I believe that a (strong, empowered) public option is attractive, from a policy perspective, for two main reasons: (1) it can provide a relatively more affordable option for those affected by the coverage mandate and (2) it can help with cost control in the system generally. I do not think that a public plan is necessary, in that these aims could be accomplished using a mix of other policy levers (all-payer rate setting, for example), but I do not see that other options with the potential for meaningful cost impact are on the table.

Elizabeth Docteur

On Wed, Oct 14, 2009 at 9:35 AM, Adam Oliver <[log in to unmask]> wrote:

Thanks for your posts. Very good. Helps me to understand a bit.

 

There seems to be a dichotomy between those who think a public plan is unnecessary and even politically unhelpful (e.g. Ted, Victor, Michael, Larry), and those who think otherwise (Tim, I think).

 


From: Anglo-American Health Policy Network [mailto:[log in to unmask]] On Behalf Of David Wilsford
Sent: 14 October 2009 14:16

Subject: Re: US Health Reform

 

Well, I’m thinking a Nobel Prize looks pretty good these days.
But I shall forgo the temptation to throw my hat into that ring.

I agree with Tim’s analysis (as well as Jonathon Cohn’s, who he cites), and with Ted and Michael.  The major points bear repeating, because we will be living with them once the final bill passes:

The premium subsidies are too low to make health insurance really affordable to lower and middle income Americans; the cost-sharing  is excessive and is likely to continue to drive sick Americans into bankruptcy; the feeble state-based exchanges created by the bill add little of value; the individual mandate penalty is too weak and will leave many Americans uninsured and out of the risk pool; and the co-ops are dead on arrival.

Unlike others, I do think that the major parts of the Finance bill will survice House/Senate conference, mostly due to the so-called Blue Dogs, who, no matter their vilification by the Kool-Aid left, are many of them running difficult reelections in moderate-to-conservative districts in the blink of an eye:  next year!  The Voodoo right will go after all these Blue Dog gals and guys with great force.

Yes, “we” will get a bill.  Another over-learned lesson of the Clinton 93/94 debacle is that the president and congressional Democrats believe that SOME bill must pass.  Some bill, any bill, any bill at all.   In this conviction has been lost the primary question about whether any bill at all, no matter its defects and dysfuctions, is truly better than no bill.

The final bill that we get will NOT constitute non-incremental reform of the system.  It WILL reward insurance companies and pharmaceutical companies, mainly by ensuring them large newly mandated markets, without any restructuring of incentive structures or any introduction of meaningful new competitive mechanisms to otherwise constrain pricing.  They are the big, big winners here.

The docs are protected by the bill, as well, because their payment systems go untouched, and their practice autonomy, such as they may currently have it, goes untouched.  So they are definitely not losers.   Hospitals, neither, seem to lose anything, especially after the ruckus they kicked up last week, which will scare off any remnants of wanting to do anything about their payment and operations structures.

In the aggregate, the financial results of the final bill will be two-fold:  
•  individuals will pay far more out of pocket for required insurance than they will think is reasonable, and they will vote their unhappiness, especially in 2012.  (Huge swathes of the population will also escape mandate altogether, one way or the other, so that the perversions of picking up their emergency room tabs will continue unabated.)  
•  The overall US GDP that goes toward health care will INCREASE rather than stabilize or decrease, and the RATE OF GROWTH will also increase, as a result of the final legislation.   This macro-outcome will begin to become evident as 2012 approaches.  

In the end, very few macro- or micro-incentive frameworks in this system will have been changed in any way whatever, meaning that covering more people will drain immense amounts of new money out of the system.   The US is already, far and away, the largest OECD spender on health care, in terms of GDP, with pointedly meagre results.  The gap in the spread between the US as the the largest OECD spender and the next largest spenders will only grow larger each year as a result of this bill.

The president’s goals have always been impossibly mixed:  increase access (this bill will do so partially) + restrain costs (this bill does not: in fact, it will significantly increase them).

So, as Ted rightfully points us back to the iron triangle in health care dynamics of access, quality and cost:  Access will go up a bit, but many will still be left out, either formally or effectively.  Costs will skyrocket, making us yearn for the days of only 16 percent GDP.   Quality – what America does best:  rescue medicine – will remain intact, with all its functions (really good) and dysfunctions (really terrible).

Yours
David




On 10/14/09 7:16 AM, "Oliver,AJ" <[log in to unmask]" target="_blank">[log in to unmask]> wrote:

It might be interesting to hear whether David, Tim, Joe et al. now stand on the likely success or otherwise of major US health care reform? Or you could always stay silent, I suppose – that way you might stand a good chance of winning next year’s Nobel Peace Prize.

Please access the attached hyperlink for an important electronic communications disclaimer: http://www.lse.ac.uk/collections/secretariat/legal/disclaimer.htm


--
David Wilsford Ph D
Professor of Political Science, George Mason University (Fairfax Virginia USA) and
Visiting Fellow, London School of Economics (UK)

[log in to unmask]" target="_blank">[log in to unmask]
French cell  +33.6.11.16.50.93
U.S. cell  +1.224.522.0111


Please access the attached hyperlink for an important electronic communications disclaimer: http://www.lse.ac.uk/collections/secretariat/legal/disclaimer.htm