Claim: Recently, Karen Ignagni, president and chief executive officer of America's Health Insurance Plans (AHIP), has been trying to put the industry’s best foot forward, arguing that when it comes to reform, healthcare insurers have been the most cooperative members of the healthcare industry.
After all, insurers have agreed to stop shunning sick patients: They will no longer turn away customers who, through no fault of their own, suffer from pre-existing conditions such as breast cancer. Graciously, insurers have said that they will refrain from dropping paying customers because the insurer suddenly “discovers” a pre-existing condition –after the customer is diagnosed with MS. Finally, insurers have pledged to stop charging sicker patients sky-high premiums. Instead, everyone in a given community will pay the same premium for the same plan. (This is now the law in some states).
Truth: What the industry has agreed to hardly represents a “concession”. They have consented to do what insurance companies are supposed to do: cover not just the young and healthy, but those who might actually use the policy.
But Ignagni is right on one point: Insurers are more enthusiastic about reform than most in the healthcare industry. This is hardly surprising. Universal coverage—with a mandate that everyone buy insurance–will bring them as many as 47 million new customers, government subsidies in hand.
What’s not to like?
Granted, insurers are going to have to alter their business plan. But, without reform, the alternative was to go out of business altogether. With the cost of health care spiraling (insurers’ reimbursements have been levitating by 8 percent a year for the last ten years), employers scaling back on benefits, and more and more self-employed Americans discovering that they cannot afford to buy insurance in the individual market, for-profit insurers are in financial trouble. (If you don’t believe that, check out the price of the stocks: UnitedHealth Group, for instance, is trading at $26 and change; eighteen months ago, the company’s shares fetched $57. )
Claim: What the insurance industry is not willing to do is compete with a public insurance plan. The for-profit insurance industry wants a monopoly over all of those new customers. Of course private-sector insurers will have to vie with each other for market share, but thanks to consolidation in the industry, a few major players will be the big winners—as long as they don’t have to go head-to-head with a public sector plan. They know that the public plan would be less expensive because it won’t have to provide profits for shareholders, pay executives multi-million dollar salaries, or spend a fortune on marketing, advertising and lobbying.
While they are willing to compete with each other, they don’t want to go head-to-head with a public sector plan that would definitely cost less and, as I explain below, plans to build on Medicare reforms to offer customers higher quality care.
Claim: Janet Trautwein, CEO of the National Association of Health Underwriters (NAHU), made this very clear earlier this week.
“We all have a stake in achieving meaningful reform that both preserves Americans' freedom to choose their doctors and lowers long-term health care costs. A public option will accomplish neither,” claimed Trautwein, who represents more than 100,000 licensed health insurance agents, brokers, consultants and benefit professionals nationwide.
Then she went out on a limb, and told what I have to call a Big Lie about the public option: "A new government-run health plan will raise costs for Americans with private insurance by systematically underpaying doctors and hospitals, our country's existing public plans — Medicare and Medicaid–raise the average family's premiums by $1,800 a year. A public option will only exacerbate this problem–and make insurance more expensive."
Let’s break down Trautwein’s allegatins, one by one:
Claim: The NAHU supports reform that preserves our freedom to choose our doctors. A public option would not do that.
Truth: No American would be forced to choose the public option. This means that if your doctor doesn’t participate in the public plan, you could choose whatever private sector insurance he accepts. (Low-income and middle-income households that qualify for a subsidy from the government could use that subsidy to help pay for the private sector plan.).
But most likely your doctor will be part of the public plan. No doctor would be forced to sign on with the public sector option, but the majority will probably take both private sector insurance and public sector insurance—just as the vast majority now take both private insurance and Medicare. As noted below, under the House bill, both Medicare and the public sector plan will hike fees for the lowest-paid physicians.
Claim: The NAHU supports a plan that would “lower long-term costs.” The public option would not do that.
Truth: The public insurance plan would incorporate Medicare reforms (already proposed in the House legislation) that would not only trim spending but enhance the quality of care. The recommendations in the House bill encourage Medicare to realign financial incentives, rewarding providers for higher quality care, rather than volume. (If you are confused about what is actually in the House bill go to “Sustainable Middle Class” where John Freeland offers a lucid summary. Scroll down to the sections headlined: “Modernization and improvement of Medicare,” and “Innovation and delivery reform through the public health insurance option” It’s worth noting that, before he read the House bill, Freeland was not a fan of the public sector option.)
