August 26, 2009

Overselling the Public Option, Continued

Carroll Andrew Morse

On WPRO radio's (630 AM) John DePetro show this morning, Senators Jack Reed and Senator Sheldon Whitehouse advanced their position that "the public option" portion of healthcare reform, i.e. a government owned and operated insurance company, would be simply one additional insurance company added to the market, on equal footing with the already existing players.

However, in their answers to a Tim White question on Sunday's WPRI-TV's (CBS 12) Newsmakers program on whether the public option is essential to the Democratic plans for healthcare reform, both Senators seemed to suggest that a public option was not just another choice, but an entity that could achieve goals that private insurers couldn't…

Senator Jack Reed: What we'd like to do is have [the public option] there in place to provide the kind of integrated care, the kind of we hope sophisticated care that raises quality and lowers costs

Senator Sheldon Whitehouse: I think that the success of healthcare reform over time, particularly in terms of improving the quality of care, driving down costs, getting rid of some of the unnecessary waste and conflict and duplication in the healthcare system will be driven by these different public options in 50 different states, finding ways to improve the way that they deliver care…

Aren't there are obvious problems with simultaneously claiming that the public option will be just like the other insurers, yet will also have impacts beyond those of "regular" insurance companies, having significant effects on the practice of medicine?

The idea of the public option being a new source of medical innovation doesn't make immediate sense -- and you don't have to assume noble motives on the part of private insurers to see this. If the public option is truly just another insurance company, except for being owned and operated by the government, then the assumption that it will open the doors to cost-lowering quality-improving innovation is based on the idea that it will do things that private insurers could do, but won't. Er, because private insurers have no interest in lowering costs? If there are ways for private insurers to significantly lower medical costs in the existing employment-based system, why wouldn't private insurers already be doing them (if only to increase their profits, by not passing all or any of the savings along to their customers)?

The contradiction illustrates how much of the argument for "a public option", right now, seems to be based more than anything else on the idea that the problems in American healthcare can be solved by an insurance company that tells doctors and nurses how to be better doctors and nurses -- as long as the insurance company is run by the right people, of course. If the public is to believe that that desire for "a public option" is not driven by unrealistic expectations that government involvement can fix anything, and that it is not a stalking horse for much more intrusive government involvement into medical decision making, advocates for a "public option" need to start resolving their contradictory claims about its structure and the presumed impact it will have on healthcare practice beyond just the dynamics of the insurance market.

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I lived with the British health system for many years. It was great for such thins as a cold , headache, etc but a disaster for the big problems.
Jim Cavanaugh

Posted by: Jim Cavanaugh at August 26, 2009 1:06 PM

Parse your ass off. Wiggle and squirm and shout and cry. Weep and gnash your teeth. A public option is coming. It's an idea that is years overdue, and the majority of us want it. It is one of the reasons that we have an Obama presidency. You are shouting in a wind tunnel.

Posted by: OldTimeLefty at August 26, 2009 2:35 PM

OTL, thanks for reminding us why 52% of American didn't realize that Obama would be a disaster.

Now they will reap their punishment for their adulation of the Second Coming.

Posted by: Roland at August 26, 2009 4:37 PM

It is truly sad to see somebody such as OTL taking such joy in violently coercing peaceful people into paying for services they do not want or need.

Posted by: Dan at August 26, 2009 4:50 PM

Shameful. Every single statement they make is a lie. But will the state-owned media call them out on it? Hardly. The ProJo is running editorials that could be written by the senators (whose own material is probably written by Axelrod).

Posted by: BobN at August 26, 2009 5:34 PM

You'll have to show me where anything that I've said is "taking joy in violently coercing peaceful people into paying for services".

Majority will rule on this, so do and say what you will, you'll have to accept what's coming as law of the land.

Try to at least tangentially touch reality before you write anything. Far from joy at your ignorance, I am saddened by it. I hope you come up to the truth someday in the not too distant future.

