The "Opt-Out" Compromise May Actually Be Better Than a Pure Public Option
There's been a lot of discussion in the last 24 hours about a potential public option compromise. The proposal is to have a national public insurance option but to allow individual states to opt-out if they don't want to be a part of it.
Among those who have been fighting the hardest for the inclusion of a public option (and doing a fantastic job, I should add), this proposal has been greeted with a lot of skepticism and even outright scorn.
With all due respect, though, I think these folks may be reflexively dismissing something that could turn out to be as good or better than a full public option.
First, as a purely political matter, this proposal is much more likely to pass than a pure public option. And if you assume that some sort of compromise will be necessary to get sufficient support in the Senate, this is definitely the compromise to make, because it gives up very little. Like Nate Silver, I suspect the vast majority of states would not opt-out. It's one thing for national Republican politicians to preen and posture about death panels and socialized medicine. But at the end the day, states--even very Republican ones--tend not to opt-out of federal programs that provide benefits to their citizens. How many red states have opted out of Medicaid? Or the stimulus bill? The GOP and the insurance companies may be good at scaring people about hypothetical reforms, but it's much harder to convince people that they shouldn't have access to something that their friends and family in the next state over do. State politicians would also be wary of putting businesses in their state at a competitive disadvantage. Any lobbying from the insurance industry in favor of opting out would be counterbalanced by lobbying from businesses who want to have more options for insuring their employees and more competition to keep premiums under control. Ultimately, I doubt all that many state-level Republicans would be clamoring to opt-out of the public option.
So under one very plausible scenario, no states would choose to opt-out (at least for very long) and we'd come away with a robust national public option that's available to everyone.
But suppose a number of the red states do opt out. Would that really be so bad? I don't think so, and here's why. First, it's not as if the citizens in those states would be completely deprived of the benefits of the bill. They would still be protected from denial of coverage for pre-existing conditions. They would still be eligible for the subsidies in the bill for purchasing insurance. And because the majority of states would choose not to opt-out, the citizens of opt-out states would still indirectly benefit from the competitive pressure provided by the national public option. Insurers in public option states would obviously have to offer rates competitive with the public plan or they would lose business. But insurers in opt-out states would also have to offer rates competitive with the public plan because if they didn't, every Democratic politician in the state (not to mention local and national journalists) would highlight the disparity in premiums, and, before long, political pressure would force state politicians to opt back in.
Either way, the public plan will serve its purpose. It will help to control costs.
But there's another benefit to the opt-out proposal that I've yet to hear anyone mention, and it's this: an opt-out public option would--by its very nature--be demonstrably bipartisan. Even if every single Republican member of Congress voted against it (which would not surprise me at all), a number of states with either Republican governors or Republican-controlled legislators would undoubtedly choose not to opt out. The Obama administration and Congressional Democrats would therefore be able to point to these refusals to opt-out as evidence of the bipartisan nature of the bill and the ultra-partisanship of the national GOP. It's pretty hard to paint something as some sort of crazy liberal socialist death plan when GOP politicians all over the country are choosing not to opt out of it. This state-level bipartisanship would, to at least some extent, mute GOP criticism of the bill and make campaigning against it a little more difficult. It would also, I suspect, provide a winning political argument to state Democratic politicians for years to come ("they want to take away your public option; I won't let 'em do that")
Among those who have been fighting the hardest for the inclusion of a public option (and doing a fantastic job, I should add), this proposal has been greeted with a lot of skepticism and even outright scorn.
With all due respect, though, I think these folks may be reflexively dismissing something that could turn out to be as good or better than a full public option.
