Getting to a Public Option that Contains Costs: Negotiations, Opt-Outs and Triggers
The debate over a public option has essentially become a debate over the size and role of government in the health care system. The central argument, as we see it, should be one of fiscal conservatism—that a public option should play a role in addressing the very serious problem of health care cost containment. The current debate between the left and the right on this issue is obscuring the fact that consolidation in both the insurance and provider markets is propelling a higher rate of growth in health care costs. The consolidation of power, particularly in provider markets, makes it extremely difficult for insurers to negotiate rates for their services and contributes to rapid growth in health care costs. A strong public option is one that ties provider rates in some way to Medicare rates (though set at likely higher levels), and that is open to any individual or firm regardless of firm size. It would thus provide countervailing power to providers and help control cost growth.
We argue that a strong version is necessary because there is little else in health reform that can be counted on to contribute significantly to cost containment in the short term. Capping tax-exempt employer contributions to health insurance has great support among many analysts (including us), but it faces considerable political opposition. Proposals such as comparative effectiveness research, new payment approaches, medical homes and accountable care organizations, all offer promise but could take years to provide savings. Thus, the use of a strong public option to reduce government subsidy costs and as a cost containment device should be an essential part of the health reform debate.
We recognize that there is opposition to a strong public option. Both the House and Senate proposals are considering relatively weak versions to make the public option more acceptable. Both proposals would have the public option negotiate rates with physicians and hospitals. We see two problems with this. One is that negotiating rates is not simple and it raises difficult implementation issues; for example, with whom would the government negotiate? Further, negotiations are most likely to be unsuccessful with providers who have substantial market power. Since this is at the heart of the cost problem, a strategy of negotiations seems unlikely to be effective, as has been affirmed by cost estimates from the Congressional Budget Office.
The Senate has proposed a public option with an opt-out provision. This has the advantage of recognizing regional diversity in political philosophy by allowing states to pass legislation to keep it from being offered in their states. A disadvantage of this proposal is that it would exclude many who would potentially benefit from a public option. The states likely to opt out are likely to be those with high shares of low-income people and many uninsured.
The other alternative is to establish a strong public option but not implement it unless a triggering event occurred. The goal would be to allow the private insurance system to prove that it can control costs with a new set of insurance rules and state exchanges. The triggering events could be the level of premiums exceeding a certain percentage of family incomes or the growth in health care spending exceeding certain benchmarks. Since the public option would only be triggered because of excessive costs, however measured, we assume that a relatively strong version of a public option would come into play.
We recognize that taking a strong public option off the table may be necessary to enact reform legislation. But this will mean, at a minimum, higher government subsidy costs by not permitting a payer with substantial market power to bring cost containment pressure on the system. The outcome is likely to be that costs will continue to spiral upward. In effect, the nation would be relying on the range of promising pilot approaches to cost containment that would take some time to be successful. If they are not, we may be left with increasingly regulatory approaches, such as rate setting or utilization controls that apply to all payers. This would mean much more government involvement than giving people a choice of a low-cost public option that would be required to compete with private insurers.
I’m The Mad Hatter, as I explained in a previous post, and this is free-flowing cognitive-internet instant-publishing a.k.a. “blogging-for-nothing.”
For those of you who are highly against internet / blogger-net advertising let me tell you a little story:
I once wrote more than one very thought-out essays that were duplicated from my own websites and posted elsewhere on the web with no authorship included, and of course ads all over it.
I gave up on this notion of “internet purity” on that day.
Anything and everything you post on the internet you completely lose the rights to, end of story.
As long as I don’t have the rights to it I guess it really doesn’t matter if I fully “monetize” all my three-platform blogging. So far it’s been two out of three and I don’t really want to put ads on WordPress. I like the site just like that, but in all reality: “If you are not making at least some amount of money on this post you are being screwed.” That is, if you put a piece with any amount of work to it that is only backed by your personal credibility.
I had mixed feelings about being “word-jacked” at the time, and I still do.
I have spoken of a sense of “duality” about myself before. This whole issue expresses it well.
Part of me was angry, nobody will ever read something else of mine if they wanted to and only saw the duplicate, and the other part of me was pleased.
I am the “most imitated.”
Imitation is the highest of flattery.
Thank you, random internet spam-bot / scammer, you promoted my analytical essay on society and politics to a website that most likely obtains far greater hits than I do.
