Health Reform: Look How Far We've Come. Now Where the Heck Are We?

The public option is dead: Long live the public option.

Wait. Maybe it is dead. The rocky road to health reform is likely to induce severe mood swings, considering the elation after Harry Reid's announcement yesterday and the gloom after Joe Lieberman's threatened defection today. Maybe the health reform process needs a sign like the ones carnivals put up over the Tilt-a-Wheel: "Must be this tall to ride this attraction."

The public policy option presented by Harry Reid may not meet the consensual definition of "robust," but it isn't the opposite of robust either. We'll need another adjective to describe it if it passes: Hale? Stout? "Ruggedly mild with a hint of oak in the aftertaste?" But while they're working on terminology, Democrats should be mapping their course of action should Sen. Reid succeed. Much of the work will begin, not end, when and if this bill passes.

Putting Sen. Lieberman aside for a moment (and who wouldn't want to?), what can we expect to see if the final health reform bill conforms to Sen. Reid's outline? The crystal ball is somewhat murky, since some of the most critical features of the bill aren't fleshed out yet. But we know that progressives are counting on the public option to be a check on insurance industry abuses, and to slow down the health care cost spiral.

Maybe, maybe not. The public option will only impact the system globally if it has clout (which comes from volume), cost savings, and an attractive package of benefits. How likely is that under the proposed Senate bill? Here's what we can surmise so far:

The opt-out: I was surprised at the anger my last post on opt-outs provoked in some progressives. "Ideological rigidity," said some. I still think the opt-out weakens an already-compromised public option, and that it clashes with some of the moral rhetoric from Democrats. But, as I wrote at the time, "Is a 60-vote, non-reconciliation outcome in the Senate worth (it)? Maybe in the end the answer will be 'yes,' but that question should only be posed after all other options have failed."

Well, apparently they've failed. Now the opt-out is looking like a shrewd tactical move, and let's hope it succeeds. But every such tactical reduction reduces the public option's ability to effect system-wide change. That's not ideology, it's common sense.

A number of people expressed great skepticism when I said that a number of states would exercise the opt-out provision if it were enacted. Now, two short weeks later, even the Democratic candidate in the Virginia governor's race is suggesting he'll opt out if elected. So a public plan that was forecast to win 5% of the expanded insurance market is now likely to gain something less than that.

What will the final number be - 4%? 3%? We don't know. But those progressives who are waxing euphoric need to come back down to earth. Their mission, should this bill pass, will be to keep the number of state defections as low as possible. They can't do that by repeating the old mantra, "People would never be so foolish ..." After all, they said that during the 2004 election, too. Campaigning against opt-outs will be Job #1 if this bill passes. If that happens, then, to paraphrase Joe Hill: "Don't celebrate, organize."

Medicare rates: The Reid plan isn't technically "robust," because it doesn't tie public option doctor/hospital reimbursements to Medicare rates. Again, that may be smart politics - but it weakens the PO's cost-competitiveness. This is a complex issue, but the bottom line is this: If the public option has to negotiate its own rates with health providers, and it's only likely to get an average of 5% in any given market, it's not going to have a lot of clout to get favorable pricing. Sure, it will save on marketing costs, but so will any other insurance plan in the exchange. So how much of a cost-check is it going to be?

To make matters more complicated: If a public option is tied to Medicare rates, that might cause more doctors to drop out (or "opt out") of Medicare. That could create an access problem. But that issue could be managed by giving the public option the flexibility to make exceptions in its rate structure by region and/or type of provider.

Mandates again: There's talk of easing the employer mandate, while keeping the individual mandate. That could get tricky, because it could shift a greater portion of the cost back onto working families. And mandating the purchase of private insurance in states without the public option could be unpopular.

Paul Krugman may be overly sanguine about the likelihood that health reform will be well-received after (or if) it's implemented. Those polls showing that the Massachusetts reform is popular among doctors are not surprising, since they benefit when more people have insurance. The fact that only 2.6% of that state's residents remain uninsured sounds good, but that figure was 5.7% before reform. So they've cut their uninsured problem by slightly more than half (55%). Similar results nationwide would leave more than 20 million Americans uninsured (assuming 47 million now), which could be politically unpopular.

And while one poll shows that only 11% of Massachusetts residents polled would repeal reform, that's in a state that lacks the rampant right-wing extremism we see nationally. Other polls there have shown that most people personally affected by the state's reforms are unhappy with them. On the national level, these disaffected people may well turn out to be swing voters, especially after the Media Noise Machine has worked on them.