The House bill dovetails nicely with a White House proposal that an Independent Medicare Advisory Council (IMAC) set Medicare fees with an eye to paying more for services that provide the greatest benefit to the patient. Monday, White House budget director Peter Orszag’s office released a letter, signed by 13 healthcare experts–including nine members of the Congressional Budget Office’s Panel of Health Advisers endorsing the idea.
What makes this letter so interesting—and perhaps critical to the debate over reform–is that although CBO director Douglas Elmendorf has expressed reservations about whether the House bill would rein in runaway healthcare spending this group of highly-respected economists—including nearly half of CBO’s own panel of health advisers — declared that they believe that IMAC could “reduce the rate of growth of health expenditures substantially” as long as it has “the authority to propose changes to Medicare payment rates for services whose prices do not accurately reflect value. It would also be able to recommend more general policy reforms, such as implementation of value-based purchasing [and] bundling of payments.” These initiatives, which change the way Medicare pays for services, were already included in the House bill.
When the public insurance option becomes available in 2013 it would take advantage of Medicare’s reforms. It is critical that everyone understand that the public sector insurance plan will be modeled on a new, improved version of Medicare that incorporates many of the changes that the non-partisan Medicare Payment Advisory Commission (MedPac) has been writing about for years. During the eight years of the Bush administration, these reports were ignored. Now President Obama and White House Budget director Peter Orszag as well as progressive Senators like Jay Rockefeller (D-WV) are determined to implement MedPac’s advice—counsel that focuses on doing what is best for the patient.
Claim: "A new government-run health plan will raise costs for Americans with private insurance. By systematically underpaying doctors and hospitals, our country's existing public plans–Medicare and Medicaid–raise the average family's premiums by $1,800 a year. A public option will only exacerbate this problem — and make insurance more expensive."
Truth: First, if someone lumps Medicare and Medicaid payments together in order to suggest that Medicare underpays you can be certain that person is lying to you. Medicaid is an entirely separate program for the poor and, unlike Medicare, it is administered by the states. Medicaid pays significantly less than Medicare. The House bill addresses the problem by raising Medicaid payments for primary care to Medicare levels—but everyone agrees that Medicaid payments to specialists and hospitals remain too low.
By contrast, the idea that Medicare “systematically” pays too little just doesn’t square with the facts. Granted, there is a consensus that Medicare underpays primary care doctors and others who practice “cognitive medicine” (listening to and talking to the patient) too little. But the House bill specifically raises Medicare payments for family practitioners by 5% to 10% (paying more in areas where there are greater shortages), while also recommending bonuses for doctors who form accountable care organizations or succeed in managing chronic diseases. In addition, the House plan greatly expands scholarships and loan forgiveness for students who decide to go into primary care.
When it comes to Medicare payments to specialists and hospitals, the situation is far more complicated. Many hospitals insist that they lose money on their Medicare patients. But when the American Hospital Association testified before the Senate Finance Committee earlier this year, it acknowledged that, in 2007, 42 percent of U.S. hospitals turned a profit while serving Medicare patients.
Meanwhile, a 2006 article in the Journal on Health Care Financial Management reports that from 2002 to 2004, Medicare reimbursements for certain patients were very high—though Medicare wasn’t paying enough for patients who wound up in intensive care units (ICUs). While the cost of ICU stays rose, Medicare reimbursement shrank which translated into an average loss of $2700 for each ICU patient. Meanwhile, average Medicare reimbursement for patient not requiring an ICU stay increased by nearly 10 percent. As a result hospitals made money on these Medicare patients.
The report also revealed that just 23 percent of Medicare patients drive hospital losses, and most of these patients were admitted to an ICU. In the end when you combine the high-cost patients with the low-cost patients, 23% of the Medicare patients led to an overall loss of $387 per admission on all Medicare patients.
This suggests that, Medicare was not “systematically underpaying for all patients", though it was paying too little for ICU admissions.
