Advocates of the public plan have compromised many times already, settling for the relatively weak plan that’s in the bill now on the Senate floor. And that measure seems to have more the support of more than fifty senators. In a world that were just--or even a world where the basic rules of democracy applied--that’d be the end of the story. Health care reform would pass, with that weakened but still recognizable public option still intact.
Alas, we don’t live in such a world. Instead, we live in a world where, thanks to the filibuster, it takes sixty votes to pass a bill. And thanks to the stubborn opposition of a half-dozen senators, the current proposal doesn’t have sixty votes. As a result, efforts to refashion the public option compromise continue, as they did over the weekend.
But that raises a key question: If liberals give yet more ground on the public option, what should they ask in return? So far, according to multiple Capitol Hill sources, liberals have been focusing primarily on the design of the public plan itself--that is, finding ways to make a further weakened version something that at least help fulfill the promise of the original idea.
Until very late last week, the most likely compromise along these lines was some form of the “trigger” proposal Republican Olympia Snowe first unveiled several months ago. Although the very word “trigger” has become nearly toxic, the idea actually had some merit. If constructed properly--a big if, yes--it could both impose more cost discipline on the health care system while building the foundation for a larger public option sometime down the road.
On Friday, though, Senate negotiators started talking about a new option. I wish I could tell you exactly what it is. But after talking about it with sources all weekend, I’m still not 100 percent sure--either because the details just aren’t fleshed out, the negotiators each have different notions of what the idea means, or I’m just not very good at processing what people are telling me.
What I do know is that it involves using the Office of Personnel Management to oversee some network of nationally based, non-profit plans. OPM is the department that runs the health insurance program for federal employees; as such, it has some experience (and expertise) when it comes to negotiating with insurance carriers.
How exactly the OPM’s set of plans would interface with the insurance exchanges reform would create--and why it would supposedly capture even some of the advantages of a public plan, remain a mystery to me. Jacob Hacker and Timothy Just, two experts on the subject, are both very skeptical. It's reasonable to wonder whether even some of the weakest proposals we’ve seen so far--like Snowe’s original trigger--would be better.
A lot obviously depends on the details. Maybe the new proposal contains added features that would allow it to drive down prices, introduce new efficiencies, and provide the type of security that a real public plan (even a weakened one) might.
But, if not, liberals ought to be doing something that, as Ezra Klein has noted, they don’t seem to be doing now: Using their concessions on the public option to demand improvements elsewhere in the bill. Off the top of my head, I could think of three good ones:
Improve the subsidies and/or affordability protections. Relative to the House bill, the Senate bill provides less overall financial assistance to people buying insurance. It also guarantees less comprehensive insurance. The Senate bill settled on its numbers in order to reduce the size (i.e., the price) of the overall bill. But if it were willing to put just a little more money on the table, it could bring the subsidies and affordability closer to the House levels.
Let states go early. One of the bill’s biggest flaws, as policy and politics, is the long delay between enactment and implementation. The Senate moved its implementation date back one year--to 2014--in another bid to save money. Princeton sociologist and health policy expert Paul Starr has suggested making federal funds available to those states that are prepared to start their insurance exchanges earlier. Doing so would give people assistance--and a reason to believe in reform--a lot more quickly.
Go back to industry to get more money. It’s pretty clear that the drug industry got off easy in its deal with the Finance Committee and the White House. The Senate could revisit that arrangement--and the hospital industry deal, too. It could also ask the device industry to put more money on the table. In each of these cases, revising the existing deals could produce legislation that not only frees up money but also speeds improvements to the health care system itself.
The obstacle to doing the first two is money. Within the Senate, there’s strong opposition to putting more spending on the table--in part because of President Obama’s statement, during his September speech, that a health reform should cost around $900 billion. (That statement looks worse and worse every day.) But the statement was vague enough to allow some wiggle room--and, besides, revisiting the industry deals would yield new savings, which would free up more money.
Of course, all of this assumes liberals can extract a deal--that the Ben Nelsons, Joe Liebermans, and Olympia Snowes don’t hold all the leverage. But liberals aren’t completely powerless here. At the end of the day, even the centrists seem to grasp the wisdom of passing a bill, if only for the sake of vindicating Congress' ability to solve a major national problem.
Since the centrists going to score a big victory no matter what, they might be willing to give a little ground--if not on the public plan itself, then on one of these other issues. But we'll never find out if the liberals don't ask.
