Why just one public option?

by: Zack Exley

Thu Jul 09, 2009 at 16:09

I don't want a public option. I want three or four of them. I've suffered under the byzantine bureaucracy of a dozen or more private insurance companies. But I'm a realist, and know there's no guarantee that a single public plan will always be well managed. So why not create three or four of them, and let us switch at will? That way if one atrophies into mismanagement, customers are free to flee—and it will have to reform itself or be reconstituted from scratch.

Forgive this tangent when we're all supposed to be focused on just getting ANY public option passed. But this is worth some thought, because what will we do if a single public option gets off to a poor start? Plus, this is a model for general economic progress. Our for-profit economic system has reached its limits. The health insurance industry is just one of the best examples of that: it has produced enormous profits, but has failed to produce the promised socially desirable byproducts of affordable and hassle-free coverage. If we can solve the health care problem with a better way of organizing labor and capital, then we can try rolling the innovation out to other dysfunctional industries—for example, energy. How will we know if our new system works better than the old? Our public plans will have to compete right alongside the private ones. May the best plan(s) win.

Zack Exley :: Why just one public option?
Insurance companies are sending emails to their customers warning against "government run health care plans." (I got one the other day.) I don't want a "government run" plan either. It's not that "government run" can't also mean well run—it can. Medicare is a good system. The V.A. system is great, actually. But those systems were set up in a different era. Today—and again, forgive me for being realistic—the U.S. government's management culture is so demoralized that a new agency run out of one of those big square buildings in DC is likely to be as dysfunctional as, say, Homeland Security. But I'll take an independent organization that's overseen by managers appointed by our elected officials. In other words, I'd love a health plan that's as well run as the U.S. Post Office or the Marine Corps.

But why put all our eggs in one basket? Economy of scale isn't a good reason, because even if we have four public plans, each will still be larger than the health systems of most European countries.

We'll have fun with this. It will be like sports. Maybe we can throw a subsidy to ESPN to follow the hot competition between the plans. Every year we'll throw a big awards ceremony. C-SPAN will televise it, and millions of odd people like me will watch it. Managers and workers will deliver acceptance speeches for awards such as Best Customer Service, Most Aggressive Negotiating with Providers, Best Mental Health Care Coverage, Easiest to Understand Plans, etc.... CEOs, managers and workers will be rewarded monetarily, but the honor of winning and the fun of the competition will do more to motivate, as countless psychological studies have shown.

I suspect that part of the reason this option hasn't even been mentioned, is that economic dogmas on both sides of the debate are strong. The private side holds the dogma that private companies will always outperform public companies. We don't need to give this dogma much thought, because its advocates don't even believe it themselves. They're simply making a lot of money in the current "private" system and don't want anyone to mess with their racket.

Meanwhile, on the public side, our thinking takes place in a pretty murky economic worldview. Progressives are equally attracted and repulsed by the economic categories of markets, competition, and profit. On the one hand, there is the faint echo of 20th century textbook socialism that mistakenly identified those categories as the source of all our problems. On the other hand, most progressives have been quietly converted—without even noticing it themselves—to believing that the profit system is the only mechanism we can trust to power our economy, and that the only problem is not policing and regulating markets well enough.

But the truth is that markets, competition and profit (in the sense of monetary rewards for desirable results), are not the problem at all. But neither are they the solution. They are just mechanisms that can be used toward any set of goals. The problem in our current system is that those mechanisms are set up in service of the blind goal of "more profits!" But these kinds of profits are not rewards for desirable results—in fact, they are just as often rewards for socially undesirable results. They are just a brute expansion of capital—whether it's good for anyone or not. This kind of profit, in the case of our health insurance system, has almost no relationship whatsoever to delivering quality care to customers—in fact there are many incentives to deliver the worst care possible. It's a dumb system.

But allowing our public plans to compete in a consumer market for customers would be a great thing. We just don't want them competing for arbitrary profits. We want them to compete with each other to achieve desirable goals, including not only customer satisfaction but also cost control. Their success will be rewarded in our fun award ceremony—and in the pay checks of managers and workers.

Just keep this idea in the back of your minds. We might need it someday soon.

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Woudln't that only dilute the purchasing power... (4.00 / 1)
...of the public plan by fragmenting its market power?

REID: Voting against us was never part of our arrangement!
SPECTER: I am altering the deal! Pray I don't alter it any further!
REID: This deal keeps getting worse all the time!

Or we can go with single-payer and make sure it's run honestly and efficiently. (4.00 / 2)
Just my two cents, for what they're worth.

Is this a joke? (4.00 / 1)
Sure, Homeland Security was/is dysfunctional. It was created under the Bush administration, which didn't believe in functional government in general and fought the very creation of Homeland Security in specific.

Using that to justify amplifying the meme that government can't be trusted to run anything well is falling straight into the trap that the right wing set: destroy the government, then use government dysfunction to justify further destroying the government. The diarist's plan is dangerously close to the same logic: government bureaucracy can't be trusted, therefore let's create a really really byzantine bureaucracy in order to ensure that government retains its bad name.