Posted by: OldTimeLefty at August 26, 2009 10:11 PM

"getting rid of some of the unnecessary waste and conflict and duplication in the healthcare system"

Involvement of the federal government will accomplish this? The federal government?

Posted by: Monique at August 26, 2009 11:30 PM

Majority will rule on this, so do and say what you will, you'll have to accept what's coming as law of the land.

A majority of Democratic Congresspersons will rule on this.

There's a distinct difference, and 2010 will prove it.

Posted by: EMT at August 26, 2009 11:32 PM

NO CO-OP'S! A Little History Lesson

Young People. America needs your help.

More than two thirds of the American people want a single payer health care system. And if they cant have a single payer system 77% of all Americans want a strong government-run public option on day one (86% of democrats, 75% of independents, and 72% of republicans). Basically everyone.

According to a new AARP POLL: 86 percent of seniors want universal healthcare security for All, including 93% of Democrats, 87% of Independents, and 78% of Republicans. And 79% of seniors support creating a new strong Government-run public option plan, available immediately. Including 89% of Democrats, 80% of Independents, and 61% of Republicans, STUNNING!! Senator Max Baucus, You better come out of committee with a strong government-run public option available on day one.

The History:

Our last great economic catastrophe was called the Great Depression. Then as now it was caused by a reckless, and corrupt Republican administration and republican congress. FDR a Democrat, was then elected to save the nation and the American people from the unbridled GREED and profiteering, of the unregulated predatory self-interest of the banking industry and Wallstreet. Just like now.

FDR proposed a Government-run health insurance plan to go with Social Security. To assure all Americans high quality, easily accessible, affordable, National Healthcare security. Regardless of where you lived, worked, or your ability to pay. But the AMA riled against it. Using all manor of scare tactics, like Calling it SOCIALIZED MEDICINE!! :-0

So FDR established thousands of co-op's around the country in rural America. And all of them failed. The biggest of these co-op organizations would become the grandfather of the predatory monster that all of you know today as the DISGRACEFUL GREED DRIVEN PRIVATE FOR PROFIT health insurance industry. And the DISGRACEFUL GREED DRIVEN PRIVATE FOR PROFIT healthcare industry.

This former co-op would grow so powerful that it would corrupt every aspect of healthcare delivery in America. Even corrupting the Government of the United States.

This former co-op's name is BLUE CROSS/BLUE SHIELD.

Do you see now why even the suggestion of co-op's is ridiculous. It makes me so ANGRY! Co-op's are not a substitute for a government-run public option.

They are trying to pull the wool over our eye's again. Senators, if you don't have the votes now, GET THEM! Or turn them over to us. WE WILL! DEAL WITH THEM. Why do you think we gave your party Control of the House, Control of the Senate, Control of the Whitehouse. The only option on the table that has any chance of fixing our healthcare crisis is a STRONG GOVERNMENT-RUN PUBLIC OPTION.

An insurance mandate and subsidies without a strong government-run public option choice available on day one, would be worse than the healthcare catastrophe we have now. The insurance, and healthcare industry have been very successful at exploiting the good hearts of the American people. But Congress and the president must not let that happen this time. House Progressives and members of the Tri-caucus must continue to hold firm on their demand for a strong Government-run public option.

A healthcare reform bill with mandates and subsidies but without a STRONG government-run public option choice on day one, would be much worse than NO healthcare reform at all. So you must be strong and KILL IT! if you have too. And let the chips fall where they may. You can do insurance reform without mandates, subsidies, or taxpayer expense.

Actually, no tax payer funds should be use to subsidize any private for profit insurance plans. So, NO TAX PAYER SUBSIDIES TO PRIVATE FOR PROFIT PLANS. Tax payer funds should only be used to subsidize the public plans. Healthcare reform should be 100% for the American people. Not another taxpayer bailout of the private for profit insurance industry, disguised as healthcare reform for the people.

God Bless You

Jacksmith — Working Class

Twitter search #welovetheNHS #NHS Check it out


Senator Bernie Sanders on healthcare (

American HEROES!! :-) Click replay to play


Posted by: jacksmith at August 27, 2009 3:23 AM

This is probably a futile exercise in trying to bring reason to the health care debate, but here is a congressional testimony to the Senate Commerce Committee given by Wendell Potter, a former senior executive in the health care business.