The next question of course is this: why did it cost hospitals so much to care for ICU patients? On closer analysis, researchers discovered that “the pharmacy, supply, and laboratory departments accounted for more than 40 percent of the total costs” for ICU patients. “Rather than being directly related to medical services provided to the patient these areas are sources of incremental items that support patient care.”
Everyone has heard of ICU patients being subjected to a battery of tests; one wonders how many of those lab reports helped the patient? Were they all necessary? The report suggests that “hospitals need to address their costs–particularly in pharmacy, supply, and laboratory departments.”
What is certain is that across-the-board hikes—or cuts—for Medicare make little sense.
Return to the fact that not all hospitals lose money on Medicare: 42% of all U.S. hospitals manage to turn a profit on total Medicare’s reimbursements. This is something that hospitals do not like to talk about.
They know that some hospitals stay in the black when treating Medicare patients simply because they are more efficient. In private conversation, hospital CEOs have confirmed this. Medical Centers such as Mayo Clinic, and the accountable care organizations that Atul Gawande wrote about in the June 1 New Yorker provide better care at a lower cost. Meanwhile, other hospitals make a profit on the majority of their Medicare patients. They should analyze where they lose money and why. Maybe Medicare does need to increase payments for certain patients—while slicing overpayments in other areas. Or, maybe the hospital needs better system management to improve the way it delivers care.
The bottom line is this: as MedPac has pointed out in earlier reports, when private insurers pay hospitals more than Medicare does, too often, private insurers are simply rewarding inefficiency. It costs these hospitals more to care for patients because it takes them longer to make a diagnosis, or because their patients are more likely to acquire an infection, and so stay longer. Some hospitals overtreat—putting patients in an ICU who really need much less expensive—and far kinder—palliative care. Many hospitals run unnecessary tests. When private insurers pay for inefficiency and waste they pass the cost along to all of us, in the form of higher premiums.
Today or tomorrow HealthBeat will be publishing a guest-post that clarifies many of the mysteries of Medicare payment. Look for it—it’s excellent.
“Insurers are more enthusiastic about reform than most in the healthcare industry. This is hardly surprising. Universal coverage—with a mandate that everyone buy insurance–will bring them as many as 47 million new customers, government subsidies in hand.
What’s not to like? ”
Spot on. Although the real number of uninsured is probably significantly less … unless illegals are counted. But of course, the President insists they won’t be covered. *wink*
I’ll look for the upcoming guest post clarifying the Mysteries of Medicare payment. For now, here’s a “Truth Squad Redux” in the form of an excerpt from a new website about the country’s only experience thus far with “a mandate that everyone buy insurance”
According to Massachusetts residents who created this new website resource to provide details on the Massachusetts Individual Mandate Insurance Law (Chapter 58 of the Acts of 2006)… here’s “What’s not to like:
Excerpts from http://masshealthlawtruth.org
Massachusetts “Health Reform”, Chapter 58 of the Acts of 2006
> Touted as a plan to provide needed medical services to all people in the state, in reality, this law commands individuals to purchase insurance that for many is too expensive to buy or unaffordable to use or both.
> Due to the absence of cost control and dependent on the political whims of Washington, long-term stability of this expensive experiment is uncertain.
> Insurance companies and upwardly mobile politicians stand to gain and have made much money from this decree while hard-working taxpayers have been thrust into choosing between daily needs or breaking the law and paying costly penalties.
> Residents’ concerns about the adverse effects of this law are being ignored and many details kept secret. Information about this sweeping, compulsory shakedown must be made public and rejected.
> The mission of this website is to expose the facts about the Bay State’s
mandatory health insurance law. Senator Kennedy’s H.E.L.P. bill, the Baucus bill in the Senate Finance Committee, and others currently on the table in D.C. closely resemble this [Massachusetts] model which has proven to be neither conducive to providing health care for all nor fiscally responsible.
—-
You can learn more about the MA Law and what it could portend for the nation at http://masshealthlawtruth.org
I should also point out that I have no idea what the government should do to fix health care, but I do know it most likely will not be fixed thanks to politics as usual in our country. I blame both sides. While these old guys in suits dick around, the rest of us suffer.
I should also point out that I have no idea what the government should do to fix health care, but I do know it most likely will not be fixed thanks to politics as usual in our country. I blame both sides. While these old guys in suits dick around, the rest of us suffer.