As to another topic, the topic in question here:
Why does Eric blog, anyway?
Surprisingly, I’m sure, it’s a dual-effort.
One part of me is on here to “just have fun” as my About describes on WordPress.
The other part of is sitting around going: “Hey! I have rarely spoken point of view and the inside-line on certain elements of hearsay and what have you. I gotta get out the word!”
The Afghanistan War should have been handled like a police action from the beginning and we should have been out within a year or two, and of course not invading Iraq in the first place. What we have now is this term “quagmire” I am sure we are all familiar with by now.
The Politics of War has to stop. The Politics of War-for-Profit might have taken a heavy blow with the absence of Republican John McCain in The White House and the re-naming of Blackwater to “Xe” but the peril remains in continuing to feed to war machine.
Something like that, probably.
Maybe my anecdotal tale of Lockheed-Martin military bunkers and firefighters and explosives and wildfires.
I’m not saying: “I rule.”
I’m saying: “Somehow I don‘t totally suck.”
I have been going through here and “enhancing” my blog-posts. Not taking things out, that’s not it. I have deleted one post, because I was so vague it was upsetting to me to actually read it. It was one of the first posts I did. I like to add links, correct typos / bad grammar o’ mine, rambling sentences, and images / video.
I would like to point out to fellow bloggers that we have a problem here: Nobody, and I mean nobody, goes backwards on the blogs. (I mean even I forget to go backwards and I love blogs!) It’s all running through the cyber-forest at top speed. It’s impossible to write nothing but trying-to-be-impressive-learning-stuff when something random you posted is just so damn interesting to people and nobody reads the items more to the nature of my thoughts on overseas conflicts. That’s my point, the credibility has to come first here in my case. Unfortunately so, since I am trying to expose false-credibility and bad business practices.
There are a rare pack led by Ezra Klein that have obtained a high level of credibility mainly by value of their online-work alone, but I present to you that these people may be some of the great minds of our times. The bar is far too high.
I have the utmost respect for Ezra Klein and his work. I have only neglected to “blogroll him” because of sheer laziness. His work in researching the health care bills should not be overlooked.
I am the soothsayer of the internet!
I spoke of “astroturfing” prior to Nancy Pelosi and prior to Keith Olberman attaching it in front of every word he says.
I didn’t say “astroturfing” but I couldn’t remember that term or the book in which I had read it before, so whatever.
I’m running Congress from my laptop over here! Does anybody know this!?!
Now you do!
I’m totally convinced that (not really) that major figures across the nation in media and politics are reading this blog on a regular basis!
You should too!
I hold the Liberal Movement is in palm, where I go they go.
They back me about Fox.
They back about astroturfing.
Before they go there, I have to go there first.
You know what I mean?
The “trend-setters” be known by their own arrogant volition.
It’s writing practice. I have a few novels on the back-burner. When I just completely stop blogging for awhile it’s probably because I am writing a lot.
Those pieces of writing I posted on Open Salon are what I call: “dead ends.”
That’s the “real-life” response when I am asked this question.
I am just practicing my writing and at first everything went online and now if I do something really good I probably shouldn’t post it and just hang on to it.
Some pf the stuff I am working on behind the scenes is that which is designed to be very “internet-draft” but still well composed and substantial.
I saw an ad in Harper’s Magazine that caught my eye and I apply the concept to blogging rather than news magazines:
“100% Content Free”
How much of blogging is just “content over substance” and do we give proper regard to those who have substance?
I merely pose the question without pointing any fingers or giving any examples of low-credibility internet publishing.
I’ve always invited people to “fact check me” as Monique C. did when I made the declarative statement that “tea party people did not vote in 2008.”
I believe I still have neglected to reply due to internet-swamping but she was right to point out that I have no statistics.
I don’t. I also say in the body of the blog where I am basing it off of though: people who are either blogging under their own credibility on the right wing or those who espouse on open forums like talk radio / internet domains.
So it is just an assertion of mine and she was right to point out that I probably should have just said upfront that I have no figures or numbers of any kind to back it up, it’s complete web-punditry.
I dunno. I proposed a health care bill over here … I mean, I feel like writing one out just so people can see it’s not magic fairies from pixie-land. It’s called “legislation,” and for some strange reason I can read it.
Strange places this blogging journey is taking me.
Editorializing … everything!