First, as a purely political matter, this proposal is much more likely to pass than a pure public option. And if you assume that some sort of compromise will be necessary to get sufficient support in the Senate, this is definitely the compromise to make, because it gives up very little. Like Nate Silver, I suspect the vast majority of states would not opt-out. It's one thing for national Republican politicians to preen and posture about death panels and socialized medicine. But at the end the day, states--even very Republican ones--tend not to opt-out of federal programs that provide benefits to their citizens. How many red states have opted out of Medicaid? Or the stimulus bill? The GOP and the insurance companies may be good at scaring people about hypothetical reforms, but it's much harder to convince people that they shouldn't have access to something that their friends and family in the next state over do. State politicians would also be wary of putting businesses in their state at a competitive disadvantage. Any lobbying from the insurance industry in favor of opting out would be counterbalanced by lobbying from businesses who want to have more options for insuring their employees and more competition to keep premiums under control. Ultimately, I doubt all that many state-level Republicans would be clamoring to opt-out of the public option.
So under one very plausible scenario, no states would choose to opt-out (at least for very long) and we'd come away with a robust national public option that's available to everyone.
But suppose a number of the red states do opt out. Would that really be so bad? I don't think so, and here's why. First, it's not as if the citizens in those states would be completely deprived of the benefits of the bill. They would still be protected from denial of coverage for pre-existing conditions. They would still be eligible for the subsidies in the bill for purchasing insurance. And because the majority of states would choose not to opt-out, the citizens of opt-out states would still indirectly benefit from the competitive pressure provided by the national public option. Insurers in public option states would obviously have to offer rates competitive with the public plan or they would lose business. But insurers in opt-out states would also have to offer rates competitive with the public plan because if they didn't, every Democratic politician in the state (not to mention local and national journalists) would highlight the disparity in premiums, and, before long, political pressure would force state politicians to opt back in.
Either way, the public plan will serve its purpose. It will help to control costs.
But there's another benefit to the opt-out proposal that I've yet to hear anyone mention, and it's this: an opt-out public option would--by its very nature--be demonstrably bipartisan. Even if every single Republican member of Congress voted against it (which would not surprise me at all), a number of states with either Republican governors or Republican-controlled legislators would undoubtedly choose not to opt out. The Obama administration and Congressional Democrats would therefore be able to point to these refusals to opt-out as evidence of the bipartisan nature of the bill and the ultra-partisanship of the national GOP. It's pretty hard to paint something as some sort of crazy liberal socialist death plan when GOP politicians all over the country are choosing not to opt out of it. This state-level bipartisanship would, to at least some extent, mute GOP criticism of the bill and make campaigning against it a little more difficult. It would also, I suspect, provide a winning political argument to state Democratic politicians for years to come ("they want to take away your public option; I won't let 'em do that")
I understand the reticence of those who have fought hard for a robust public option to accept anything that is offered as a "compromise" proposal. But I think it would behoove everyone to step back and really consider how this sort of a proposal would likely play out. It may be that, at the end of the day, this is actually a better proposal.
posted by A.L. at 9:06 PM
32 Comments:
A.L.,
It MAY be a better proposal at then end of the day. But that doesn't mean we should take it. Look, on everything from health insurace, to climate change, to detainee reloction, COngresa nd the WH have all talked a really good game, and then caved to Republican positions the instant that any grumblings are heard. This is NOT why we gave them majorities in the House and Senate. This is not why we gave them a President of their own party. We the people did that because we EXPECTED THEM TO LEAD!
Instead we're getting "biprtisanship" in Name Only, because HArry Reid doesn't want to risk a filibuster by memebrs of his own party, much less Republicans. Phooey! Either we have a public option - which makes the insurance companies quake and thus probably resolves much of the challenge - or we don't. If we never draw a line in the sand, we'll never accomplish anything. This is my line.
Not a lawyer, but I suspect that allowing states to opt out of the public option could trigger some conflict with the general welfare clause if it's a true public option w/in HHS or something and not a government-backed co-op.
I don't know of any other welfare programs that states can completely opt out of, although there's some flexibility in how states implement medicare/caid and schip, right?
It sounds like this variant of the public option also embraces state rights over federal rights which used to be important for conservative causes.
I also see this as an alignment of incentivization with responsibility in governance that targets business minded adults.
It sounds, in fact, brilliant. I'm sure I must have the wrong impression here...