Benefits Design, Insurance Exchanges, and Cherry-Picking: As Professor Krugman points out, Massachusetts has been proactive in mandating benefits design, showing a level of political will that may be absent on the national stage. If the insurance exchanges do not mandate a decent level of coverage, families who pay those large insurance premiums may still face financial disaster should a major injury or illness take place.

In states where the public option provides more generous benefits than private carriers do, the end result may well be what the insurance industry calls "cherry-picking." That's what health plans do when they design their benefits and administer their plans in ways that make life especially difficult for those who need more care, or who are more likely to need it in the near future. If insurance exchanges aren't given the tools to manage the cherry-picking problem, the public option could become a toxic waste site where for-profit carriers dump the sick and needy. The end result could be a public option that actually costs more than private insurance.

The Keyword is 'Evolution': So, do I dislike the Reid bill? Not at all. I suspect it's the best we're going to get, and we'll be lucky if we do get it. As I've confessed before, I've consulted for health insurers in the past (as well as employers, unions, foundations, tech companies, and others - which I do more often). Part of that job is to point out all the bad things that could happen, so that people can plan accordingly. Each of the above problems can be addressed, but only with awareness and forethought.

The keyword in this planning process is 'evolution.' If a watered-down plan is all we can get - and it looks like it is - it's wise to design it so that it can evolve toward a better system in the future. The public option is one way to do that, by forcing insurers to lower costs or lose market share. Lawmakers are right when they point out that, as it's now designed, it's not the most significant part of the program. But if it's there, and we don't eviscerate its cost-saving potential, it can be a powerful lever for future change.

We're likely to see continued voter dissatisfaction after this bill is passed. That can be a good thing, if mechanisms have been put in place that permit quick response to those dissatisfactions when they arise. That's a good reason to support the Wyden Amendment, which would allow anyone to elect the public option. It's also an argument for improved regulation of insurance company benefits, and for retaining the option of using Medicare rates at some point in the future.

As for how to handle Sen. Lieberman - hey, I wish I knew.

RJ Eskow blogs when he can at:

A Night Light
The Sentinel Effect: Healthcare Blog

Website: Eskow and Associates

 

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Comments

[Mike182]

Typical Congress let's pass a watered-down reform bill without any meaningful change and then hope it "evolves" into what it should of been all along. Like polishing a lump of coal every day hoping at some point it becomes a diamond. I have no faith in our government to do anything right by it's people. This bill will be a gift to the insurance companies when it is all said and done. We'll be forced via mandate to carry insurance and there will be nothing to protect us from being price gouged as our premiums are continually raised in the name of protecting corporate profits. Without a robust public option, there is nothing in the bills to hold premiums in check. Insurers will want more money up front through premiums and higher deductibles to off-set any changes that may negatively impact their bottom lines. Once again the middle-class gets screwed. Too much money to qualify for medical assistance, too little money to easily afford health coverage. These bills do nothing to help us. Nothing.

[TheMediaRanger]

Dynamite piece, RJ. Thanks for pulling me out of the blue funk I was in from Lieberman to the last word of this proposed wet rag of a bill. BBBLLLECH!

When I step back and think about it, though, I know it's how these things work. Dems can come away and say they got 90% of the deal, which is a lot better than the other guys. Across the aisle, they can say they got a garbage bill jammed down their throats, but refused to let go of that last little chunk of business-as-usual. And the president can say "Glad you folks could come to an agreement," so he doesn't have to play Master of the Universe. It's historic and it'll have his name on it, regardless of how many bodies litter the Capitol steps.

So in sum, I'll be disappointed if the bill isn't more "robust." But either way, I agree it's a good idea to support the Wyden amendment, and for people to lean on President Obama in the hope he can nudge people in that direction too.

[Guitarsandmore]

Good post R.J.

“As for how to handle Sen. Lieberman - hey, I wish I knew.”

Lieberman should lose his chairmanship and his ability to caucus with the democrats. Lieberman has become a right wing Republican on every issue I can think of. He does not support the president or the Democratic party. The democratic leadership should deny Lieberman any chairmanship and the right to participate on any committee.

Connecticut should impeach Lieberman on the basis that he has perpetrated a fraud on the people he was elected to represent. Lieberman continues to align himself with the interests of corporate health care while 60 % of his constituents when asked say they favor a public option.

[LHB58]

The only way the market for Health Care in the U.S. could have gotten this nonsensically complicated is if every part of it was deliberately designed, piece by piece, to redistribute income from a relatively ignorant, politically unconnected part of the population, to well connected, health care industry insiders. Absolutely insane!

[Eggsackley]

In my prior comment I meant to say I hope the Reid plan is NOT the best we can get.

