By Carter Bundy
If America is going to ever improve in the three big areas of health care (access, affordability and quality), we have to have a public insurance option.
There are dozens of major reforms that need to be implemented in American health care. Having a public insurance option won’t come close to solving all of our problems. A public insurance option is not sufficient for America to enter the 21st Century of health care, but it is necessary.
The problem
America is still the wealthiest country in the world. Yet we consistently rank near the bottom of developed nations by almost every measure of health. Even those of us with insurance pay far more than people in other countries, and there’s no sign that double-digit health care inflation is slowing down.
We all know the horror stories of the 45 million uninsured Americans and of the additional tens of millions of underinsured. Not only do those families live in constant fear of becoming ill, but they cost our system hundreds of billions of dollars in waste.
For many of the readers of this site, the bigger problem is that we may think we have good insurance but find out too late we really don’t. Or that we won’t be able to afford it in the future, whether we run a small business or have an employer who is facing a fiscal crisis in large part due to the rising cost of health care.
Obama’s plan
President Obama has already rejected single payer as the solution to America’s health care problems. His reasoning is that dramatically changing one-sixth of the economy is logistically too difficult. He isn’t asking for private insurers to be forced out as primary insurers.
Obama’s already compromised with private industry to let them continue to have their role in health care. If you like your insurer, Obama’s first principle is that you get to keep what you have.
Private insurance isn’t going anywhere. But for many reasons, a few of which are listed below, we can’t achieve access, affordability and quality without a public insurance option.
The opposition
The closest things to a public option we have in America are Medicare and Medicaid. Medicare and Medicaid are famous for being far leaner, more efficient operations than private insurers. There is a downside, however. Because they don’t hire the same batteries of attorneys and claims adjusters to deny claims, they’re more susceptible to fraud.
But did you ever notice how the abusers of public systems like Medicare and Medicaid are the big private health care insurers and providers like former U.S. Sen. Bill Frist’s HCA, which settled a $1.7 billion fraud claim?
Amazingly, HCA’s CEO for much of the period of fraud was Rick Scott, who has since moved on to be the spokesperson for Conservatives for Patients’ Rights, the leading group fighting against giving the public a choice.
The opposition to giving people a choice is essentially in two camps: the big private insurers trying to keep their incredibly profitable game going without accountability (the Rick Scotts and Bill Frists of the world), and people ideologically committed to having the market solve all our problems.
Billionaires like the Frist family are never going to embrace a public option. Hopefully, though, some of the folks normally committed to market solutions will realize there are some crucial factors inherent to health care that make market solutions alone an incomplete answer.
During the great health care debate of 2009, we’re going to hear a lot about how only the market can solve our national health care problems. Every time you hear that, give it consideration, but remember how sharply health care differs from almost any other sector of a market economy.
I’ll start with one timely assumption about market forces — consumer information — and continue with additional market assumptions over the next few columns.
Misfit assumptions
Assumption No. 1: Consumers have perfect information about themselves and their health needs.
A basic assumption economists make all the time is that for markets to work efficiently, consumers have perfect, or close to perfect information. When it comes to health issues, though, for most of us the timing and type of health issues we’ll face during our lives are tough to predict at best and random at worst.
Knowledge of family history can help us guess at our risks, and so can our actions with respect to controllable factors like exercise, diet, smoking, alcohol, sexual activity, etc. But how many of us have friends or family — or even ourselves — who suddenly became afflicted with an illness that no one saw coming?
The young woman who finds a lump. The young man who gets prostate cancer. Stroke, heart disease, almost every form of cancer, Lou Gehrig’s disease, Alzheimer’s — these things are often a surprise, and certainly unpredictable as to timing and exact form.
In the news
Look at the celebrity deaths and events last week: Farrah Fawcett was relatively healthy until a few years ago, and died of cancer at a young 62. Michael Jackson, for whatever his prescription problems, was also an energetic and active 50 years old.
Governor Palin stepped down, in no small part (according to her) because of her family. Chief among those concerns had to be her beautiful child Trig with his Down’s syndrome.
Jackson, Fawcett, and Palin all underscore the impossibility of knowing what our — and our families’ — health care needs are.
I suppose Karl Malden, at 97, had to be somewhat predictable, but he’s the exception who proved the rule last week.
Private insurance markets sometimes fail in part due to the fact that the normal market assumption of consumer information doesn’t hold even for the aspect of the market the consumer knows best: her or himself.
Next column I’ll tackle a few more basic assumptions that go into supporting a market solution that don’t mesh with the realities of health care sector of the economy.
Bundy is the political and legislative director for AFSCME in New Mexico. The opinions in his column are personal and do not necessarily reflect any official AFSCME position. You can learn more about him by clicking here. Contact him at carterbundy@yahoo.com.