@malcontent:
You do have the wrong impression. Staet rights is a convenient rabble rousing cover for modern conservatives. During the Bush 43 years, both the WH and the Republican COngress trashed as many state rights as they could. Current Republican capitol Hill leadership was part of that cabal, and will do the same.
In addition, those same Republicans ar enot "small government" conservatives, nor are the fiscally conservative - as long a sthey get to decide how the $$ is doled out. Thus, they will neither support this option, nor anything else. And as a result, we'll all pay - one way or another.
I prefer that a public option be national, but I see some merit in the state opt-out variant. It's clearly better than a trigger.
The bill would need to be written so that all states are opted-in unless they specifically take action within a certain amount of time to opt out. Once they opt in, they need to be in forever and not have it be on ongoing political game of opting in and out as state politics change. We'd need to clarify how a state would opt out. It should not be on the whim of the Governor, but should it be a vote of the state legislature or a special referendum?
It would be interesting to see how it worked if several red states opted out. It would be a national laboratory of sorts. Perhaps businesses and individuals would start moving out of those states. I'm sure the right wing would portray opting-out as the first step toward secession and start campaigns to opt out of other things (like paying taxes), but who cares. And when most red states do opt in that would be right in the face of the Republican Senators and Congressmen who voted against it.
If we're going to give states choices though, how about a real choice? Let's have a choice to opt in to a single payer, Medicare-for-all plan. Then we'd have a true national laboratory and I'll bet you'd see at least 15 states opting for that and a massive migration of people to live in those states. We would move for sure if NC did not select it!
"How many red states have opted out of Medicaid?"
I may be mistaken on this, but I believe the "opt-out" in Medicaid is conditional on the state instituting its own program that is equal to or better than Medicaid; they cannot merely opt out and not have the program. A red state would not opt out to do its own program but a blue state, such as California with its MediCal program, would do so.
Aren't the people in red states generally less healthy than those in blue states? I believe so. That would make the public option even more competitive!
To me, opt-out seems a tactical, practical, and political check-mate, for all the reasons A.L. points out.
My only question is, is the idea that Opt-out will appeal to republican and "moderate" democratic legislators - IOW, is it designed to get 60 votes - or does it represent a quasi-bi-partisan appeasement that will make reconciliation more politically stomachable in the long run, since we aren't actually forcing anything or anyone?
"Either way, the public plan will serve its purpose. It will help to control costs."
not exactly medical costs though. The option only provides competition to health insurance, with an expected decrease in premium rates.
actual medical costs also need to come down, but for that we really do need to encourage people who are dying to embrace death and not ring up $400,000 in expenses in the last two months of life.
@Philip H.
All the more reason to adopt the rhetoric. Everyone knows at some level that the GOP only cares about holding power and speaking like blowhards.
Steal their narrative.
Did you guys see this one?
http://www.huffingtonpost.com/2009/10/08/cigna-employee-flips-off_n_314189.html
as if private insurers needed more bad press. How insulting it must've been for that mother to receive that apology from CIGNA. "sorry one of our employees gave you the finger, but we're certainly not sorry we denied your child a life-saving operation to save money!" a few more stories like this and the American Public will be voting to model our healthcare after the CHA in no time. Just another example of the callous, inhumane treatment people receive under our current healthcare system. when the chips are down, share price matters alot more than your sick family member. disgusting.
"actual medical costs also need to come down, but for that we really do need to encourage people who are dying to embrace death and not ring up $400,000 in expenses in the last two months of life."
You're off message there Joe. Wait until the health care bill passes before you start telling people to embrace death.
As an aside to mls, I'm pretty sure (from my reading of what he said) that Joe agrees with you and was being ironic. Ironic or serious, he's wrong.
More on the point, I have to disagree a bit with AL. I live in one of those 'red states.' I don't feel comfortable giving my state legislature the choice of whether or not I have full access to all the options presented by health care reform. I run my own very small business and would be required to purchase private insurance. I really want the availability of the public option, so I can consider it even if something else looks better to me in the end.
That's the right of the consumer in a capitalist economy, no?
