Thursday, July 30, 2009

Heresy on Health Care

In my new FindLaw column, “Should Advocates of Single-Payer Health Insurance Oppose the Public Option?” (to be published later today), I take a position on health care reform that I would not have expected to take even a week ago. Specifically, I argue that the "public option" in health care reform -- that is, having the government create a new health insurance program to compete with private insurers like Blue Cross/Blue Shield -- is not the next best alternative to single-payer. If we are not going to have a single-payer health care plan -- and we obviously will not, this time around -- it would actually be better to have a regulated group of private insurers with no public option rather than adopting the "middle ground" of having many private insurers and one publicly-owned insurer.

I realize that this is heresy among liberals, but so be it. I should point out that my argument is not another variation on the timeless liberal versus radical divide, i.e., whether things have to get worse before they get better (a/k/a incrementalism vs. absolutism). Although some of my argument is based on predictions about how the alternative systems would play out over time, I argue that the no-public-option approach is the better of the two remaining choices, not that any short-term pain suffered by the few is justified by the long-term gain to the many as we wait for the public to become so miserable that they rise up and demand single-payer health care.

In any event, I will not rehash my reasons for reaching that conclusion here. Instead, I will point out the political advantages of my approach as well as the aspects of health care reform that are both essential and achievable in the current environment.

Politically, my suggestion should be music to President Obama's ears (which is not to say that he is likely to hear about my suggestion). As a committed compromiser, and facing yet more fierce resistance from the right wing of his party (hardly "moderates," notwithstanding the press's descriptions of these guys), being able to oh-so-reluctantly back off from his "socialistic" proposal should be a natural move for Obama. The key is to use the bargaining chip well, to get the other elements of a good plan in place to make the best of a bad political atmosphere.

What are the essential elements of a good plan? Any good proposal, as I discuss briefly in the FindLaw piece, must regulate the adverse selection and moral hazard problems that have so badly distorted the current system. The plans on offer from the Democrats all involve some effort to require insurers to enroll people notwithstanding pre-existing conditions and to prevent insurers from refusing to provide coverage for people who become ill. Regulations of this type rise or fall on their details and enforcement, and Obama should push to make sure that the resulting legislation in all of its facets is as strong as possible.

In addition, cost controls must be a key part of any plan. (Of course, any non-centralized system is going to have much higher costs than single-payer, but again, we are well past first-best choices). All of the familiar proposals to reduce health care inflation must be included, especially changing the compensation schemes for doctors from piece-work to a holistic approach, emphasizing prevention and improved diets (veganism as first-best, of course), and computerized medical records. In addition, it is important to create competition in geographic areas where it does not currently exist, which amounts to requiring that providers offer insurance in some areas where they currently do not do so.

Would the forces arrayed against Obama go along with all of this? Certainly, they would not like this agenda. For reasons that are not entirely clear, however, they are fiercely opposed to the public option. (I realize that this very opposition might tend to disprove my basic thesis; but I suspect that much of the opposition to the public option is based on rigid ideology as well as fear of the unknown. I also strongly suspect that private insurers would quickly learn how to thrive in a world with a public option.) Given that opposition, this gives Obama and the Democrats serious bargaining power.

The health care debate is spiraling downward, and it is becoming distressingly possible that the entire effort to improve the health care system could once again collapse. We should not view the public option as the cornerstone of any acceptable reform and the line in the sand which cannot be crossed, as many liberals currently do. Instead, the public option should be seen as an unnecessary and potentially harmful part of any reform that could flow from the (badly flawed) basic approaches currently under consideration.

If we must have privately provided health insurance, the important thing is to force private insurers to change their behavior. The bargain that I describe above might achieve that result.

-- Posted by Neil H. Buchanan


Paul Scott said...

I thought I would comment here, rather than Findlaw, about you FL column.

Here are my various concerns and note, in no particular order.

1. Public Option is good and I personally want it because while I trust the government option health care to not treat me poorly, I trust neither the private insures nor the governments ability to enforce regulations. Will the government, large scale, enforce things and make thing better? Sure, in the long run, probably so. Will the government, small scale, actually protect me if my insurer decides not to pay for a procedure I need? I don't think it will - not in time to save my life anyway. The second there is a public option available, I am going to take it.

2. Profit Motive - something I generally consider to be a good thing - will be non-existent with public option. This, in itself, should be a good thing from a customer perspective. Unless you think the government will effectively install a substitute, by, for example, place expense caps or insisting that premiums cover costs. Even so, as long as the government does not get into the "pre-existing condition" and "experimental treatment" game, I can't see the public option being a bad choice for people.

3. Unrelated to health care, the whole thing has been an eye-opener for me on another front. My understanding is the single-payer is overwhelmingly supported by the public - Something to the tune of 65%. If sponsoring/supporting something with that much public backing can mean political death then something is very wrong with the fundamentals of our government. The opposite should be true - going against the overwhelming wishes of the public should be politically risky. Almost more than health care itself, this is an alarming fact that should be explored and fixed as a high priority.

Neil H. Buchanan said...

Paul Scott's arguments are, in my mind, quite powerful and potentially persuasive on an issue that I view as a very close call. As has become my wont, I will blog about this further next week, taking into account these arguments as well as others with which I've struggled. On balance, I continue to think that the public option should be traded for better regulation, but I readily concede that this is an issue on which reasonable people of good faith can differ.

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jet said...

Community Choice is excellent and I individually want it because while I believe in the govt option medical proper want to not cure me badly, I believe in neither the personal guarantees nor the government authorities capability to use rules. Will the govt, huge, use factors and create factor better? Sure, in the lengthy run, probably so. Will the govt with, little, actually secure me if my insurance provider chooses not to pay for a process I need? I don't think it will - not in a chance to preserve my lifestyle anyway. The second there is a public option available, I am going to take it.

jet said...

Benefit Purpose - something I usually consider to be a advantage - will be non-existent with community option with This, in itself, should be a advantage from a client viewpoint. Unless you think the govt will successfully set up a alternative, by, for example, position expenditure hats or requiring that rates protect expenses. Even so, provided that the govt does not get into the "pre-existing condition" and "experimental treatment" activity, I can't see the community option being a bad option for individuals.

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