Update: Speaking of Ezra, he's got a fleshed-out explanation of the OPM option--as well as word that progressives are, in fact, starting to broaden the discussion. He's also hearing (as am I) that the idea attracting the most attention right now is allowing older workers to buy Medicare coverage. It's a very good idea that really would offer at least some workers--those over 55, if it's like past proposals--the opportunity to enroll not in a public plan but the public plan, namely Medicare. (Two key questions: Would workers be eligible for subsidies to offset the cost; if so, when?) Staff for the so-called Team of Ten, a liberal-conservative group of Senators meeting to hash out this deal, were supposed to convene this morning, with the members scheduled to meet again this afternoon. So stay tuned.
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COMMENTS (6)
Atul Gawande has an interesting article in the latest issue of The New Yorker, in which he analogizes health care reform to the agriculture reforms adopted many years ago (and reforms that continue to be adopted today). Dr. Gawande argues that with health care, as with agriculture, there is no magic bullet for reform, that reform is a process not an event, and that the Senate bill's strength is that it includes many alternatives (i.e., pilot programs) that could, could, dramatically increase efficiency and quality at a much lower unit cost. He offers an interesting parallel. In 1900, 40% of a family's income went to food costs, so the public, and Congress, was highly motivated to attemp ... view full comment
Atul Gawande has an interesting article in the latest issue of The New Yorker, in which he analogizes health care reform to the agriculture reforms adopted many years ago (and reforms that continue to be adopted today). Dr. Gawande argues that with health care, as with agriculture, there is no magic bullet for reform, that reform is a process not an event, and that the Senate bill's strength is that it includes many alternatives (i.e., pilot programs) that could, could, dramatically increase efficiency and quality at a much lower unit cost. He offers an interesting parallel. In 1900, 40% of a family's income went to food costs, so the public, and Congress, was highly motivated to attemp reform, any reform. And so it should be with health care. I suspect many of the pilot projects (bundling being the most conspicuous) will prove promising. So even without a "robust" public option, the legislation has other, potentially more significant, provisions that could increase efficiency and quality and lower unit costs, so let's not become too wedded to one provision, the public option, and lose sight of the rest. When viewed from this perspective, perhaps the "trigger" is the best approach to the public option.
Couple thoughts:
1. How is Hacker an "expert" on the subject? In his seminal article on the public option, he wrote that Medicare rates are "negotiated"-that the Fed uses its purchasing power to secure lower payments to doctors and hospitals. He's simply wrong-legislation attempts to keep those provider payments low through formula which Congress simply overrides.
2. If the exchange was properly designed-operating as a pool (like the FEHBP), exchange premiums would be less. Haven't reseached yet-but FEHBP must secure 10% or lower premiums for the Federal employees
3. GOP offered a plan-tort reform and interstate policy sales-which reduced premiums under CBO scoring by 5 ... view full comment
Couple thoughts:
1. How is Hacker an "expert" on the subject? In his seminal article on the public option, he wrote that Medicare rates are "negotiated"-that the Fed uses its purchasing power to secure lower payments to doctors and hospitals. He's simply wrong-legislation attempts to keep those provider payments low through formula which Congress simply overrides.
2. If the exchange was properly designed-operating as a pool (like the FEHBP), exchange premiums would be less. Haven't reseached yet-but FEHBP must secure 10% or lower premiums for the Federal employees
3. GOP offered a plan-tort reform and interstate policy sales-which reduced premiums under CBO scoring by 5 to 10% across the board. Why not combine these ideas, allow catastrophic policies (great WSJ article recently from New Yorker-saying his cheapest alternative was $13,000 yearly (New York is a guaranteed issue and community rating state), but he bought catastrophic insurance only for $2,000, and can use the $11,000 saved to pay for doctor visits), then do the Dem thing: expand Medicaid, require guarantee issue/community rating and subsidize some Americans in the middle? Wondering if this compromise could get the bill done, like, now?
4. In succeeding article, Expert Hacker says: "forced to buy coverage from the private plans that got us into our present mess"-huh? This may simply be due to your annointment of him as an expert, when, he's simply a political scientist and not an economist. CBO has said-premiums in public option will be same as in private plans. Obama's advisors Orhzag and Zeke Emmanuel have said that the reason America spends so much more on health care is due to the early and broad adoption of new medical technology (procedures, equipment and drugs).