Only advice I have when some rendition of health care reform is passed, and it will be, is to “get healthy, stay healthy.” With 50+ million so-called uninsured get thrust on the marketplace there will have to be rationing as the number of doctor’s won’t change.
Maggie … how do you feel about the Hennessey Plan?
http://keithhennessey.com/2009/07/30/health-plan-v2/
Not surprisingly, I strongly disagree about the need for a public health insurance option.
I’m all for reforming Medicare and for using both comparative effectiveness and cost-effectiveness research in helping to determine coverage and payment policy. Anything we can do to change the incentives within Medicare to reward value instead of volume is to the good. I support using a group of experts like MedPAC or a similar entity, perhaps modeled after the Federal Reserve Board, to make these judgments and it needs to be as independent of the political process as possible, ideally, with its own revenue source and not subject to the annual appropriations process.
As I think we’ve discussed before, to the extent Medicare is successful in implementing changes in both coverage and co-pays as well as tinkering with reimbursement levels, private insurers will be more than happy to follow suit, and if Medicare begins to implement such changes in the near term, the insurers will not have to wait until 2013 to piggyback on Medicare’s reforms which they have been encouraging for some time now. The insurers recognize that they don’t have the moral authority to make these changes on their own unless Medicare does it first.
If the public option negotiates reimbursement rates as opposed to using Medicare’s dictated payment approach, it is far less than clear that it would have any meaningful cost advantage over private insurers. While insurance company administrative costs and profits can be quantified with great precision, fraud is impossible to quantify. In certain geographies, with South Florida the most notorious, Medicare (and Medicaid) fraud is considered to be widespread. Private insurers have an economic incentive to mitigate fraud because it helps to keep health insurance from becoming completely unaffordable. Medicare and Medicaid beneficiaries, by contrast, are largely insulated from insurance premium costs. Finally, even if competition from a public option starts out on a true level playing field basis, I don’t think the government can be trusted to keep it that away especially given the widespread vitriol in Congress toward insurers.
What’s bothering me right now is how are enough Åmerican people going to know, and understand, all that is at stake in the current proposed reforms. I deeply suspect we’re going to see a lot of the fanatics messing up public meetings. The insurance industry is plunking down millions. The LA Times ran a full-page ad from the Cato Institute featuring a fierce looking Uncle Sam, steth around his neck, pointing out at you, saying “Health care reform is needed. But a government takeover is not the answer.” This from a putative think tank, what can we expect from others? Meantime, we have Rush, and Lou and O’Reilly to fill in the gaps with appeals to latent fears, anger, hate and sheer ignorance.
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Barry —
I think you have the incentives on fraud backwards.
Medicare is required by law to aggressively investigate fraud and uses the full power of the federal government to do so — including the FBI.
Private insurance tends to ignore fraud except in the worst cases because they incorporate the costs in their premiums and go on as before.
The reason for this is that fraud is relatively small part of the total costs of health care. Except for some sectors — mostly corporate entities who systematically overstate or pad bills for supplies and labs — fraud is a tiny fraction of costs.
For private insurers, chasing fraud is more costly than absorbing it. Medicare does not have that choice, since it is obligated by law to pursue fraud.
Pat S:
Could you provide links from the Social Security Administration to back up your claims?
Don Levit
LEAD, FOLLOW, OR GET OUT OF THE WAY. (Thomas Paine)
We have the 37th worst quality of healthcare in the developed world. Conservative estimates are that over 120,000 of you dies each year in America from treatable illness that people in other developed countries don’t die from. Rich, middle class, and poor a like. Insured and uninsured. Men, women, children, and babies. This is what being 37th in quality of healthcare means.
I know that many of you are angry and frustrated that REPUBLICANS! In congress are dragging their feet and trying to block TRUE healthcare reform. What republicans want is just a taxpayer bailout of the DISGRACEFUL GREED DRIVEN PRIVATE FOR PROFIT health insurance industry, and the DISGRACEFUL GREED DRIVEN PRIVATE FOR PROFIT healthcare industry. A trillion dollar taxpayer funded private health insurance bailout is all you really get without a robust government-run public option available on day one. Co-OP’s ARE NOT A SUBSTITUTE FOR A GOVERNMENT-RUN PUBLIC OPTION. They are a fraud being pushed by the GREED DRIVEN PRIVATE FOR PROFIT health insurance industry that is KILLING YOU!