The problem with deciding to forego expensive medical treatment if you are just going to die anyway is that what passes for medical science isn't advanced enough to give you the knowledge, in most cases.
If they offered you a choice at living with a cost of 400K versus dying at a cost of 20K (hey, nothing's free, in this marvelous capitalist society of ours), which would you choose, Joe? MLS?
But they don't. Instead, if you have enough money, you can go to Tennessee, or Indiana, and get a new organ, and outlive all the averages, like Steve Jobs. Otherwise, you die. It's an odd thing, but the people who object to spending the money to let poor people live a little longer (and perhaps much longer) strenuously insist that poor women, when they discover they are pregnant, pay whatever it takes, in health, in lost opportunity, in social denigration, to care for another person.
Oh, and Eclectic Radical? it's your responsibility, in the end, to vote for people who will put your interests ahead of loyalty to a failed ideology or to the mythical sky-god. Not ours.
My personal feeling is that the primary purpose of government is to give everyone the opportunity for life, liberty, and the pursuit of happiness. If a person, or group of people, wishes to spurn the opportunity, that's not my lookout, beyond pointing out how stupid that is.
I like the option plan.
Anyone who wants to live in a state with a public option already has a choice. They can move to Massachusetts. I haven’t heard of a rush of new Massachusetts residents, though. Alternatively, people could urge their state representatives to adopt the Massachusetts plan.
The honest answer to your question, C2, has to be “it depends.” What are the odds that the $400,000 treatment will work? If it works, how long will it extend my life? What will be the quality of my life during that time? What will my family have to do without if I spend the $400,000?
Of course, if the $400,000 were coming out of your pocket, rather than mine, the question would be a lot easier to answer.
MLS,
If you expect doctors to give you accurate odds, you are ignorant of the medical profession.
Pretending that someone made the suggestion that people should move for the sake of health care so that you could claim we already have that choice is a strawman argument. It's also dishonest, as there isn't enough room or employment for all of us in Massachussets, and you know it.
Since few of us have the money to blow 400K of our own money on health care, we are obviously talking in any case about insurance paying for the treatment -- in which case it's going to come out of everybody's pocket. That remains true if it is private insurance, the pockets belonging in that case to either the underwriters or, much more probably, the people who will pay premiums in the future.
What will my family have to do without if I spend the $400,000?
I know what my family would have to do without. After selling our home and business and everything but the clothes on our backs, we would have nowhere near that amount. So I guess they would have to do without me, wouldn't they?
Of course, if the $400,000 were coming out of your pocket, rather than mine, the question would be a lot easier to answer.
So I take it you don't have auto insurance, home owner's insurance, life insurance etc. because you would rather pay for any various emergencies out of your own pocket rather than make other policy holders contribute?
Anyone who wants to live in a state with a public option already has a choice. They can move to Massachusetts.
That's your solution? Love it or leave it?
Alternatively, people could urge their state representatives to adopt the Massachusetts plan..
Um… that's kinda what we're trying to do now.
'Oh, and Eclectic Radical? it's your responsibility, in the end, to vote for people who will put your interests ahead of loyalty to a failed ideology or to the mythical sky-god. Not ours.'
Read my comments (here and elsewhere) and my blog. Do you think I'm voting for Republicans?
Statistics, however, can be a brutal thing. Sullivan County, TN voted for John McCain over Barack Obama 68% to 21%. I cast my vote, I was definitely one of the 21%. I'm not staying home on election day. My vote just doesn't mean much in my district given its overall demographics.
CH, when you start talking about 'personal responsibility' in situations where there is little or no personal control to give that responsibility meaning, you start to sound like a Republican.
Letting state governments block the public option if they wish is not fundamentally different from leaving the public option off the table. If it's the best compromise one can get, it's not worth it unless the GOP is giving up something really big. Last I heard, they weren't ready to concede anything.
Eclectic Radical,
Sorry, but letting states opt out of a public option, while giving the rest of us the reform, is fundamentally different from leaving the public option off the table.
