Monday, August 17, 2009

Reform Rx - Not Buying It

Matthew Yglesias: Who Needs a Public Option?
Even without it, health care would be the greatest piece of liberal legislation in years.

I’m not buying this and Mr. Yglesias even admits in his closing paragraph that a public option “…a good idea, that holds some promise for improving quality and reducing costs.” And that’s the point, the public option is the ultimate cost reduction tool and powerful enforcement mechanism that both progressive and blue dog Democrats ought to be united in supporting. Doing otherwise is conceding ground to industry cost manipulation, big corporate salaries and bonuses, investment dividends and no-medical services delivered profits, paper-pushing waste, reducing competition, et cetera, et cetera, et cetera.

A robust public option is a strong foundation for all other reform components.


The following key factors come from a piece written by Andre Orr of the Economic Policy Institute:

"-Competition American health care today has limited or no competition. A public plan would force private insurers to compete on the basis of efficiency as well as quality, rather than how they often compete today, which is on their ability to select the healthiest individuals and companies or pass costs to employers and workers. If the cost or the coverage of a private plan became unsatisfactory, there would be a large-scale shift to the public plan, and vice versa.


-Reduced costs Since a public health insurance plan would have much lower administrative expenses and could take advantage of its size for negotiating more efficient prices and building economies of scale, it would have significantly lower operating costs, resulting in windfall savings.

-Quality A public insurance plan would be able to introduce quality enhancements and innovations that profit-seeking private plans currently do not have the incentive to adopt, given the short-term commitments to their enrollees.

-Access While the majority of Americans have employer-sponsored health insurance, this coverage has eroded in recent years and it still leaves tens of millions with no insurance, underscoring the need for a system that can provide more comprehensive coverage. Even among full-time workers, 17% do not have insurance. Many more lose coverage each year, at least temporarily, when they leave their jobs - a problem that becomes more widespread in times of high unemployment.

-Good health Besides being the ultimate objective of a health care system, keeping people healthy is far more cost-effective than treating them once they become ill. However, people with spotty insurance coverage or no coverage at all are more likely to forego needed medical attention and preventive care, resulting in poorer health outcomes, which also drive up health care costs."

Please also see Robert Reich's blog for further critical political insight. He is correct that winning a public option is our test and we need to act.

And finally, who is served by killing the public option? Check out this Reuters story:

HMO stocks up on signs public health plan fading
UnitedHealth Group Inc shares rose 3.6 percent at mid-afternoon, WellPoint Inc climbed 3.3 percent, Aetna Inc increased 5.2 percent, and Coventry Health Care jumped 5.2 percent.

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