YOU CANT HAVE AN INSURANCE MANDATE WITHOUT A ROBUST PUBLIC OPTION. MANDATING PRIVATE FOR PROFIT HEALTH INSURANCE AS YOUR ONLY CHOICE WOULD BE A DISASTER AND UNETHICAL, CORRUPT, AND MORALLY REPUGNANT. AND PROBABLY UNCONSTITUTIONAL AS WELL.
These industries have been slaughtering you and your loved ones like cattle for decades for profit. Including members of congress and their families. These REPUBLICANS are FOOLS!
Republicans and their traitorous allies have been trying to make it look like it’s President Obama’s fault for the delays, and foot dragging. But I think you all know better than that. President Obama inherited one of the worst government catastrophes in American history from these REPUBLICANS! And President Obama has done a brilliant job of turning things around, and working his heart out for all of us.
But Republicans think you are just a bunch of stupid, idiot, cash cows with short memories. Just like they did under the Bush administration when they helped Bush and Cheney rape America and the rest of the World.
But you don’t have to put up with that. And this is what you can do. The Republicans below will be up for reelection on November 2, 2010. Just a little over 13 months from now. And many of you will be able to vote early. So pick some names and tell their voters that their representatives (by name) are obstructing TRUE healthcare reform. And are sellouts to the insurance and medical lobbyist.
Ask them to contact their representatives and tell them that they are going to work to throw them out of office on November 2, 2010, if not before by impeachment, or recall elections. Doing this will give you something more to do to make things better in America. And it will make you feel better too.
There are many resources on the internet that can help you find people to call and contact. For example, many social networking sites can be searched by state, city, or University. Be inventive and creative. I can think of many ways to do this. But be nice. These are your neighbors. And most will want to help.
I know there are a few democrats that have been trying to obstruct TRUE healthcare reform too. But the main problem is the Bush Republicans. Removing them is the best thing tactically to do. On the other hand. If you can easily replace a democrat obstructionist with a supportive democrat, DO IT!
You have been AMAZING!!! my people. Don’t loose heart. You knew it wasn’t going to be easy saving the World. 🙂
God Bless You
jacksmith — Working Class
I REST MY CASE (http://krugman.blogs.nytimes.com/2009/07/25/why-markets-cant-cure-healthcare/)
Republican Senators up for re-election in 2010.
* Richard Shelby of Alabama
* Lisa Murkowski of Alaska
* John McCain of Arizona
* Mel Martinez of Florida
* Johnny Isakson of Georgia
* Mike Crapo of Idaho
* Chuck Grassley of Iowa
* Sam Brownback of Kansas
* Jim Bunning of Kentucky
* David Vitter of Louisiana
* Kit Bond of Missouri
* Judd Gregg of New Hampshire
* Richard Burr of North Carolina
* George Voinovich of Ohio
* Tom Coburn of Oklahoma
* Jim DeMint of South Carolina
* John Thune of South Dakota
* Kay Bailey Hutchison of Texas
* Bob Bennett of Utah
Don —
Here is a nice summary of the legal and enforcement system regarding fraud in Medicare:
http://www.aapsonline.org/fraud/fraud.htm
Pat:
That looks to be an exzcellent source.
Do you know how much money is actually used to investigate fraud?
How might that figure compare with private insurers, on a percentage basis?
Are those federal dollars used included in the low administrative costs?
Don Levit
Are the dollars for policing fraud included in the Medicare budget? Yes.
Don’t know how much is spent, but you could look it up in the Medicare budget on line.
Don’t know what private insurers spend on fraud, but the main issue for them is whether chasing fraud is worth the cost of doing it. Based on my own experience in 30 years of practice, I would guess they don’t spend much, since I never heard about a private insurance investigation of fraud.
I think that what most private insurers are doing is counting on Medicare, with its more aggressive mandated position and with its power to use federal investigative efforts, to catch and deter fraud.
Cost shifting, as it were.
Doc 99, Ann Malone,
Doc 99–
The legislation is explicit: illegal immigrants will no be covered under health care reform. There is no “wink”
about it. (Read the bills.)