What the GOP, probably in the person of a senator from Maine, is going to give up is the future support of the hardliners in her state, so don't say there's no concession.
If the opt-out option is what gets a bill through Congress, I'll accept the result with serenity, sparing only a little pity for the benighted states. After 2000, when these same benighted states gave us Dubya, I stopped caring very much about Republicans, since they obviously didn't care about the rest of us. After that point, my heart just couldn't go out like it did before to places like Texas or Wyoming.
Also, don't forget that, if savings from all this do occur, there will be small children of insurance company employees who won't be getting something over the top for Christmas.
I give to various liberal-supporting groups, some of which are engaged in outreach and civilization efforts in the benighted regions. It's far more than the least I could do, but there's a limit to both my pity and my ability to help.
"Either way, the public plan will serve its purpose. It will help to control costs."
The purpose of the public plan is to make sure every one gets covered. The goal is to protect the health and well being of everyone. Just about any mechanism that includes everyone will bring down costs, as long as it takes insurers out of the chain.
The purpose of the public plan is to make sure every one gets covered. The goal is to protect the health and well being of everyone. Just about any mechanism that includes everyone will bring down costs, as long as it takes insurers out of the chain.
Actually, no. Getting everyone covered is accomplished through the mandate and accompanying subsidies, which would apply in all states, including the opt-out ones. The only purpose of the public plan is to provide competition, thereby keeping premiums under control. As long as the public option does that, it's working, even if folks in opt-out states can't buy it. They'll still be benefiting by the competition.
MLS,
You clearly don't understand how the Massachusetts plan works. There is nothing in the plan that is remotely similar to a robust public option.
Indeed, the states simply don't have the power to create anything remotely comparable to what's being proposed at the national level right now.
Moreover, most states aren't in a position to do what Massachusetts did. Massachusetts is one of the highest incoming earning states in the country and it had a relatively small number of uninsured.
Individual states don't have the resources or the clout to fix the system and start to get costs under control. Reform has to be done at the federal level.
I have no problem with allowing states to opt-out of the public option (for the reasons stated above), but the rest of the reforms have to be nationwide.
AL- my understanding is that there is a public option in Massachusetts, though it may not be open to everyone (and thus not “robust” enough for you). Nevertheless, the Massachusetts plan is similar to, and perhaps somewhat to the left of, what is likely to be produced by Congress.
You claim to be fact and evidence driven, but you seem to ignore all the facts and evidence that don’t favor your position. You say that states haven’t been able to reduce costs because they lack the “clout” to do so. But the federal government runs Medicare, which doesn’t seem to be able to reduce health care costs either. Maybe expanding Medicare to cover everyone would somehow make the system more efficient and bring costs down. But you should also consider the possibility that health care will not become the first industry in history to be made more efficient and cost-effective by turning it over to the government.
MLS,
Why do you assume that, if Medicare hadn't been established, the cost of healthcare would be no higher than it is now?
After all, Medicare typically reimburses at about 2/3 the amount for other insurers. In fact, when Congress tried to use Medicare to reduce the payment levels still further, the providers successfully fought it on the basis that they'd all stop providing services, and it was dropped.
If you ask providers, they'll tell you that they don't make their money on Medicare patients. (Oh, sure, some fraudsters make money for a while, until they're caught. Then they go on to become organizers against health care reform.)
In fact, one of the reasons health care costs so much is because providers recoup their lack of profit from Medicare by charging the rest of us more.
If you are asking why Medicare isn't solvent, that's another question, involving the discrepancy between the taxes we pay to fund Medicare and the number of recipients.
MLS,
You claim I'm somehow ignorant of relevant facts, but you don't say what those facts are. I assure you that I have studied health care policy extensively and have read just about all the relevant literature. There's been a lot written about why health care reform is unlikely to be successful on a state level, and I'd encourage you to go read it. I don't have nearly the time to recreate it all in this comment thread.
