I have been considering how to post on Leana Wen’s more recent Washington Post column for some time. Here’s its opening passage:
Critics of the U.S. health-care system, attempting to capitalize on the fury Americans have expressed toward insurance companies since the targeted killing this month of UnitedHealthcare CEO Brian Thompson, have renewed calls to rethink how the United States pays for care. Some, for example, have returned to the idea of single-payer health care, which would eliminate the need for private insurance.
Such a complete overhaul is not realistic for the foreseeable future. But one idea is worth revisiting: creating models that offer alternatives to for-profit insurers.
This is not a new idea. The original version of the 2010 Affordable Care Act contained a public option — a health plan run by the government — to compete with private insurers. Lobbyists succeeded in getting the provision nixed, though Democrats managed to secure a last-minute compromise: a new nonprofit health insurance entity, called a Consumer Operated and Oriented Plan, or co-op.
Nearly 150 co-ops were opened following passage of the Affordable Care Act. All but three have failed. The explanations for that failure that Dr. Wen considers are:
- The funding provided to them under the ACA was insufficient
- Onerous regulations including prohibitions against using their government funding for advertising and being blocked from signing up large companies
- Low enrollment
Here’s Dr. Wen’s peroration:
So what now? Beilenson, though he has long supported a single-payer system, doesn’t believe abolishing insurance companies is realistic. But he is optimistic that there could be renewed energy to reengage around the public option — or to make another attempt at co-ops, though without all the obstacles that made them near-impossible to operate the first time around.
The idea isn’t new as anyone who has seen Dr. Kildare Goes Home (1940) will realize. The idea for the group set up by Dr. Kildare in his home town is based on Ross-Loos, the first health maintenance organization (HMO). After a series of mergers and acquisitions it eventually transmogrified into Caremark Rx.
I suspect there may be other reasons for the failure of the co-ops including:
- Although it is not unethical physicians are disinclined to advertise prices
- The incentives do not support cost containment
- Such plans interfere with physician autonomy (so does corporate medicine)
I’m open to suggestions of other reasons. The bottom line is that without some external force to change the healthcare system costs will simply not be contained and prices will continue to rise at an unaffordable pace. Don’t look to the federal government to provide that external force. There is a demonstrated lack of will there, cf. SGR.
I’ve never understood the govt single payer option. As if all the virtuous, efficient people go into government healthcare, but the Pentagon (often criticized by the very same people who advocate govt medicine) gets all the greedy, inefficient people.
It ignores the realities of organizational dynamics. Without the elements of competition and profit motive we know what happens. How is public education doing? Social Security makes Enron execs look like pikers.
I still maintain, Dave, that you had your finger on it. No one has good incentives. Consumers think health care is free, and a maintenance, not insurance, program. Drives demand. Providers have horrific considerations. “Proper” care (whatever that is) vs economics vs consumers who will walk or sue. The insurers are in constant battle to avoid fraud and unwarranted care. Mistakes will be made.
And overlaying it all are politicians who make the worst, self serving, decisions of all.
I simply don’t buy the notion that medicine is “special” and is better handled government or a full third party pay system.
Another fine mess.
Healthcare costs are an incredibly difficult and complex problem. First, we need to fully define costs. The one used in most analyses is the dollars spent. This is only part of the cost. Other costs include: wait times at the healthcare provider, travel time and costs, time spent arguing with insurance companies, and diminished opportunities while waiting for healthcare. One example that sticks out to me is the unmeasured costs following my wife’s stroke twelve years ago. There was a speech therapist 0.5 miles from the house. Instead, the Aetna in network speech therapist was 25 miles from home. This squandered my time, exhausted my wife making therapy less effective, then despite prior authorization, they rejected my claims requiring hours on the phone. If i had it to do over, I would have paid out of pocket for the nearby therapy. One problem with this is that there are two pricing structures for healthcare – insured and uninsured. Sometimes these prices can be 10X different.
I firmly believe many of the problems with healthcare derive from unintended consequence of good intentions by the government. How do you eat an elephant? One bite at a time. Here is a list of things I would support the government doing to abolish a lot of perverse incentives and moving costs to the wrong people:
1) Allow states to charge deductibles and co-pays for Medicaid. A friend worked as a PA at a Hospital. People on Medicaid would come to the emergency room for minor ailments even though there was a walk-in clinic across the street. There was no financial incentive for them to go to the clinic instead of the ER.
2) Abolish HIPAA. This is a time wasting heap of bureaucratic BS that increase costs.
3) Allow companies to make payments to a larger HSA account to allow the purchase on individual insurance plans. This breeds competition among insurance companies. The Swiss have a vibrant private insurance market. Where I live, if I want a private health insurance plan, I can have any company I want as long as I want Blue Cross Blue Shield. No other company will write policies.
4) Make pricing for healthcare services universal and publicly displayed. People paying out of pocket should not have to pay 10X someone with insurance for the same service.
5) Eliminate sodas and snack food from EBT payments. People losing weight helps reduce medical costs.
I’m sure there are many more small bites we can make.
It would be easier done to eliminate the SNAP program entirely than to make exemptions for soda and snacks.
Food products companies hire lobbyists to write the rules and regulations for the bills they want, many of them former lawmakers or staffers. Their other job is to provide direction and incentives to individual congressional officeholders to ensure the bill’s passage in desired form.
Eliminating SNAP wouldn’t be the disaster that they would claim, would save a lot of money from a corporate subsidy.
But you know…..brides of the state.