Health Care Reform? Nothing Short of the Public Plan Will Do For the Public
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I support the Public Plan for Health Care Reform and I am not backing down and I am not shutting up. I am in good company because between 72% and 83% of the public want a Public Plan for Health Care Reform. Is Congress listening? Does President Obama understand what is stake here? I am not sure they do. I smell cigar smoke and inurnace industry lobyyists in suits lighting them with $100 bills.
Why would I write about health care on a Blog that comes under the banner - Injury Board? Aren't we all here at Injury Board to promote our law firms and to get cases? Isn't this a lawyer marketing activity?
Well the answer is "no" and "yes". Tom Young and Nick Carroll created Injury Board to allow lawyers to "do well by doing good". And attorneys like myself, Steve Lombardi, Mike Bryant, David Mittleman, Greg Cusimano and Michael Ferrara are active in the Blogosphere as members of our communities, part of the public voice, small business people and attorneys who care about justice. How does health care reform fit into this picture? I will not get a case because of this Blog post but the subject matters to me and to the people in the State of Hawaii and in my hometown, Honolulu. So here goes.
In his article entitled No Compromise on the Public Plan!: Why Weakening the Public Option Would Weaken the Party Responsible - Phillip Cryan explains why the alternatives to a public plan are bad news for the people who need health care reform - the public.
Phillip Cryan
Why are all the alternatives to a robust public plan now being floated in the health care reform debate – cooperatives, state or regional plans, a “trigger” for the public plan, a public plan prohibited from bargaining with drug companies – such profoundly bad ideas?
For one simple reason: they would fail to rein in health care costs’ out-of-control growth rate.
And the effects of such a failure would very likely include not just unsustainable public budgets and the eventual collapse of universal health coverage but political calamity for the party that made the reform.
After hope was raised to an all-time high in the public heart on the day of President Obama's inauguration, conservative democrats (Republicats) have represented the interests of Big Pharma, Big Insurance and Big Doctors to sell out the idea of health care reform and replace it with a sham that is called Health Care Reform but in fact is little more than business as usual with the fat cats and CFO's and insiders in major corporations and rich doctors getting their way with money and politics.
What do the conservative Democrats want? They want health care reform that keeps the insurance companies in control of your life:
Any concessions made to those Democrats – and to the handful of Republicans still playing nice, just as long as health reform doesn’t bother the insurance industry – on the public plan will prove extraordinarily costly down the road. The cost would be measured first in dollars – as suggested in my previous posts in this series (here, here, and here) – and later in votes.
The other articles he cites are a great explanation of the "sting" that the insiders are trying to lay on the public.
Carey's scholarly articles point to the crux of the the need for a Public Plan, not an Insurance Plan:
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If we do not significantly reduce the current rate of health care cost growth, we are in deep trouble as a country. President Obama has been both eloquent and insistent on this point since the debate over health care reform began. “The long-term fiscal balance of the United States will be determined primarily by the future rate of growth of health care costs,” in Office of Management and Budget (OMB) director Peter Orszag’s neat summation.
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The rate of health care cost growth stops looking so strange and unexpected as soon as you take a serious look at the extent of consolidation and the lack of competition in most of the country’s health insurance and health care provider markets. Given the extent of concentration in those markets, extreme rates of health care cost growth – with nothing to be shown for them, in terms of better outcomes for health care consumers – become expected, normal. In short: why would anyone expect oligopolist insurers and oligopolist providers to restrain prices, without effective pressure from the purchasers of insurance.
In America we know that competition is the key to a fair business climate. In Hawaii we had only one inter-island airline for a while. No competition meant price gouging and we had no choice but to pay. The insurance industry is not subject to anti-trust laws and those are laws that focus on maintaining adequate competition in American business.
Carey cites real studies that show that "most health insurance and health care provider markets are deeply uncompetitive." And "no", regulating the health insurance industry will not work.
Full-fledged competition – i.e., the kind most people have in mind when they hear the word “competition,” the almost magical efficiency-generating kind economists rhapsodize about – in health insurance markets simply is not possible.
Why? Carey explains:
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There are significant economies of scale in the provision of insurance, including the simple fact that risk pooling works best when the pools are large;
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The costs of entry into a health insurance market are very high;
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It is hard to imagine what a viable, desirable substitute product for health insurance could be, to introduce competition from outside; and
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“Health care markets remain and will likely forever be local,” making a significant degree of concentration in all small- to medium-sized local insurance markets inevitable.
Not only is the health care insurance industry not competitive bu there is an extreme concentration among health care providers.
Insurance companies stand between the public and the small businesses that buy their health insurance and the medical profession. The public gets crushed in that three party transaction. The public has no bargaining power and in fact isn't even at the bargaining table when it comes to health care. We stand in line at the pharmacy at our local drug store and in the crowded waiting rooms at our doctors' offices. We show our insurance cards and we pay with our credit cards. Each year they dictate to us what we get and what we don't get. Our heads spin with co-payments, deductibles, premiums and rules that are created by the CFO's of the health insurance company or the HMO, not by someone with a medical degree who obeys the Hippocratic Oath. Why would the insurers ever do anything other than strike deals with the providers (which raise prices for us health care consumers), given the lack of competition in both provider and insurance markets?
The solution? Give consumers some bargaining power. Am I crazy or is that what America and Conservative politics is supposed to be all about?!
How is that done? A Public Plan for Health Care Reform. Nothing less than a Public Plan. Watch out for the spin doctors and the politicians. If the word "insurance" is a part of a plan that floats by your door, put it immediately in the wastebasket. Tell Congress that you are smarter than they think. Tell them that you are watching them and that you are tired of insurance company suits sitting in their offices and feeding their campaign bank accounts.
I am not afraid of a government run plan. I live in a democracy where government can be good. I like government a lot more than I like _ or trust _ AIG, General Motors, Wall Street, Enron, Madoff and their ilk. Carey also gives facts that support a government run plan:
“The administrative efficiencies of government-run health insurance plans” – their dramatically lower overhead, compared to private insurers – and “the purchasing power of government to control costs” would be combined, in such a public plan, to introduce a degree of competition on price that is currently absent from oligopolistic insurer and provider markets. Regional or state-based public plans, cooperatives, and all the other compromise options on the table simply would not have the level of bargaining power required to eliminate waste and restrain cost growth. Without a robust public plan to compete with private insurers “we will continue to lack strong institutional mechanisms to rein in costs and drive value down the road, putting the broader goals of reform and our nation's public and private budgets at risk.” “The power of a large purchaser motivated to contain costs is needed to control rising health care expenditures,” note the Urban Institute’s John Holahan and Linda Blumberg.
What does the public want?
72% support a government-administered public plan, according to a recent New York Times/CBS News poll. The Employee Benefits Research Institute – a group funded by the likes of JPMorganChase, Wal-Mart, General Dynamics, Morgan Stanley, Blue Cross Blue Shield, CIGNA, and United Health – found 83% in support of the public plan option.
The insurance industry is spending millions to scare us into thinking this is communism and that it won't work. Of course they are because they want to keep those billions of dollars of bonuses for ripping off the public. As long as they are in the chicken coop you can bet that the public will continue to be losers in health care.
Phillip Cryan received his Masters degree in Public Policy from the University of California, Berkeley’s Goldman School in May 2009. His report on the expected effects on employment from adoption of a “play-or-pay” employer contribution policy for health care was published by the Institute for America’s Future and the Economic Policy Institute in June.