The New York Times quotes Congressman Steny Hoyer (Dem, MD) as saying, "I'm for a public option, but I'm also for passing a bill."
Getting this close to passing a bill is an impressive accomplishment given the history of health care reform efforts and the determination of the Republican opposition to ensure that it fails. For that reason, it is important to understand what we will get -- and won't get -- if a bill passes without a public option.
The proposal for an individual mandate with subsidies for those on limited incomes will go a long way toward solving the un-insurance part of the health system problem. And provisions that prohibit insurers from rejecting people with pre-existing conditions and charging them higher rates (to discourage them from buying coverage) will end the worst abuses of the present system. An exchange which set standards and organized the sale of such policies is a feasible way to implement it, as the Massachusetts model shows.
But expenditures will probably continue to rise as fast as before -- perhaps faster. The reasons: The main ways insurers have limited their outlays and generated their profits (discouraging high-risk people from buying policies and erecting administrative barriers to make access to services difficult) will be denied them. Moreover, they will still pay providers fee-for-service, which tends to increase the volume of services provided and, therefore, expenditures. To win the competition with other insurers for subscribers, they will need to lower their prices. To do that, they will first need to find innovative ways to reduce their costs. But in that effort, they have only 2 levers to pull: limit availability (which the legislation will foreclose) or reduce coverage (minimum standards will deny them this option, too). All insurers will have the same difficulty lowering their costs to keep down their prices. Add to this the fact that lowering prices is a competitive strategy which tends to have a short life anyway - because when one firm lowers its prices, competitors usually follow suit in short order. Thus, since it is difficult to do and the gain is likely to be short-lived, insurers are likely to decide, "why even bother." So, chances are good that this approach to reform will increase the numbers with coverage, but is unlikely to keep down costs.
What would a public option do to change that scenario? Since the public plan would not need to satisfy shareholders by earning a profit and would not need to conduct expensive marketing campaigns to attract potential customers, it could charge lower premiums. If, like Medicare, it also paid providers lower rates, it could charge even less. So, private insurers would be faced with a competitor that really could keep its prices down, and they would need to match those rates. They would, thus, have a compelling reason - which would not exist without the public option - to engage in the hard and expensive work of trying to change the volume-increasing incentives faced by providers. They could transform themselves into prepaid group practices, like Kaiser-Permanente or Group Health of Puget Sound. And in communities where they exist, they could seek out health care organizations which pay physicians by salary and avoid most others. They could experiment with other innovations, as well.
Without a public option, however, the insurers are unlikely to make these difficult choices, nor to do anything special to improve quality. The result will be expenditures that continue to rise too fast and quality that continues to be unreliable.
Cooperatives have been proposed as a middle-ground alternative to the public option. They would be private, not government run, and they would be not for profit. But in other ways, they would be more like private insurers without the advantages of the public option. The example of the not-for-profit Blue Cross/Blue Shield plans, most of which lost their battle with aggressive private insurers in the 1980s and 1990s, is instructive. They are unlikely to be able to keep down their own prices and will fail to reduce insurance prices generally.
When the program's costs rise faster than the money with which to pay them, cuts will be needed. Groups -- especially subsidized ones -- will be dropped from coverage, and covered services will be reduced or eliminated.
There are better ways to organize reform than reliance on competition among private insurers. But since that appears to be the direction the reform effort is heading in, we should be clear that after passage, much will be left to do unless a public option is included.
Such object lessons will pave the way for passage of a law that means something AND that doesn't preclude more complete reforms in the future.
It's not a fault to retreat from a battle lost because of insurmountable if irrational odds. It's the halfway assault that costs the most in terms of resources spent and wasted. President Obama, take it back and wait until the calls for reform become overwhelming as is inevitable.
https://www.madashelldoctorstour.com/Mad_as_Hell_Video.html
These Oregon physicians are in the process of organizing a caravan designed to inform the public about the benefits of the single-payer option. At last count they will be stopping in approximately 23 states, on their way to demonstrate in Washington. They need volunteers and our support. Please spread the word.