Mr. Chairman, thank you for the opportunity to be here this afternoon.
My name is Wendell Potter and for 20 years, I worked as a senior executive at health insurance companies, and I saw how they confuse their customers and dump the sick – all so they can satisfy their Wall Street investors.

I know from personal experience that members of Congress and the public have good reason to question the honesty and trustworthiness of the insurance industry. Insurers make promises they have no intention of keeping, they flout regulations designed to protect consumers, and they make it nearly impossible to understand—or even to obtain—information we need. As you hold hearings and discuss legislative proposals over the coming weeks, I encourage you to look very closely at the role for-profit insurance companies play in making our health care system both the most expensive and one of the most dysfunctional in the world. I hope you get a real sense of what life would be like for most of us if the kind of so-called reform the insurers are lobbying for is enacted.
When I left my job as head of corporate communications for one of the country’s largest insurers, I did not intend to go public as a former insider. However, it recently became abundantly clear to me that the industry’s charm offensive—which is the most visible part of duplicitous and well-financed PR and lobbying campaigns—may well shape reform in a way that benefits Wall Street far more than average Americans.
A few months after I joined the health insurer CIGNA Corp. in 1993, just as the last national health care reform debate was underway, the president of CIGNA’s health care division was one

The average family doesn’t understand how Wall Street’s dictates determine whether they will be offered coverage, whether they can keep it, and how much they’ll be charged for it. But, in fact, Wall Street plays a powerful role. The top priority of for-profit companies is to drive up the value of their stock. Stocks fluctuate based on companies’ quarterly reports, which are discussed every three months in conference calls with investors and analysts. On these calls, Wall Street looks investors and analysts look for two key figures: earnings per share and the medical-loss ratio, or medical .benefit. ratio, as the industry now terms it. That is the ratio between what the company actually pays out in claims and what it has left over to cover sales, marketing, underwriting and other administrative expenses and, of course, profits.

To win the favor of powerful analysts, for-profit insurers must prove that they made more money during the previous quarter than a year earlier and that the portion of the premium going to medical costs is falling. Even very profitable companies can see sharp declines in stock prices moments after admitting they’ve failed to trim medical costs. I have seen an insurer’s stock price fall 20 percent or more in a single day after executives disclosed that the company had to spend a slightly higher percentage of premiums on medical claims during the quarter than it did during a previous period. The smoking gun was the company’s first-quarter medical loss ratio, which had increased from 77.9% to 79.4% a year later. To help meet Wall Street’s relentless profit expectations, insurers routinely dump policyholders who are less profitable or who get sick. They also dump small businesses whose employees’ medical claims exceed what insurance underwriters expected. All it takes is one illness or accident among employees at a small business to prompt an insurance company to hike the next year’s premiums so high that the employer has to cut benefits, shop for another carrier, or stop offering coverage altogether – leaving workers uninsured.

Wendell Potter’s testimony goes on for 9 pages. You can read it in its entirety at Testimony

Posted by: OldTimeLefty at August 27, 2009 8:05 AM

P.S. The reference through "Testimony" didn't take. You can cut and paste this for full reference to Potter's testimony:

Posted by: OldTimeLefty at August 27, 2009 8:14 AM

Let's everybody chillax. There's no room for gloating one way or the other.
I take no pleasure in people having problems with health care, and have nothing but contempt for anyone who does. Same goes for a couple of folk on this board who've expressed joy over people losing their jobs.

Posted by: rhody at August 27, 2009 9:51 AM

"I take no pleasure in people having problems with health care"

And the converse, in a way. If I feel bad about people with health care problems, I'll give some money to a charity, or St. Judes, or the like.

My biggest problem with single-payer, or public-option, is that it really represents the Democrats paying for their charity with my money.

Posted by: para at August 27, 2009 1:10 PM
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