An Argument in Favor of the Public Option

This hard truth—that to provide for universal coverage, health care costs have to be reduced—must be reflected in any serious proposal for system-wide reform. But the Baucus bill fails on this count as well. It proposes a series of half-measures to rein in expense, ignoring the systemic basis for a perpetual spiral. Partially innocently, partially not, the U.S. has established perfect storm conditions for health care costs. First, and most fundamentally, both insurance and care are largely for-profit animals here—and when profits are the goal, prices naturally ascend to the greatest heights permitted by the market. Secondly, the health insurance industry is poorly regulated and opaque, as well as grossly uncompetitive (how it managed to wangle a federal anti-trust exemption in the ’40s and maintain it until the present-day is some sort of marvel of influence peddling, regulatory and legislative myopia, or both). Finally, the prevalence of a perverse system in which doctors’ compensation is directly tied to the amount and cost of care provided—number of tests and procedures performed, follow-ups prescribed, etc.—means that American doctors have undeniable financial incentive to prescribe the most expensive care possible. That isn’t to say that all, or even most, doctors consciously overprescribe in order to line their pockets; however, in the currently configured system, the justification for “just in case” care (i.e. an MRI “just in case” the kid who took a spill on his bike has a brain injury, though he presents no symptoms) is built in.

The Senate Finance Committee bill attempts to address only the second of these three issues, and unsurprisingly so—in spite of the fierceness and financial heft of the insurance industry lobby, it is the easiest to tackle. But it is also the least likely to reduce costs in the long-term. The creation of insurance “exchanges” at the state level, the bill’s most prominent thrust at an uncompetitive industry, may very well decrease the cost of insurance plans in the short-term (and repeal of the industry’s anti-trust exemption, which is currently being bruited, would work toward that end as well), but it does nothing to address the more fundamental sources of ever-buoyant costs in the sector. Changing the system of reimbursement for doctors by divorcing pay from quantity of care is an absolute necessity, but any effort to do this will be a slog fought tooth and nail by the American Medical Association and other interest groups. Encouragingly, models for a better, more rational system of compensation and care already exist in this country (Is there anything inherently strange about a salaried doctor?). Unfortunately, Congress has not yet reached a point where it is willing to acknowledge the importance of the fundamental link between cost and compensatory systems—it’s scarcely come up in the current debate—and it will likely be several more years before it does so.

This leaves Congress to tackle the sector’s profit-orientation, which is an absolute political non-starter. However, it is also where the public option is an essential tool, and why leaving it out of any reform bill may very well doom us to decades more of cost explosion and the continuing shame of millions of uninsured Americans. The primary argument for a public option among Democrats—that it will create competition for the insurance industry and thereby drive down premiums for everyone—is nearly as disingenuous as all of the invocations of Mother Russia by Republicans. If a government-run insurance plan reimburses doctors and hospitals at Medicare-like rates, as it should, the insurance industry simply won’t be able to compete. This runs profoundly counter to our national free market ethos, but far from being the cataclysm that the right-wing suggests it would be, the creation of a public health insurance option for all Americans is a first step toward a necessary realignment in our thinking. A public option would reveal that the government can ensure its citizens’ right to health care less expensively and more efficiently than the private sector, without a decline in the quality of care provided. It would extend coverage to all Americans regardless of their financial standing and medical history. And it could break the back of the perfidious insurance industry, paving the way for a future in which all Americans are insured either through the government or non-profit health care cooperatives.

In the early ‘60s, prominent conservatives such as Barry Goldwater and Ronald Reagan condemned proposed Medicare legislation as “socialized medicine.” Sound familiar? Now conservatives defend Medicare with a vehemence more familiarly employed in Second Amendment debates. And why? Medicare proved that government-run health care worked best for the elderly, just as Medicaid proved that it worked best for the indigent. And including a public option in current legislation could offer the same proof regarding health care for all, or nearly all Americans. News came last weekend that Senate Majority Leader Harry Reid would push anew for the inclusion of a public option in the Senate bill (albeit with states able to opt out—that is, bar their citizens from participating). If Reid is successful, the ensuing legislative battle will be epically pitched. Here’s hoping that Congress does the right things this time—the welfare of millions of Americans, and that of their pocketbooks, depends upon it.