5. Why do you still ignore that Medicare's lower reimbursement rates (25% on average) to providers lead to cost shifting to the rest of us? I'm happy to absorb it-it helps our seniors-but Hacker and the rest of you wish to substantially increase this cost-shifting. In addition, at some point in time, with those lower Medicare rates, you threaten the earning of the doctors and hospitals in this country.
Hi lobosven - if you'll forgive me for skipping some of your points due to having something else to do, I'll take a stab at three:
(3). Tort reform (as enacted in a number of southern states) has conspicuously failed to reign in any costs. I'm not familiar with the CBO scoring of the GOP proposal so I don't know what else is in the proposal, but since malpractice insurance is only a significant cost for a small number of specialties (notably obstetrics) its unsurprising that capping payouts doesn't really change much at a macro level. Malpractice insurance costs have not shown up as a significant cost in any of the studies I have looked at, as attractive as bashing trial lawyers may be to ... view full comment
Hi lobosven - if you'll forgive me for skipping some of your points due to having something else to do, I'll take a stab at three:
(3). Tort reform (as enacted in a number of southern states) has conspicuously failed to reign in any costs. I'm not familiar with the CBO scoring of the GOP proposal so I don't know what else is in the proposal, but since malpractice insurance is only a significant cost for a small number of specialties (notably obstetrics) its unsurprising that capping payouts doesn't really change much at a macro level. Malpractice insurance costs have not shown up as a significant cost in any of the studies I have looked at, as attractive as bashing trial lawyers may be to the GOP.
The problems with interstate-based policies are well known and have been discussed at length here. Unless you propose removing all state regulators and replacing them with a federal one (not a bad idea, but also not in the GOP plan IIRC) then the burden would be on someone to demonstrate why those concerns are unfounded.
As for "Wondering if this compromise could get the bill done, like, now?" - uh, no. The number of compromises and "conservative" ideas in the bill are legion, yet the GOP is as intransigent as ever. Lack of cooperation on the Dems part, for one of the signature campaign issues they took to the electorate in the 2008 campaign does not appear to be the obstacle here.
4) Orzag and Emmanuel are clearly being selective here so as not to alienate the rather delicate array of special interests they currently have lined up either in favor or at least not actively opposing reform. Lets face it - any savings are someone's loss of profit.
There are a very large number of factors that contribute to the high costs of health care in the US in addition to new procedures and technologies (not all of which have any evidence which advocates their use don't forget), and they can easily be found if one looks. A sample would include
Fee-for-service rather than salaried staff
Complete lack of consumer oriented market fundamentals including an utter lack of transparency of costs to the customer
Presence of uncontrolled rent-seeking market place behaviour
Unintended consequences of the government decision to boost the supply of physicians - instead of driving prices down through competition, the criteria for performing services goes down as physicians compete with one another.
Widespread lack of information regarding comparative costs and efficacy of approaches by those prescribing them
Higher use of high profit out-patient services than comparable countries
5) See "fee-for-service" model where most physicians are not employees of the facility they work at.
Thanks for thoughts.
Tort reform: I've read two (2) studies which put combined costs of malpractice premiums and defensive medicine at $200 billion annually. CBO scores at $5 billion or so annually. I do know average malpractice premium is $60,000 nationwide (versus almost nil in Europe). I disagree on impact of tort reform-my brother-in-law changed parties (from GOP) in Florida when tort reform hit his PI practice significantly. I can also point to states with reforms who report significant decreases in malpractice premiums and stopping the fall in, then increasing, the doctors practicing in the state.
Your sample seem to explain very little: all of Europe is fee-for-service ... view full comment
Thanks for thoughts.
Tort reform: I've read two (2) studies which put combined costs of malpractice premiums and defensive medicine at $200 billion annually. CBO scores at $5 billion or so annually. I do know average malpractice premium is $60,000 nationwide (versus almost nil in Europe). I disagree on impact of tort reform-my brother-in-law changed parties (from GOP) in Florida when tort reform hit his PI practice significantly. I can also point to states with reforms who report significant decreases in malpractice premiums and stopping the fall in, then increasing, the doctors practicing in the state.