Ann Malone–
AS always, good to hear from you.
But I have to disagree:
There is a huge difference between the House legisation and the Seante HELP bill on the one hand– and Mass health care reform on the other.
First, Mass has no public sector plan that is administered by the govt (without involving private insurers) and that competes with private insurers to keep prices down and quality high.
Secondly, the Dartmouth research shows that Massachusetts has the most expensive healthcare on the globe, thanks to overuse of cutting–edge medical technologies. (See http://www.Dartmouthatlas.org.)
These high costs set the Mass. plan up for failure from the outset.
I think it was courageous for Mass. to try this, and we can all learn much from Mass. efforts, but it’s not a typical state–i.e. it doesn’t tell us what would would happen if we try to reform healthcare nationwide.
Third, the Mass. plan didn’t take the exorbitant cost of healthcare into account when it set subsidies. Thus, even with subsidies, many middle-class people int he state cannot afford insurance.
More importantly, the Mass plan did nothing to reduce the cost of care in Mass.
By contrast, the House plan has many provisions that would cut the cost of care, including recommendations that would move Medicare away from fee-for -service payment (paving the way for the public sector plan to pay health care providers in a way that would promote more effcient higher quality, less expensive care.)
In addition, we know that in places where people see more primary care docs and fewer specialists, heatlhcare costs less and outcomes are better.
Massachusetts is a region where there are a great many specialists and many fewer primary care docs.
In fact, Mass suffers from a huge shortage of primary care docs.
The House bill would increase the number of primary care providerm –with a enormous new scholarhip and loan forgiveness program for med students who choose primary care –plus 5% to 10% increases in fees, and, on top of that, bonuses for beter outocmes,
Federal health care reformer allowing some time for these incentives to work: the public sector option, universal coverage, the subsidies and the insurance exchange won’t roll out until 2013.
This gives Meciare 3 years to experiment with these reforms and figure out which ones work first.
Mass. rushed ahead withot analyzing what universal coverage would cost. Again, I’m not faulting Mass, just saying that federal reformers have learned from this example.
Nat’l heatlhcare reformers plan to phase this in.
Henry–More patients and fewer doctors will certainly make us aware of the shortage of primary care docs.
But that doesn’t mean rationing.
We have enough specialists; the shortages are in the areas where docs are paid much less: family practioners , geriatricians, pediatricians, palliaive care specialists and general surgeons (who are not paid nearly as much as other surgeons)
INn many cases nurse-practitioners could provide many (but not all) of the services that primary care docs, geriatricans, and pediatricians provide.
If these nurses work with primaryc care dcs they can “triage” many patients, and determine which ones actually need to wait to see the docotor, and which ones just need a renewal of a prescription from the dootor.
For patients, this means no more two hours waiting to see the doctors about a minor complaint–
If we begin to pay teachers in nursing schools more, those schools would be able to enroll the many qualified applicants who now are turned down due to the lack of teachers.
(Nursing school teachers are now paid less than many nurses.)
Keep in mind that healthcare reform will not roll out unil 2013. We won’t have the insurance exchange, the public mandate, the public secotr option, or the requirement that everyone must be insured until then.
This gives everyone time to figure out how to produce the supply to meet increased demand.
Maggie,
I think you may be overstating the likely administrative cost gap between private insurers, whether for profit or non-profit, and a public insurance plan on at least two counts.
The first relates to your reference to high CEO salaries which a government plan would not pay. Even if you take the aggregate CASH compensation (salary plus cash bonus) for the top 50 executives of an insurer, it would add up to little more than a rounding error for a large company like United or Wellpoint or Aetna. The vast majority of employees are paid based on local market labor supply and demand conditions. For example, there is probably very little variance among insurers in a given region in what they pay secretaries, computer programmers, call center operators, health coaches, etc. It doesn’t matter if the CEO is paid $1 million or $5 million or $25 million. Moreover, the large chunk of senior executive compensation that is attributed to stock options and restricted stock is paid for mainly by shareholders in the form of earnings per share dilution. It is not built into the price of the product because the value of stock based compensation is not predictable and could turn out to be zero.