Suffice it to say, while there are many parallels between what Massachusetts has done and what Democrats are trying to do on a national level (mandate, subsidies, etc.), the public option is not one of them. The Massachusetts system is complex, but in a nutshell, the public option is very limited and isn't really public (it buys coverage from private companies). It exists to facilitate the purchase of insurance, not to compete or drive down prices. And that's understandable. No single state could hope to do that on its own.
Your comments about Medicare reveal that you don't really understand the legislation currently being proposed, which contains a whole host of measures designed to contain costs for Medicare. Ultimately, most people agree that Medicare's fee for service model needs to be adjusted. But Medicare does at least as good a job as the private sector of containing costs and is way more efficient. Moreover, the point of the public option is merely to provide competition. People will pay premiums for the public plan and if it doesn't provide better bang for your buck, people won't choose it.
Finally, one of the reasons Medicare doesn't contain costs across the system is because of its limitations. First, most of the population is ineligible. Second, when it comes to things like prescription drugs, the GOP made sure that Medicare lacked the ability to bargain for prices. Democrats want to get rid of that restriction.
Your last snarky comment about this being the first time in history that government was more efficient than the private section just shows your general ignorance on this subject. Virtually every other industrialized country has a government-run systems and they all, without exception, are much WAY more efficient than our system. They spend far less per capita on health costs and get just as good results (often much better).
C2- I infer from your question that when you talk about the “cost” of healthcare, you are referring to the price at which particular services or treatments are provided. That is not what most people mean when they talk about healthcare costs being too high. Instead, they are referring to the aggregate amount of spending on healthcare, either by person or as a share of GDP.
It’s a fair question to ask how we “know” that these numbers are “too high,” either for Medicare or for the healthcare system as a whole. As I understand it, this conclusion is based on the following facts: (1) our healthcare costs are significantly higher than those of other countries, (2) healthcare costs have been rising rapidly as a share of GDP and (3) there are great disparities among costs in different areas of the country, suggesting that there the higher cost areas have wasteful and inefficient practices.
My point with regard to Medicare is that all these factors apply equally, perhaps even more, to Medicare as to the private healthcare system. For example, when the Presidents Council of Economic Advisors came up with an estimate of how much waste and inefficiency was in the health care system as a whole, it based it on a study of disparities among Medicare expenditures. This suggests to me that there is no particular reason to believe that our health care cost problem will be solved by greater involvement of the government in the health care system.
AL argues, however, that the healthcare reform bills being proposed have a “host of measures designed to control costs for Medicare.” These measures consist largely of directives to reduce the rates of reimbursement for providers of medical goods and services. Congress routinely waives these kinds of reductions (I seem to recall Obama attacking McCain during the campaign for allegedly opposing a bill to do just that) so I am skeptical that these reductions will actually take place.
Assuming that the government really did adhere to across the board cuts in reimbursement, how would this affect the health care system? It’s a good question, one that I have not heard discussed during the health care debate. As you note, Medicare already reimburses providers at a lower rate than does the private sector. It is often said that the private sector is subsidizing Medicare by paying “artificially” higher rates to make up for Medicare’s below cost rates. Frankly, this doesn’t make a lot of sense to me. I would assume that the insurance companies want to pay as low rates as they can, and that they are not going to subsidize Medicare out of the goodness of their hearts. One would think that the greater the disparity between Medicare and private rates, the greater the incentive for providers to serve only patients with private insurance.
As for your suggestion that the problem with health care costs is that prices are “too high” (ie, doctors, hospitals, and manufacturers of various medical goods are making “excess profits”), this is another issue that I haven’t heard discussed much. Part of the reason may be political. Since all of the affected interests, except insurers, are supporting reform, it is not surprising that reformers are only talking about the “greed” or “excessive profits” of the insurance companies. By the same token, it seems unlikely that these interests would be supporting reform if they thought that it was going to significantly reduce their profits. To take the one example cited by AL, you don’t hear much about “overcharging” by the drug companies in the current debate. This is due to the fact that the drug companies already cut a deal with the Obama Administration (which precludes Medicare from bargaining for lower drug prices, by the way).
