Real Reform
Submitted by Dr. JG Kaplan on Thu, 2009-06-25 18:14
What do the following three (3) statements, decrying a co-op plan instead of a public health insurance option have in common?
1. Cooperatives "lack the scale and authority to negotiate lower rates with drug companies and other providers, collect wide data on outcomes, or effect major change in the system."
Reich RB. "Why We Need a Public Health-Care Plan (Former Secretary of Labor and professor at the University of California)
2. Cooperatives might be able to provide some backup in some parts of the nation, but they are not going to have the ability to be a cost-control backstop, much less a benchmark for private plans, because they are not going to have the reach or authority to implement innovative delivery and payment reforms. And so [the Chairman of the Senate Budget Committee, Kent] Conrad's idea appears to be yet another compromised compromise that cuts the heart out the idea of public plan choice on the alter of political expediency.
Hacker J. "Un-Cooperative: The Trouble with Conrad's Compromise," (political scientist, U.C. Berkeley and Author of Health Care for America
3. "For the record, neither regional health cooperatives nor state-level public plans, both of which have been proposed as alternatives [measures to effect health care reform], would have the financial stability and bargaining power needed to bring down health care costs."
"Health Care Showdown," by Paul Krugman, Health care economist and New York Times columnist:
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Ans: All three suggest that co-ops don’t have the muscle, reach or power to do what a government sponsored 'managed competition' would do. #1 wants data, but has no method for measuring what is being done to or for patients and if it helps (i.e., managing the care); #2 doesn't define "innovative delivery" or "payment reforms"; #3 thinks the health care crisis is just a matter of haggling for lower prices.
Fortunately, David Riemer* and Alain Enthoven*, point the final pathway to reform in their NY Times, Op-Ed piece, "The Only Public Health Plan We Need," saying:
"What we need instead is a public plan that will impose a stern and lasting discipline on our insurance market — and at the same time insure everyone, provide excellent benefits and offer abundant choices."
They also discuss health insurance 'exchanges,' (where you comparison-shop for coverage and where risk is 'community'-rated (as opposed to 'experience'-rated).
The exchange applies market power to pressure insurers to lower the costs and improve the care. But, how does it get that power? First, it has critical mass, including at least 20% of those who currently do not receive either entitlement program—Medicare or Medicaid. "Second, the exchange would need to ensure that no subsidies for health insurance, whether provided by employers or the government (through the tax system), exceed the price submitted by the lowest-bidding qualified insurer and benefit package. All individuals in the pool would be free to join any insurer that submits a bid. But enrollees would have to pay out of pocket — and preferably with after-tax dollars — any amount above the price of the lowest-bidding plan."
Now the 'Pièce de résistance'
"How would insurers lower prices and raise quality? By passing their incentive along to doctors and hospitals. To maximize their revenue from insurance companies, doctors and hospitals would need to provide better care at a lower price — something they can accomplish only by squeezing out error, waste and inefficiency."
* David Riemer is the director of Community Advocates Public Policy Institute in Milwaukee. Alain Enthoven is a professor emeritus of management in the Graduate School of Business at Stanford.
It is relevant to point out that recent debates on how to pay for health care reform that suggest cutting Medicare spending, cutting doctor and hospital reimbursement, cutting tax breaks (or capping the value of benefits that go untaxed), curtailing income tax deductions for high earners, etc. ARE MISSING THE POINT. THE REAL REFORM IS TO IDENTIFY AND PAY FOR WHAT WORKS IN THEORY AND IN PRACTICE + THE OBVERSE—STOP FUNDING THE OPPOSITE.
From: Fredrick H (MD, PhD, JD):Date: June 25, 2009 10:39:56 PM EDTEnthoven loves the Kaiser system. Need I say more?So here's a plan only a business school professor could love.Make HMOs bid to provide insurance, accept the low bidder and pay no one else any more.It's easy to bid low - HMOs can always provide minimal coverage and drag quality down far enough to just cover profits. And, there's not a WORD about maintaining quality in this proposal.What do we do about the people who buy the best plan they can afford, and have an expensive uncovered illness? Require that all plans cover funeral costs?Medical Coverage is NOT an end in itself! It is a Means to the end of medical Care!
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