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The only people "managed competition" in health care is good for: For-profits collecting fees

Too much moral purity, eh? Ooooh kaaaaay.

But more on that later. Meanwhile...

The problem with equating our private insurance companies with European private insurance companies, is that ours are investor-owned and profit-driven, while theirs are non-profit and, in essence, not much more than private companies that are hired to administer what is in most cases a de facto government-run single-payer system. The government tells them what they will cover and what they will charge people for that coverage, and most of that coverage is paid for with taxes.

The private "insurers" that Maggie Mahar admires here, Group Health Cooperative and Kaiser Permanente, are non-profit, true HMOs and are basically miniature versions of the National Health Systems of Spain and the UK, where the government [the taxpayers!] owns the hospitals and clinics and employs the doctors and nurses and so forth. We have that here in the US: the VA system [and no, Walter Reed is an Army hospital, not a VA hospital].

The much-admired Cleveland Clinic and Mayo Clinic also operate this way, non-profits that own their own facilities and hire their personnel on salary.

All of which argues that the very best way to deliver superb care and contain costs is to just nationalize the whole damned system, where the taxpayers own the hospitals and employ all the nurses and doctors.

After a lot of study, this has become my preferred solution: open up the VA system to everybody in the country [we'd probably have to rename it though]. The VA even has a working electronic health records system already in place, for those of you who are turned on by that sort of thing.

Not everybody is up for that radical a change though, and besides, I'm all for promoting small and medium-sized businesses, so I'm willing to compromise here.

Nationalizing the whole system [payers, providers, and facilities] is one far end of the spectrum of methods for providing health care [for convenience, we'll call it the left].

What we have right now is almost all the way at the other far end of the spectrum: totally privatized [we'll call this the right]. We've essentially established Medicare as our national high-risk pool, covering the elderly and disabled, as both are rather expensive groups that the private insurers don't want to have to pay for, but beyond that [and a few other imperfect safety nets such as Medicaid, state high-risk pools, etc], it's pretty much market-driven competition.

And this is where Barack Obama's plan, Max Baucus' plan, Jacob Hacker's plan, Ron Wyden's plan, Bill Clinton's plan, Hillary Clinton's plan, John Edwards' plan, [I could go on] fall down. The assumption in all these plans is that providers [doctors, dentists, hospitals, pharmacies, etc] are competing with each other for customers [patients] and that payers [insurance companies, and "a new public plan like Medicare"] will all be competing with each other for customers [individuals, employers].

The reality is that intra-group competition doesn't happen all that much. Your employer dictates who your insurer is, your insurer limits your choice of doctors / hospitals / pharmacies, and people generally pick the closest doctor from that list and go to whichever specialist or hospital that doctor sends them to.

Really, payers are in competition with providers, employers are in competition with payers, individuals are in competition with each other [for jobs] and with their employers [over who pays how much of the premium], and individuals who lack employer-sponsored coverage are in competition with payers.

To help various entities in this multi-sided argument compete with various other entities, we have:

  • benefits managers [hired by employers to negotiate with insurance companies, and to explain benefits to employees]
  • pharmacy benefits managers [to negotiate three-way with insurance companies, pharmacies, and drug companies]
  • radiation benefits managers [presumably they do the same thing as PBMs but with imaging centers instead of pharmacies and drug companies]
  • denial management companies [to help providers argue with payers]
  • patient advocates [to help individuals argue with payers]
  • utilization review and utilization management companies [iirc, they're hired by payers to check up on providers and patients both]

Plus, you can hire auditors to check up on all of the above. It's a terrific system for employing lots and lots of people and shoveling lots of $$$$$ throughout the economy, but it sucks at delivering health CARE.

Single payer and European-style multi-payer are both right smack dab in the middle: nationalized insurance and private providers. Single payer [fully-nationalized insurance] is a bit to the left of center, and European style [mostly-nationalized insurance] is a bit to the right of center.