[Eggsackley]

I certainly hope that the Reid Plan is the best that we can get. The right of states to opt our is incompatible with any mandate requiring uninsured persons to get insurance. In states that opt out they will have to pay excessive amounts to get insurance, and the insurers in those states would continue to rake in excess profits. I would certainly hope that the House would not accept any such nonsense. The only way that a state opt out provision would be acceptable, would be to provide that uninsured persons in those states could buy insurance in any state that has a public option.
I do have a question about the opt out provision. Would a state governor be able to exercise that option, or would it have to be exercised by legislation?

[Promote]

Proverbs 17:23 . A Wiicked Man Receives a Bribe From The Bosom To Pervert The Ways Of Justice .

[yelrap]

YOU DO NO HAVE TO WAIT FOR PUBLIC HEALTH CARE. GO AHEAD AND FILL OUT THE PAPERWORK, GET IT APPROVED, TAKE IT TO CANADA AND STAY THERE

[wrabbitt]

We have not come very far, lobbyists still control our destiny, and a bunch of old men who have never been with out the silver spoon in their mouth are getting ready to vote on something they have had for years. Where do we go from here? To the ballot box in 2010, when those who have voted for the same good old boys for years finally wake up and throw the bums out. Until then we will be mired in the quagmire of lobbyist money and congressional greed.

[BlueMed]

THE PUBLIC OPTION IS NOW ONLY SUCH BY NAME.
An "option" that only a small percentage of people can choose is not an "option"--even less so a "public" one.
THE "OPT-OUT" PROVISION IS A COP-OUT. It is profoundly undemocratic and discriminatory. Those Americans unfortunate enough to live in states whose legislators are too conservative, or too corrupt--or both--to want the public option will not be able to benefit from it, no matter their preferences and needs.
If the bill passes as is, then America is not a "democracy"--from the Greek: government of the people. We have never been farther from this definition in the history of Western states.
I don't know why even "lefties" like Ed Schultz are suddenly applauding Reid for a job well done. He's even worse than Max Bogus. He's got a plan that will make sure the public option is weak, wishy-washy, puny, and not cost-effective = it will fail. Then the stupidest Americans will be confirmed in their idea that "socialized" medicine is bad (this bill is a million miles away from any form of "socialized" medicine); and intelligent Americans will probably be too worn out, and jaded, to keep fighting for a better health care bill in the future.
I used to think that no Western politicians were more corrupt than those of my birthplace, Italy. The US ones are worse! They don't answer to the people, but to the corporations who bribe them.

[abluevoice]

I support the opt-out as a great evolutionary tactic, and don't understand Lieberman's grandstanding.
If the Dems had a single Tom DeLay mentality among their Senators they could snap this manipulative publicity seeker in line. What was Gore thinking when he picked this bum as a running mate.
Anyway, I qualified for medicare this summer, and I went for a private HMO, Secure Horizons, as my choice for plan B, at the same cost as medicare plan B and with slightly better coverage. This is a "public option" as it now exists in medicare. There are several private insurer's competing against the government for plan B, most at the same cost and coverage and some even better, and some more expensive.
I was very pleased with my choice (after much research) until yesterday I got a notice from Secure Horizons, that for 2010 they are raising their cost $300 a year more then the government's plan B.
So I guess I will switch back to the government's less expensive plan B.
But my point is this is a perfect example of why no one can ever trust a profit driven private insurer versus the government.

[Eggsackley]

Lieberman had not yet gone off the deep end when Gore picked him as a running mate.

[george eka]

According to the polls 60% support a public option. Achieving a public option is currently being stalled by perhaps one vote in the Senate. Its about as close as it can get. The message here is that there is simply more work to do. Democrat party activists need to swear off cynicism and move forward. It is simply destructive cynicism that breeds shameful things like resorting to vote fraud and failing to pull out all the stops to get out the legitimate vote. And it is cynicism on the part of the progressive voter that causes him or her to assume a defeatist attitude and simply stay home on election day. Unfortunately, a lot of us thought the job was done when we elected our current President. The the reality is that the job has only begun. We need to transfer the successful template that got us a 21st century President to the House and ESPECIALLY the upcoming Senate contests. We REALLY need to concentrate on the Senate contests because thats where legislation becomes do or die. It can happen if we get out the vote and make it happen. So don't think negative. Let us all be encouraged by the success we enjoyed in the last election. We can have a clean and honorable election and move our country forward. Yes we can!

[wpmiller]

The keyword is not 'evolution', it is "Single-Payer". But apparently we are not going to get that until people (already the majority) take to the streets with pitchforks and torches.