The Baucus Bill: Simply Not Good Enough

An examination of the health care issue here is long overdue (okay, everything here is long overdue), and I confess that I began a post on the subject at least two months ago—a point in time when it appeared that disingenuous Republican outrage—“socialism,” “death panels,” “rationing,” and the like—threatened to derail passage of major reform legislation altogether. In the meantime, much of the negative momentum generated by that overheated rhetoric and undercooked reasoning has been halted by the feverish efforts (imperfect as they may be) of the Max Baucus-led Senate Finance Committee to craft a compromise bill, as well as Obama’s own willingness to stand up and be counted on the matter (in his characteristically pragmatic, noncommittal way). Now it appears probable that legislation will pass at some point in the months ahead, but absent a new government insurance plan paralleling Medicare and Medicaid (the so-called public option) or any measure that will significantly alter the manner in which insurance companies, hospitals, and doctors do business. At what point does compromise legislation become compromised?

The Senate bill, which is much closer to the bill that, given prevailing currents, will actually come before Obama for signature, is, according to the Congressional Budget Office (CBO), expected to expand coverage to nearly 30 million people primarily through direct government financial assistance to qualified individuals and families—those who aren’t eligible for an expanded Medicaid program but whose household income falls short of a predetermined threshold. Thirty million is nothing to sniff at—it represents a significant expansion of coverage, by most measures. And yet the shortfall is galling: the CBO estimates that under the Senate plan, 25 million would still be without health insurance in 2019, one third of whom would be unauthorized immigrants. Ultimately, 6% of Americans would be without coverage in ten years time, compared to 17% today—a vast improvement—and yet it simply isn’t good enough.

Health care, it seems evident, should be recognized as a human right (and if you disagree with me on this, best not to read further—we’ve got no grounds on which to debate). Every human being—including prisoners, terrorists, torturers, and Yankee fans—has the right to see a doctor and to be treated for illness, accident, and injury. Thus, every human being should have access to essential health care (including primary care) regardless of his or her ability to pay for it. But who guarantees that access? Who guarantees human rights? Certainly not markets, or the private sector. Clearly, it is governments who do this; it is an essential part of the social contract between states and their citizens. However, the way in which governments choose to guarantee those rights is more of an open question—in the case of health care, on the continuum between universal government-financed care and a system in which the private sector insures every citizen (a dream more fanciful than any Dan Brown novel), the possible proportional ratios of public to private coverage, and plans to achieve universal coverage, are virtually infinite.

The current American system, in which most Americans are covered by private insurers through employer-provided health plans and the government picks up significant slack for seniors (Medicare) and the indigent (Medicaid), is both anomaly and quirk. I am more interested in the former than the latter—unraveling how our system came to take the shape that it has would be instructive, but it is a diversion from my purpose. Forthwith the anomaly, oft repeated, but with good reason: The U.S. is the only “Western,” developed nation in which more than a negligible proportion of its citizens is without health insurance. Forty-five million Americans —45 million!—more than the combined populations of Portugal, Senegal, Bolivia, Sweden, and Mongolia—are a single untimely accident or illness from financial ruin. Among a surfeit of national shames—the death penalty, Guantanamo Bay, inner-city public education, Wall Street cupidity, Transformers: Revenge of the Fallen—a health care system that fails so many must rank near the top. The manifest dysfunction of the system is neatly encapsulated by a single fraction—one-sixth—the proportion of Americans without insurance, and the proportion of the nation’s economy given over to health care. Cost is the other head of this health care hydra. Without reducing costs, the effort to insure all Americans—a moral imperative—becomes hopeless.