As a general matter, I am skeptical of the idea that excessive health care costs are caused by prices being too high or various interests in the health care system making too much money. Unless the government sets the price by fiat, the price of goods and services is going to be set by supply and demand. If you think prices are “too high” (whatever that means), the solution is to increase supply or reduce demand.
(I would note that even if the government were able to reduce health care prices by its say so, I am not so sure this would be a good thing. Would you want a heart surgeon who was paid the same as a public school teacher?)
As I see it, the cost problem in the health care system is not prices per se, but the fact that our system encourages wasteful and inefficient overconsumption of health care (of course, higher demand means higher prices). In fact, both sides of the health care debate seem to agree on this point. However, the reform bills under consideration do nothing to encourage more rational consumption of health care (ie, by ensuring that patients have an economic incentive not to overconsume health care), but merely exacerbate the cost shifting that is at the root of the existing problem.
AL would argue, I suppose, that the public option is going to help solve this problem by putting competitive pressure on insurance premiums. But insurance company profits are, at most, a small part of the health care cost problem, as illustrated by Medicare and non-profit insurance companies. I am not against a public option if it were part of a market based reform of the health care system, but it is not going to do anything to solve the real cost problem.
MLS,
Let's try, so far as possible, to distinguish between cause and effect. Whether you mean the cost to individuals, in aggregate, or the percentage of GDP used in paying for healthcare, (and I'd wager a fair amount that what the vast majority mean is the former -- which of course is highly correlated with the latter, so it's a moot issue), this is the effect of the system we have, not a factor (unless you are using some unusual definition of the term).
Actually, Medicare expenditures were used to indicate differences between the cost in different locales because Medicare is a constant -- not because Medicare or the lack of it is an issue.
If you want to look at whether Medicare reduces or increases the cost of healthcare, you have to compare places where it is present with places where it is absent, all other things being equal. Good luck with that.
Teachers are enormously more likely to be paid by the state than heart surgeons are. Are you trying to say we should socialize medicine to cut costs? Or are you trying to say we should privatize all education in order to drive up teacher salaries to make things more fair?
As for why providers would accept Medicare patients at a lower rate, remember that, at most places, doctors share in the total income. They will only decline patients if it costs them more than they make, which, obviously, is not the case. Sure, they could make more from privately insured or uninsured (but wealthy) patients, but that assumes there are enough of those, which is generally not the case. One of the characteristics of our system is that there is a huge oversupply of providers, artificially jacked up by the for-profit system we have.
I have no idea what you mean by "artificially" high rates. Any rate could be considered "artificially high" if it's more than the cost -- but when the cost includes inflated salaries, inflated cost for supplies, inflated cost for multiple specialists, what does that mean?
Medicare gets its low rates by having the weight, where Congress allows it, of the federal government. Make no mistake about it, however: the providers, if they are at all efficient in their operation, make money on Medicare patients. They just make more on the rest of us.
Apparently, you don't read the economic analysts about why health care costs do not obey the usual laws of supply and demand. Perhaps, rather than criticizing A.L. for ignoring data that disagrees with him, you should acquaint yourself with any of the excellent analyses that have conclusively demonstrated and explained this.
Actually, a public option, with a uniform and scientific approach to recommended procedures and treatments will bring down costs -- and that is a part of the reform bills being considered, so you are factually incorrect in saying that the current bills don't do anything to contain costs.
MLS, your latest set of comments reflects a number of misconceptions of basic facts of the debate. For instance, the proposal currently on the table would reduce Medicare costs in a number of ways, none of which involve across the board cuts to reimbursement rates. First, wasteful boondoggles like Medicare Advantage would be eliminated (all MA does is pay private insurers a mark up to provide exactly what Medicare does). Second, the body that currently provides recommendations re: rates (and is routinely ignored by Congress) would actually be empowered to implement their recommendations. It is imperative with a fee-for-service model that reimbursement rates be continually tweeked to encourage efficient use of tests/procedures/practices and discourage ineffective or inefficient ones. A major part of the health care cost problem in this country is that our system (both public and private) encourages wasteful overuse of diagnostic tests. There is a lot of money to be saved by encouraging better practices.