Getting back to the moral purity argument... neither of these centrist positions is one of moral purity, but moving to one or the other of them is going to be essential for our survival.

Single payer has several advantages over European style:

  • less administrative complexity means lower costs [or more money available to be spent on actual care]
  • the US is a big country with a mobile population, and one plan with every provider "in network" means fewer hassles for travelers
  • why would anybody want to choose among plans and payers when we could all have the same plan and payer and just choose our providers?

As for losing groups like the Cleveland Clinic, the Mayo Clinic, Kaiser Permanente, and the Group Health Cooperative if we go to single payer, it's my understanding that under HR 676, such non-profit provider groups would still exist. I haven't called John Conyers' office and asked him about it though, so I could be wrong. Any volunteers?

/rant

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Caro's picture
Submitted by Caro on

This is what I wrote to my congressman two years ago:

Health insurance will be one of the first issues addressed by the new Congress [boy, was I wrong there!], and I think my idea for how to structure it has a good chance of appealing to some Republicans and perhaps, even, a newly (at least seemingly) chastened George Bush.

My idea will make health insurance more affordable without cutting out insurance companies altogether, which seems to be a step too few politicians are willing to make. I prefer a universal system, but since entrenched powerful interests are dead set against that, here's a possible compromise.

Insurance companies have made it perfectly clear that they don't want to cover people with catastrophic illnesses. So let's take those illnesses out of their hands altogether. Let's come up with a list of diseases to be covered by a standard package, maybe the list that the state of Oregon developed for its universal coverage. Insurance companies could bid on this package, with additional features (but not illnesses), and individuals and employers could choose the company that suits their needs the best.

This idea should bring down the cost of the basic package to an affordable level for most people. Those who can not afford it, however, should be covered by a combination of federal and state government contributions, as Medicaid is now. The same federal agency that provides free coverage for those who can not afford the insurance should allow individuals and businesses to participate by paying a monthly fee. In other words, that agency could act as an insurance company for those who want to obtain their health insurance in that way. If that provision is impossible to pass, then at least let those of us over the age of 60 buy in. We have a terrible time finding any insurance at all, and when we do it's prohibitively expensive.

Above the basic plan there could be a superinsurance fund. All who are covered (by their company, by themselves, or by the government) would pay into the super fund to cover catastrophic illnesses. This plan could be administered by an insurance company or by a government agency. The per-participant premium for this insurance would very likely be quite low if it were a nationwide program.

Members of Congress would gain a huge amount of good will from the public if they agreed to be covered by exactly the same plan as the rest of us, especially if you were to pay the premiums out of your salaries.

Submitted by hipparchia on

but now i'm convinced that not only would an incremental approach fail, but that now is actually a very good time to make the big leap.

we wouldn't have to cut out the insurance companies altogether, they could still sell supplemental insurance for the stuff that people's lives and health don't generally depend on -- cosmetic surgery, upgrading to a private room, etc.

thanks for writing to your congressman. writing my congresscritter and senators has been like tossing things into a black hole, but i keep trying. it's heartening to know that other people are doing it too.

Submitted by lambert on

This is a great, great post, and I'm not sure that what I wrote does justice to it. However, I am sure that the original headline -- "rant" -- did not.

Submitted by hipparchia on

well, if you'd seen how i was foaming at the mouth by the time i finished writing it, you'd have thought the original title apt, if otherwise unexciting.

confession: i really did consider titling this one something along the lines of lambert! help! this one needs a title! anything you renamed it was going to be better.

wrensis's picture
Submitted by wrensis on

We recently were advised by our Family Practice physician and his group that they were going to a "Personal Health Care Model" practice. You pay $2000 a year per person and they provide complete 24/7 coverage family practice health care. Yearly physical, lab work, If you are sick they meet you in ER and if you are in the hospital they will take care of you. It also included Emergency house calls and E Mail contact, . They suggested you keep your insurance for other speciality visits and procedures outside of family practice. This was to start on January 1, 2009. It also allowed you to file insurance claims for their visits but these would be payed on a non participatory physican basis with your insurance company. They would no longer treat medicare or medicaid patients, leaving patients scrambling for new physicians. When the physicans were questioned about how other practices in the area were responding, they said that physicans were delighted with the influx of patients and were happy to watch them to see if this system worked.

