Friday, September 4, 2009

Health-Care Reform: A Government Run Public Option is Not An Option

The administration and most health-care reform bills pending in congress propose a government run public option (GoRPO) for the purposes of insuring the uninsured and reducing health-care costs by providing competition (“making insurance companies honest”). Such a proposal is hardly the panacea it is touted to be.

This essay (in bullet format*) will explore:
 the reasons to reject a GoRPO,
 the logic behind a GoRPO,
 the pathway to a government run universal national health-care system,
 failure of the Massachusetts system, and
 alternatives to a GoRPO that will insure the uninsured and, through competition among private health insurers, reduce health-care costs.
[*The bullet format best serves the purpose of this discussion].

There are substantial reasons to reject a GoRPO:
 A GoRPO will eventually lead to a universal nationalized health-care program, changing the face of American medicine, with the resultant (un)intended consequences (to include, but not limited to: raising taxes, rationing, reducing medical innovations [technology and pharmaceutical], decimation of private medical practices).
 The cost of a GoRPO will be significant and won’t be “budget neutral” (definition of budget neutral: won’t increase the cost to the government). The Congressional Budget Office has recently refuted the administration’s claim of budget neutrality for establishing and maintaining a GoRPO. Moreover, generally missed is the administration’s oft repeated statement that proposed health-care reform will be “budget neutral in the first ten years”. What happens after the first ten years? [During its development, Medicare was predicted to be “budget neutral”; it is not].
 The Massachusetts system, a GoRPO on a smaller scale, is a failure.
 Non-government alternatives to a GoRPO exist.
 Medicare recipients will suffer as the government takes Medicare funds (cuts in reimbursements to health-care providers and hospitals rather than reducing fraud and waste) to support a GoRPO.
 A GoRPO will place additional burdens on all hospitals (community and teaching hospitals alike) because low reimbursements to health-care providers for Medicare/Medicaid and GoRPO (Medicare rates) participants will lead to these individuals seeking their health-care at emergency departments and teaching hospitals. This will be especially detrimental to academic hospitals as work effort for their teaching and research missions is deflected to take care of the additional patient workload.
 Medicare recipients will experience reduced access to health-care as more practices decline to see these patients due to further lowering of reimbursements (a result of funds diverted from Medicare for support of a GoRPO and other Medicare budgetary reductions). Worse, many rural Medicare/Medicaid recipients will forego seeking medical care as the travel expenses to city hospitals will be prohibitive.

What is the true logic behind the GoRPO?
 Medicare spending is out of control.
 The administration and many members of congress want to control Medicare/Medicaid expenditures.
 There are grave difficulties in controlling Medicare/Medicaid spending when:
(a) Medicare/Medicaid enrollees expect the same benefit coverage for state of the art services as individuals with private health insurance, and
(b) there exists in Medicare/Medicaid unchecked waste and fraud.
 Medicare and Medicaid costs can be reduced if the US government is the primary (or near majority) insurer of US citizens.
 The opening to this is the GoRPO.
 [Don’t believe me? REP Anthony Weiner (D-NY), among many others, would like a nationalized health-care program as part of the overhaul but he will accept a GoRPO because he understands this to be the open door to a nationalized health-care program (on MSNBC’s Hardball)].

So what would be the path from a GoRPO to a nationalized health-care program?
 Individuals without health-care insurance will participate in a GoRPO.
 A GoRPO will offer premiums lower than those of private health insurers.
 Individuals with health-care insurance will gradually migrate to a GoRPO.
 Some employers will find it less expensive to pay a government fee than to provide health-care coverage for their employees and these employees will find it less expensive to participate in a GoRPO than to self-pay for insurance coverage.
 Over time, a GoRPO will grow in size.
 Combined with other government run (or funded) health-care programs (Medicare [includes SCHIP], Medicaid, Veterans Health Administration, Indian Health Service, TRICARE, Federal Employees Health Benefit Program), over time the US government will be the single largest, if not the majority, health-care insurer.
 The only possible outcome will be effective government control of medicine through mandates to health-care providers (physicians, nurses, etc), hospitals and pharmaceutical companies.
 Health-care providers and hospitals will effectively be government employees.
 [I’m not the only person to reach this conclusion (health-care providers as civil servants). Paul Gigot, news journalist, has said as much (on FOX News’ FOX News Sunday) – the discussion panel unanimously laughed at the inherent and unambiguous truth in this conclusion].
Is this truly what Americans want?

Established in 2006, the Massachusetts universal health-care system has reduced the number of uninsured to 2.6% of the state’s population. The system is a failure in every other respect:
 The insured have difficulty finding physicians because many practices have limited the number of individuals the see with this insurance as the practices cannot survive if a large percentage of their practice is comprised of individuals with this insurance – this is a direct consequence of low reimbursements to healthcare providers. This result should have been no surprise to the architects of the Massachusetts plan – similar issues have existed (and continue) for Medicare/Medicaid patients. [Will the federal government mandate, by statute or financial pressure on individual states, that physicians will be required to accept these patients?]
 Because of the difficulty in finding physicians, many insured continue to visit hospital emergency rooms for their health care.
 The budget of the Massachusetts system is $9 billion in the red, i.e. not “budget neutral”. It is most reasonable to investigate the failures of the Massachusetts system before the federal government embarks on a similar system albeit on a much larger scale.

Are there credible alternatives to the GoRPO? Yes there are. Some ideas I favor:
Reduce costs: Allow all citizens to seek insurance across state lines.
Insure the uninsured: Establish not-for-profit participant owned health insurance cooperatives.
These alternatives will force insurance companies to compete and “keep them honest” without the need for a GoRPO. In other words, a GoRPO is not required to force competition.

This article may be downloaded from my website:

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