And as to how to handle Sen Lieberman ... see above.

[dawnec1957]

Take the new poll for the public option.
This poll is on Sen Durbin's web site but I copied the link before doing the survey.

http://citizensforapublicoption.com/

[rlugbill]

The Organisation for Economic and Co-operation and Development [OECD] released a report which compares health care statistics:

In 2007, the total spending for health care in the U.S. accounted for 16% of the country’s GDP, the highest share among the OECD and almost double the OECD average
On a per capita basis also the U.S. spent the highest with a total of $7,290 which is two-and-half times the OECD average
The public share of health care expenditure in the USA (45%) is less than any other OECD country
Despite spending the most, the U.S. provides health care coverage for only the elderly, disabled and some of the poor people
In comparison, the same amount is enough to provide universal health care insurance by the government for all citizens in other OECD countries
35% of total health care expenditures is done by private health insurance which is the highest In OCED
There are fewer doctors per capita in the U.S. than most other OECD countries
Life expectancy in the U.S. is lower when compared with Japan,Switzerland, Canada and Australia
Infant morality rates in the U.S. is higher than most OECD countries. In 2006, it was 6.7 per live births relative to OECD average of 4.7
Obesity rate among adults is the highest in the U.S. in the OECD countries at 34.3% in 2006. Higher obesity rates leads to higher health care spending in the future

[Eggsackley]

One reason we have fewer doctors per capita is that the medical schools only take a small percentage of the qualified applicants. The competition to get into medical school is fierce. Maybe we should have a national medical school to produce more doctors to work in the public sector.

[PlaceboStudman]

What can we expect to see? We can expect to see costs skyrocketing, as more people are given insurance, and people are still living in their "I want it all and I want it now" instant gratification world, so now (after reform passes) people who previously didn't have insurance, and actually took better care of themself to avoid getting sick in the first place will join the lazy lethargic apathetic slobs who already have insurance and who are running to the doctor for every bump, bruise, scrape or pimple.

Nothing, absolutely nothing will change, so long as Health Care is seen as a right, and things like botox and rogaine, lipo and collagen injections are considered "health care".

No, those are EGO care, and our egos are the last thing that need to be boosted in this day and age. We need maturity and responsibility, and people to realize that your sprained ankle is NOT more important than the kid in the next bed dying from cancer, or any one of the countless congenital disabilities that have no effective treatment...let alone cure

[knowhelpnow]

How do you substantiate your statements.

[PlaceboStudman]

I substantiate my statements by personal experience of having been in the hospital and on the verge of death more times than I can count, while my roommate is in the bed next to me because of a wholly preventable minor injury from backyard weekend football with the guys, or bungee jumping or sky diving...

[melodramy]

You lose credibility and an audience when you resort to such ridiculous hyperbole.

People do not see doctors for every bump, bruise, scrape and pimple. We don't consider it fun, entertaining, gratifying and it's not because we're lazy, lethargic or any other imaginary adjective you have conjured up and assigned to people who have insurance so they aren't driven to financial ruin. Most people avoid doctors even when insured because it is not at all a pleasant or entertaining way to spend one's time in a doctor's office. We go when we're sick and injured and it's usually unpleasant. Not sure why you would so clearly despise people for this.

The "recreational" procedures like botox, collagen, etc. you are constantly bandying about are paid out of pocket, not by insurers, are not seen as rights by anyone, and don't really belong in a dicussion about improving basic health care access and cost controls for Americans who, unlike in other sane and humane countries, frequently go bankrupt and lose everything they have from they or a family member becoming sick or injured. Your rants about the exaggerated negative qualities of all Americans who have insurance or see a doctor, seem hateful, out of place and self absorbed.

[PlaceboStudman]

People don't consider skydiving, bungee jumping, backyard football fun and entertaining? Or are you trying to claim that no one gets injured while sky diving, bungee jumping or playing back yard football? You CANT deny that because I see that all the time on my regular trips to doctors and ERs. How can I not despise people who intentionally put their health on the line for the sake of entertainment, while others have real legitimate diseases and disabilities they have no control over?

And no the recreational procedures are not paid for by insurance, but someone is paying BigPharma or the NIH to *invent* them, and that takes away money from inventing cures for real disease and disability long before insurance gets ahold of a claim to accept or deny.

Hateful? Perhaps...out of place? Well that's only because there IS NO place for a discussion of QUALITY of care in this country, and I am no more self absorbed in my belief that medicine should come before money than those people who believe money will solve all their problems.

It won't solve anyone's problems, it will only change wht the problem is