Re: More Bought & Paid For: Blue Dog Boren Defends Private Insurers Against Public Plan

On Wed, 29 Jul 2009 21:46:54 -0400, Alan Lichtenstein <arl@xxxxxxxxx>
wrote:

Hal Hanig wrote:

"El Castor" <No_One@xxxxxxxx> wrote in message
news:ci31751d3rgv2umagpg6vg38fgdqvd55or@xxxxxxxxxx

On Wed, 29 Jul 2009 12:57:01 -0400, Jim Higgins
<gordian238@xxxxxxxxxxx> wrote:


Skip the public good, insurer's profits are paramount for Blue Dogs

More Bought & Paid For: Blue Dog Boren Defends Private Insurers Against
Public Plan
http://tinyurl.com/ldaqql

One of most recalcitrant Democrats in the health care debate said on
Wednesday that his skepticism about a public health insurance option was
driven by concern for the health of private insurers.

Appearing on MSNBC, Blue Dog Democrat Dan Boren of Oklahoma said that he
generally agreed that a government-run insurance program could
effectively lower costs for consumers.

"The problem," he argued, "is in a state like Oklahoma, where we have a
lot of private insurers, you have a public option come in and it drives
everything else out and the only thing left is the public option and
then you have rationed care."


That's a strawman argument. Those companies in the private sector cannot
exist UNLESS they stay in the market place and compete. Even when the
competition consists in part of a government agency offering a public
option, if they bail out and run for cover, they're the one's who are going
to be out of business, and I don't think that their shareholders will much
appreciate the way they've chosen to discharge their fiduciary obligations
to them. In reality, I think that at least some of those companies will
suck it up and do whatever they believe to be necessary in order to remain
in that marketplace and remain competitive. They may have to give up some
of the exhorbitant bonuses they've customarily provided to their management
or tighten some of the slipshop operational practices that they've allowed
to develop and have become comfortable with, but that'd be the price they'd
have to pay to stay in the game.

(Snip)

Hal


Actually, after a bit of introspection, I've come to the conclusion that
while our health care system is generally decent( assuming you overlook
the 45 million uninsured ), it happens to be expensive. Obama put his
finger right on the money when he said that and his objective is to
provide quality care for less. Our system is expensive because the
private system we now have tends to favor the most expensive options,
rather than other, cheaper, but equally effective options. Competition
with a government plan would cause them to backtrack on that. But when
revenues decline, so do profits, and as you point out, big payouts to
management. And with Medicare already having close to 30% of the
administrative overhead of the private plans( a number which is admitted
by Republicans, so we know it's on the money ), we see ample room for
improvement there.

So Obama is right; we need to control costs and the sooner we do it, the
easier and cheaper it will be.

One of the principle ways Obamacare will control costs is by cutting
Medicare funding, which is already under funded, and then by
reimbursing the public plan at rates that are just a few percentage
points above Medicare. The Mayo Clinic is one of the premier
non-profits in the country. Instead of making them a model for his new
healthcare system, Obama could put them out of business.

From the University of Minnesota, two days ago:

"As the House and Senate work to draft their own versions of a bill,
staffers have been taking calls from experts like Stephen Parente, an
associate professor in the Carlson School of Management?s Department
of Finance, who has been consulting with Congress on the cost aspect
of health care. He discussed concerns with the plan?s price tag and
possible compromises or cost cuts. Parente said Mayo Clinic and 12
other clinics wrote a letter to Congress in which ?they more or less
implied we?ll go out of business, we?re in trouble,? if the public
plan is passed with reimbursement at 5 to 10 percent above Medicare
levels. When the state cuts back on hospitals at a time when they are
already struggling, ?it?s not a good way to run a health system,?
Marty said."
http://www.mndaily.com/2009/07/28/health-insurance-reform-might-hurt-minnesota

As for the huge differential in administrative costs between Medicare
and private insurers, it's a myth.

"Medicare Efficiency?
Dan Keller and I have had a mini-dispute about the administrative
costs of Medicare. We aren't the only ones similarly engaged. An
online search, supplemented by personal experience, has yielded the
following.

Several considerations suggest "Medicare efficiency"? is an oxymoron:

1. Overhead of 2% is based on dividing administrative costs by the
dollar amount of the claims paid. Medicare recipients' claims are on
average twice as high as for non-medicare claims. The administrative
overhead of Medicare per claim is remarkably similar to that of the
private sector.

2. Much of the administrative cost of Medicare is hidden (cost of tax
collection and enforcement, which is in the justice department and the
department of revenue; cost of debating / changing the rules, cost of
research done by staffs backgrounding congressional hearings, cost of
devising and revising fee schedules, inventing new codes for diagnoses
and procedures, etc, all of which is legislative and not attributed to
Medicare). Private companies include analogous costs as administrative
/ overhead. *See note below

3. None of the costs of Medicare compliance are considered in
calculating "administration"?, since those costs are borne by
providers whether individual and group practices, or hospitals. An
entire industry has developed to assure that these entities are in
compliance with Medicare regulations.

4. Any facility receiving federal funds must comply with regulations
imposed by other programs, such as HIPPA and OSHA. HIPPA alone has
placed a huge administrative burden on all providers of healthcare.
Medicare can't be blamed totally for HIPPA costs, but, as mentioned,
when you take federal money you have to play by federal rules.

5. Investigations and enforcement of rules and punishment of offenders
is done by a branch of the federal government other than HHS /
Medicare, so does not appear as administrative costs.

*Note: Two Percenters consider the money that flows in to Medicare to
be free, like a gift from a rich uncle, and that Medicare's myriad
complexities, regulations, and constantly changing nature come fully
formed and with no price tag."
http://arizonahealthfutures.org/?p=69
.

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