As for your suggestion that the way to fix the cost problem is to "ensure that patients have an economic incentive not to overconsume health care," you couldn't possibly be more wrong. This is classic Republican/libertarian idiocy that just ignores all of the most basic realities of health care. First, when you create such incentives, people respond by not getting routine and preventative care (because they can save money by not doing so). The end result is that health care costs go up (and health outcomes go down) because conditions aren't detected or treated in a timely way and become more expensive and medically problematic to treat.
Moreover, because most people are not doctors, they have no idea what treatment or tests they really need. Do you know what kind of tests you need? Do you know what kind of procedures you need? Of course not. That's why we have doctors. Most people will never have the knowledge necessary to do a proper cost/benefit analysis of the tests and procedures available to them. Health care is not and will never be like shopping for groceries or clothes. If you want to control costs, the only intelligent way to do it is to play around with the incentives of doctors, not patients. You have to create a system where doctors don't have a profit incentive to do unnecessary tests and procedures. Yet Republicans are never willing to grapple with this obvious reality in their health care proposals. They pretends, as you do, that it somehow makes sense to have patients making all of these decisions. But it makes no sense at all and actually results in higher costs to do it that way.
As a general matter, I am skeptical of the idea that excessive health care costs are caused by prices being too high or various interests in the health care system making too much money.
Are you skeptical of the long lines of people who show up at free weekend clinics around the country, many of whom have insurance but can't afford to see a doctor? Are you skeptical about "Dollar" Bill Maguire making over 1.5 billion in compensation and bonuses for overseeing UHG?
As I see it, the cost problem in the health care system is not prices per se, but the fact that our system encourages wasteful and inefficient overconsumption of health care (of course, higher demand means higher prices).
Health care costs are rising faster than inflation (and more important, real wages) while more people are going without treatment and medication (and a growing number are dying because of it). Pray tell… what further incentives would you add to decrease the demand of this irrational consumption?
But insurance company profits are, at most, a small part of the health care cost problem, as illustrated by Medicare and non-profit insurance companies.
In all your posts, you reduce the problem with health care to one of cost. And in your book, the insurance companies are just reacting to the ebb and flow of the market like any other business. It's up to the individual to find an affordable policy (or employment if he can't), find a doctor who is priced right, determine what tests are needed, shop around for economical medical care when he is injured and so on.
The free market, supply and demand, will determine the cost and availability. That's the system we have now. And right now, an unemployed, uninsured, single mother of a child with a serious illness will not get the same care that a family with $400,000 of disposable income will get. That's the real problem and it goes far beyond cost.
One of the supply side issues that must be addressed is the supply of doctors. As long as med students are having to borrow tens and/or hundreds of thousands of dollars to become doctors there will be strong upward pressure on health care costs and fewer students interested in going into the less glamorous fields of practice such as family or general practice. When you look at other countries that provide health care for all, their doctors make good money (upper middle class) but they are not getting rich. However, their education costs are much less than in the US. If we think in terms of return on investment then our doctors have to make more to recoup their than doctors of other countries.
Of course, this is only one part of the issue but I don't believe it is insignificant and I have not heard it discussed.
Nice article, but I want to add that the first person I heard mention an "opt out" clause/amendment/etc. was Dennis Kucinich.
http://samsedershow.com/node/5224 has a few details if anyone is interested.
You mention "Red" states opting out because of their usual "death panels/omg socialisms/etc." objections, but I seriously doubt any Republicans lacking Bachmann/Beck-level mental illness take those things seriously and actually just wanted to kiss a little teabagger ass.
It's just as likely (and far more positive in the long run) that "Blue" states will decide to forgo the Baucus Blue Cross Bailout and come up with a legitimate plan of their own that resembles a REAL Medicare-for-all/single payer/etc. overhaul of the current plutocratic system.
Remember, Canada's system started in Saskatchewan and then went national when people saw how superior it was to a privatized extortion racket.
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