 years still leaving 40 years on your timeline to run
……..Now let me see on a 75 year time line if you’re 45 that means in 20 years time you’ll be partaking of this largesse which will still leave 55 years of it to run…..you’ll be dead about 15 years later which would still leave about 40 years of the timeline to run
……Now take a 25 year old, you’ll be partaking of this largesse in 40 years time with 35 years of the timeline to run…..you’ll be dead 15 years later, say 20 for increased life expectancy with still 15 years of the time line to run
……….His other numbers are bs too……these GAO calculations are based on the assumption no one does anything about cost for 75 years, annual growth rates of around 2.2% when we’ve averaged abut 3.3% for ever
……….liv&win…..bs ever was thy name
44 liv&win // Aug 22, 2009 at 7:13 pm
Thanks otto for making my point. You prove my thesis about boomers.
45 ottovbvs // Aug 22, 2009 at 7:28 pm
liv&win // Aug 22, 2009 at 7:13 pm
“Thanks otto for making my point. You prove my thesis about boomers.”
………..and you claim you’re ultra logical?…what a laugh ……the majority of the 75 year time line is consumed by the under 45’s not the over 45’s……….Btw when are you going to start sending me some checks to cover your education………not that it seems to have been that beneficial in the math dept
46 LFC // Aug 22, 2009 at 8:48 pm
And here is what we know, Medicare is on its way to insolvency despite its monopoly for people age 65 and older. Medicare has no competitor and it is failing financially.
I find it amusing that people point to Medicare’s woes, but fail to note that payments (premiums) into Medicare are less than those going to private insurance companies, or that Medicare picks up the most expensive people to insure.
We already have a direct comparison of Medicare vs. private insurance. It’s called Medicare Advantage, and it costs the taxpayers 14% more than Medicare. That tells me that we’re better off funding Medicare instead of paying a huge premium to cover private insurer’s profits.
47 Spartacus // Aug 23, 2009 at 12:42 am
If a public plan would inevitably eliminate all private insurers, why are private insurers thriving alongside public options in California, Singapore, France?
If a public option will crush all private insurers, how do you explain the fact that private insurers in the Netherlands resulted in the elimination of the public plan there?
The conservative/GOP argument against the public option on the grounds that it will eliminate private insurers is the closest thing we have to the long-ago proven false arguments that the world is flat and the sun revolves around the earth.
Conservatives and the GOP are simply impervious to facts.
48 ottovbvs // Aug 23, 2009 at 2:34 pm
Spartacus // Aug 23, 2009 at 12:42 am
“Conservatives and the GOP are simply impervious to facts.”
………Unfortunately yes so they substitute spin, obfuscation, mcguffins, and if they don’t work out, downright lies…….they are desperate to maintain the status quo and have no viable alternative……..not that any of this stuff matters because at the end of the day the Obama admin will pass this
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