The second relates to advertising and marketing costs. Once health insurance exchanges are in place, people who learn about policy options there can call the insurer’s call center. The same would be the case for the public plan. Also, under community rating, the price of a policy will be much higher for most people who previously bought in the underwritten market. Aetna, for example, told investors a few months back that their average revenue from the individual insurance market was slightly over $200 per member per month (PMPM) or about $2,500 per year. By contrast, a young healthy person in northern NJ, a community rated state, would pay closer to $600 PMPM. Fees paid to insurance brokers would likely be a low single digit percentage of revenue. With guaranteed issue, underwriting costs will also disappear. The government plan would also either have to build its own claims paying infrastructure or contract the job out to TPA firms. Insurers have the technology and scale to do this efficiently in house.
On the medical cost side, if the public plan must negotiate rates like everyone else, it is highly unlikely that providers will be willing to give the public plan as large a discount as it gives to the local Blue plan or other insurers with a high local market share. The public plan could only pay lower rates if it resorts to Medicare’s dictated price approach and requires providers to take the insurance if they want to continue to do business with Medicare.
Barry–most recent comment; Barry earlier comment on Fraud; Tom,
jacksmith, Pat S.
Barry-Just Google Karen Davis and Commonwealth Fund and you’ll find excellent projections on the differences in costs.
Also note how much insurers have spent lobbying Congress this year. And, trust me, they are not going to give up advertising and marketing as the strive for market share.
There is little controversy as to whether the private sector plans will be more expensive–why do you think they are so anxious about competing.
Barry – earlier comment on Fraud– See Pat S’s comment- he’s right.
Tom–
I too am worried about get a clear message to teh American public about what hte true problems are in the current system and how the House legislation adn Senate HELP bill woudl fix them.
So much misinfromation is being thrown around– bald assertions that aren’t true–convoluted arguments that only confuse. . . This is happening even on this thread, which is discouraging.
All we can do is to continue to try to talk, as lucidly as possible, about the real issues, and ignore the red herrings.
We have to keep reminding the American public: even if you have insurance today, you may not have insurance next year–or the year after.
Unless something is done, costs will continue to spiral and neither you nor your employer will be able to afford it.
You could listen to the For-Profit Insurance Industry–who tell you that we don’t need a public-sector insurance plan. Or you could listen to President Obama who tells you we do need the public-sector option–“to keep the private sector insurers honest” and to give Americans “choices.”
Who do you trust?
The for-profit insurance industry? Or President Obama?
The President is not lying to you. He is trying to protect you from a for-profit health care industry that has been gouging you.
At this point, I think there is one point that we need to stress: Americans need to feel SECURE that whatever happens with their job or health care costs, they will have accesss to comprehensive care.
Then, once we have a final bill from Senate Finance we need to deconstruct it, and point to all of the ways that it is designed to protect the interests of the people who Profit from the system–rather than the interests of Patients.
We need reform legislation that puts People ahead of Profits.
Rather than trying to simultaneously defend all liberal proposals, I’m inclined to zero in on Max Baucus “compromise” and hammmer it to smithereens.
People need to see that Baucus is working for the lobbyists–not for the people.
We don’t have to defend every detail in the progressive reform proposals. Some combination of the House Bill and the Senate HELP bill would be fine–as long as it contains the public option. I’m counting on Pelosi, Dodd and the president to make sure that it does.
jacksmith– you are absolutely right: the co-ops are no substitue for a robust public option.
The co-ops woudl be too small and too weak. We need a public insurer who can stand up to the large, powerful for-profit insurers–and a public insurer that will stand up to drug-makers, device-makers and hospitals that
try to overcharge us. We must insist that hospitals follow the model of our best medical centers, and become more efficient.
And yes, voters who support real reform should make it clear to politicians who try to water it down: You will not be re-elected. IT does not matter how much money you receive from corporate lobobyists. If voters decide that you stood in the way of reform that would make health care affordable, all of the moeny in the world won’t save you. They’ll kick you out of office.
And keep in mind, the voters who elected Obama (many of them minorities who often don’t vote) now realize that their vote counts. I predict tha tthey will be turning out in large numbers in the Congressional elections. And they Know that they they need health care reform.
Pat S.–
Thanks very much for the good information on fraud and Medicare.