Friday, September 11, 2009

The Truth About the Public Option for Health Care


Thanks to Sara
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4 comments:

James Bruce McMath said...

We are shooting ourselves in the foot with this public option stuff. You can't sell it. It is not necessary to get the benefits of a single payer system you simply have to adequately regulate the multi payers system. It is an American solution that should be politically viable. Public option is a death sentence to the insurance industry and they not surprisingly are and will pull all the stops to defeat it and mislead the public in the process. Same thing happened with Hillary. This is an instance where the left is as dogmatic and the right. The left admires the european culture, views it - not without some basis - as superior. They feel and emotional need to imunlate what they admire. If you could sell it, it would be great but you can't and it is a distraction standing in the way of what is probably a better solution.

9:02 AM
Anonymous said...

I'm confused when the guy says that the public option is not paid for by the government. Who is paying for it? Personally, I am in favor of a public health system like that in Enlgand and most of Europe. EVERY American should be able to get health care. We should be taking care of our citizens, not making them choose between food, medicine, gas, etc. I have what many consider very good insurance, yet my copays for tests are ridiculous. I had to pay $131 for an ultrasound (my copay) the other day. Fortunately, we had the money to pay for it, but what about those who don't? Do we just tell them that they can't have the test because they cannot pay for it? Our health system is a joke! Doctors need to be the ones to determine if a test or medication is necessary, NOT the insurance agencies. And as for the claims that we will lose our "choice," that's ridiculous! What choices do we have when they tell us which doctors we can see, where those doctors have to be located, and which tests they will or will not cover. Some choice!
a. earls

10:42 AM
MacGraham said...

With due respect to Mr. Bruce: Why should we allow profits to be made on health care? "You can't sell it," you say. Some things shouldn't be for sale, and health care is one of them. A truly civilized country wouldn't allow huge profits to be made from health care and wouldn't allow different levels of care for its citizens. We need a non-profit,tax supported system with the government determining fair recompense for health care providers and then paying them for that care. Let the insurance companies make their money in areas deemed less critical to the welfare of citizens.

8:20 PM
James Bruce McMath said...

MacGraham conflates the political sell with commercial sell. What "should be" is irrelevent if it can't be sold politically. He/she also evidences an age old prejudice of the left against profit, that iminates from a lack of understanding of it that results in a view that it represents an uncessary item of overhead.

True profit is inherent in the employment of capital whether the activity is public or private. Even a government program will employ capital. In the market place we allow those who employ capital to earn more than this base rate of return. To the extent that one can employ the elements of production to earn a profit above the bases economic cost of capital it is considered earned profit. In Adam Smith's view and world it was assumed that something of equal value was being imparted in exchange for this earned profit.

In our complex world unfortunately this is not necessarily so. In fact people have and do make profits without imparting a service of equal value and in fact the activity may be detrimental to the community interest. A fundamental function of government is to regulate the market place to eleminate such discontinuities.

In the case of our health care system the problem is that the carriers and other players are currently incentivised to pursue courses of action that do not serive the public health or the public interest. The profits they make to that extent are worse than overhead, they represent misdirected efforts that are counter productive.

A publicly defined but privately administered system can achieve all the benefits of a public definied and administered system and opens the opportunity to do things that will enhance public health that the government would find most difficult to to do. The key is to properly define the system and asign functions where they properly belong between the public and private sectors.

Rationing for example is uniquely a public sector process, to the extent it involves setting criteria and budgets. Private healt cariers are setting rationing standards but it is difficult because they are always seen as doing so in the pursuit of profits. This is not a place where profit motives are appropriate.

Contraywise, and again as example only, the government will find it hard to incintivise personal behavioral changes necesary to improving the public healt and reducing health care cost. In fact the most direct route to enhancing both is in addressing what we eat and what we do not how the health care is paid for. Yet, serious efforts to address and alter individual personal behavior will tend to be seen as scary big brother government action, if done by the public secotr, where as private administrative carriers can do it as part of creative cost control and marketing processes. The later being a great example of how "profit" could be earned and serve the public interest.

Dogma and emotion, left or right, are an impediment to solving this and every other chronic problem that we face. Our economic system is rife misalignments between incentives and the public interest. In order to address these progressives must articulate the base rational for an increased level of market place regulation so that the public can see this a both necessary and safe. Safe meaning that it does not represent a trend toward the government becoming a direct player in economic activities. Placing the governement in the role of administering the health care system directly raises a specter of socialism that is frightening to many people and undermines the political achievability of a rational system defined by the government but run by the private sector.

9:35 AM

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