Your sample seem to explain very little: all of Europe is fee-for-services, I don't think Europeans "shop" for care (as it is mostly free), understand rent-seeking (but is a 3% profit margin at the insurance industry that significant?), I think Europe, in general, is comparable to US in physicians per capita (albeit, true, here, there are more specialists-which, I think, I'm happy to find), widespread lack of information (it doesn't exist in Europe either-if it did, it would be quite easy to ask for it or buy it) higher use of outpatient (huh-France has more hospital beds per capita and higher per capita hospital night stays than the US-I think same is true in Japan). Those aren't the answers.
I know that some clinics have salaried employees-with lower costs-but some are now refusing Medicare/Medicaid patients and many of them are supported by reputation-based charitable contributions (not easily replicated throughout the US).
I find much as I look quite deeply.
I'd say there are two other $200 billion contributors (to the per capita cost differences): salaries (our doctors and our nurses make from 2 to 3 times as much as average in Europe, in addition, with much higher GDP, their support staffs and hospital non-medical workers make much more than in Europe) and overhead (insurance company, doctor office and hospital) to administer the system. I think, also, another $100 billion more or less is due to drug policies-in Europe the adoption and distribution of modern drugs is delayed and controlled and they negotiate prices (earning deep discounts).
Take care.
Hi lobosven -
Couple of points: It is bogus to conflate the costs of premiums and defensive medicine. While it may appear logical that one follows the other, "defensive" medicine is practiced for a number of reasons (generates business, keeps patients who will go elsewhere, maintains reputation even if liabilities are capped). I don't have a cite handy, but from memory insurance premiums are less than 1% of healthcare costs, and have risen dramatically slower than overall costs over the last 20 years. So even if all insurance costs disappeared tomorrow, the relatively trivial savings will vanish quickly as other costs continue to explode.
Secondly, those who claim that tort reform will sav ... view full comment
Hi lobosven -
Couple of points: It is bogus to conflate the costs of premiums and defensive medicine. While it may appear logical that one follows the other, "defensive" medicine is practiced for a number of reasons (generates business, keeps patients who will go elsewhere, maintains reputation even if liabilities are capped). I don't have a cite handy, but from memory insurance premiums are less than 1% of healthcare costs, and have risen dramatically slower than overall costs over the last 20 years. So even if all insurance costs disappeared tomorrow, the relatively trivial savings will vanish quickly as other costs continue to explode.
Secondly, those who claim that tort reform will save money need to demonstrate how the savings effected will be passed onto the consumer, and why this has not occurred in California ($250k cap dates to the 70s), Texas (which more recently enacted a $250k cap) (http://www.dallasnews.com/sharedcontent/dws/bus/columnists/jlanders/stor...) and why cost increases in Mass. (which has only ever allowed a narrow range of claims by statute) are not greatly lower than the rest of the country.
How can this be? It is a good question, but the answer unfortunately appears to lie in one of my points above (Presence of uncontrolled rent-seeking market place behaviour)(http://www.boston.com/business/articles/2005/06/01/rising_doctors_premiu...)
Re fee-for-service: Some European countries use this, and some have salaried doctors (see the Nordic countries). However they often have cost controls or at least incentives going through a central body (the hospital or government etc) rather than charging the patient directly (which obviously is at least an incentive for over-servicing). I don't have a great solution to this offhand myself, but it is clearly one of the problems that we have.
As for the delay in drug-adoption: For your argument to hold, you have to assume that every and each new drug, upon release, is better than anything else on the market. This is demonstrably not the case, and if the Europeans (and Australians and Japanese etc) take some more time to look for real evidence, more power to them. While I'm sure there are cases to the contrary, I never recall lack of access to clearly effective new drugs being a major complaint in Australia, Germany or France.
Now clearly there are cases where specific medicines that do work better are slower to get to other countries. and the individuals that suffer from ailments that these could treat are worse off. However, those specific cases are very much a small part of the drug cost picture and immediate access to them (identification remains a problem, but thats a different issue); abuse of prescription drugs is widespread in this country, and there continues to be more embarrassing findings that many of them don't work better than sugar pills in control groups. So what are we paying for here?
Oh, and of course, in addition to showing any actual savings, those who advocate tort reform also need to demonstrate what we gain for losing common law protection against negligence.
Is $250k enough to compensate you for losing your sight, functions of your body, limbs or reproductive organs?
Oh, and of course, in addition to showing any actual savings, those who advocate tort reform also need to demonstrate what we gain for losing common law protection against negligence.
Is $250k enough to compensate you for losing your sight, functions of your body, limbs or reproductive organs?