Because of my serious health problems we signed up and were happy that we could for the time being afford this choice. Mid December the Maryland State Insurance Commision got into the act and decided that practices of this type would need further regulation and they would have to determine what those regulations would be at a future date. They met on December 19th and nothing was decided. The practice was forced to abandon this plan and left many people who had made HFA or Flex Plan determinations based on the new plan with bad decisions. There are about 50 other existing practices in the state of Maryland that will be affected.

Beyond the confusion of the insurance coverages and companies we also have the problem of government regulation which will be even greater with any new systems. Given our present financial situation we all know how well government regulations work.
VA hospitals have for years been poorly staffed and provide questionable health care. The debacle of Walter Reed as an Army hospital is well documented. Corporations that promised retirees full coverage after retirement have take that coverage away. Whatever system we finally are saddled with will never totally eliminate the opporunity for physician, patient and regulatory abuse. It is naive to expect everyone to behave in good conscience.

The difference between a 30 minute time frame for a Family Practice physician is three times less that that of a specialist and yet it is the family practice physican who has the greatest opportunity to encourage good health. Incidently electronic health care records save countless hours treating a patient in ER and provide the necessary histroy for Emergency treatment. A heart attack three weeks after moving to this area was treated much more efficiently because they were able to download his prior history, medications and labs. This saves lives and ER time.

Submitted by hipparchia on

i feel for you, though mostly secondhand -- something like this has happened to a couple of other people i know.

sure, government-run institutions have their problems -- the republicans have done their damnedest over hte past 30 years or so to break as many parts of the govt as they could. one of the nice things about expanding medicare though, is that medicare is one program that even the republicans have been afraid to mess with [mostly].

more government regulation can be either a good thing or a bad thing. the securities market could have used a LOT more regulation, for instance. one of the problems with private insurance now, is that it's regulated by the federal govt and by state govts. expanding medicare would eliminate the need for state regulation. one of the other problems with private insurance is that their bureaucracies are not transparent. by comparison, govt bureaucracies are clean and clear as glass.

medicare as it exists right now just sort of evolved. parts a, b, c, and d weren't all created at once, they happened over several years. hr 676 would keep much of the basic structure of medicare [all the parts that work now] and essentially combine abcd [without that stupid doughnut hole] into one package, so that everybody in the country is covered by the same plan. doctors, hospital, drugs, mental health, vision, dental -- all covered.

the va health system was in horrendous condition several years ago, but they've been transformed into a pretty good more recently. it's been under more strain since bush sent everybody [repeatedly] off to fight two wars, while the republicans in congress did their best to cut funding for veterans [while screaming that it was democrats who hate the troops].

walter reed isn't even in the same system as the va hospitals. walter reed belongs to the army, which is notoriously uncaring about actual lives, and they had outsourced it to halliburton.

DCblogger's picture
Submitted by DCblogger on

is the conviction that while single payer is clearly the best solution we cannot do it. So people put it out into never never land.

The media have done a terrific job of concealing the strength of the single payer, that we have 93 cosponsors, that those cosponsors include 4 committee chairs.

Single payer has really picked up steam since I started posting it. It used to be that I had to hunt around to come up with material for a daily post, now I am flooded with material.

Please jump in and post whenever you see anything promising. Also, if you have not done so, please write a letter to the editor. Even it if is not published, flooding the newspapers with letters to the editor for single payer will mute the "its off the table" talking point. Also some will be published, and as of now, letters to the editor represent our best way to get the news out to the public.

Submitted by hipparchia on

like you say, even if they don't print them all.

and thanks for all your posts. i'd have missed that ask a question thing at change.gov if you hadn't posted on it.