The problem isn't (0.00 / 0)
our society & democracy being ultimately in charge of the system. We need that. But there's just something super dysfunctional in America's management culture in general right now. And Govt is just as much a victim as everyone. The new admin doesn't change all that much, just the people at the very top. This problem is a great danger to the success of a public plan -- I'm just suggesting a fix.

These days in the U.S. corporate bureaucracy is messed up -- and so is government bureaucracy. Hopefully the public plan will be a very independent, innovative organization. But what are the chances of getting it right the first time? So why not give ourselves a few chances to get it right at the same time.

[ Parent ]
i agree that keeping a bureaucracy accountable is important (0.00 / 0)
i deal with the challenge everyday in the uk (not so much in the health care system though - from my personal experience).

However, I think the ideology and framing of the profit motive, as opposed to the public good, is danerous in this context, for many reasons, not least of which that it undermines getting any universal, decent, and cost-effective health care solution.

the other major point is that you have already have multiple public plans operating - medicare, medicaid, va, state plans (new york state, massachusetts), and public requirements for provisions of health care by employers.  adding a public option, practically speaking, is not going to change this in the short run, and the debate is about what the setup should look like in the long run.  there are pros and cons with any approach and tradeoffs in terms of political capital expended and problems resolved/exacerbated.

absent any other alternatives being discussed, i prefer single payer, but i agree that a challenge is making sure it is effective, fair, cost efficient enbouh to make it politically unassailable, politically sustainable, democratically accountable and embodies decent values.  I don't think subjecting it to 'market' forces would strengthen the ability of any health care set up to do those things.

I understand the sentiment (4.00 / 1)
but there's a big catch as far as I can see: more public plans will add more administrative costs across the board from sorting out the particulars from patient to patient, plan to plan. So wouldn't we have many of the same problems we have now regarding admin costs?

And the pharmacy lines would still be a MAJOR hassle with the pharmacy employees still having to sort out patient by patient what gets covered and what doesn't. Same as now.

Doesn't have to be that hard (0.00 / 0)
None of that stuff needs to be difficult. Every pharmacist now as a computer in the office with internet access. Just think how simple it could be. And that's where the new plans kill the old ones, which are still running on 1980's technology.

[ Parent ]
Market forces are poorly suited to health care (0.00 / 0)
I think this might be a good idea for other government agencies, but health care gets the incentives wrong.  Specifically, there's no incentive to encourage good preventive care that will save money in the long term if your customers may well have switched companies later in life.  Even worse, markets aren't known for rewarding companies who spend money now in order to reap dividends decades down the road.  

Still, I'm open to the suggestion if you can explain how to fix the incentive structure.

That's the whole point (0.00 / 0)
...That you can set the incentives. These organizations won't be competing over short term profits. They'll be competing over whatever their goals are -- and those are set by society.

A huge goal should be preventative care. The only way to achieve long term goals in an org is to set the goal and then evaluate progress frequently toward that end. There's no magic in a non-profit or government organization that makes them more likely to do that. Some do - but most don't.

My point is that this is something we should keep trying to do better at as we structure social institutions. And we should not draw a line between "public services" and industry. We need to solve huge industrial problems too, such as enegry.

[ Parent ]
Pardon me, but this is stupid (0.00 / 0)
That's how we broke Medicare Part D.  Instead of one simple program where the government reimburses the drug store for the prescription drug, we have dozens of confusing programs and ten times the administrative overhead.

Furthermore, multiple public options moves us farther away from the ultimate goal, which is single payer.  If there's one public option, it has low overhead, reduces prices, and runs better than private insurance companies, eventually private health insurance (at least for basic care) will wither away.

The message you're sending suggests that you've been infected with insurance company talking points: you seem to expect the public option to be mismanaged.  On what basis?

I have to agree - this is a bad idea (0.00 / 0)
Having multiple public programs would dilute the programs' bargaining power.

Plus, I don't think we should assume that the government will be incompetent, as Medicare's been operating for forty years and it works very well (aside from the Republican-designed Part D), not to mention it's hugely popular.  It is facing a funding crisis in the near-future but that doesn't mean it's operationally troubled.

[ Parent ]
Medicare is great (0.00 / 0)
But I think it's too simplistic to blame recent problems on the republicans. We've got one big dysfunctional culture of management that spans Republicans and Democrats. Health care administrators are overwhelmingly Democrats by the way.

I'm just saying: If our single public option winds up sucking, then where does that leave us.  

[ Parent ]
You make my point (0.00 / 0)
Medicare Part D is a great example of why having more than one org to choose from would be better. Part D did not break Medicare into different orgs, it just made Medicare super confusing. And was really poorly administered.

If people could choose between a few organizations, then if one does something really stupid like Part D, then people could bail.

In fact, if there had been choices, then Part D never would have happened -- because the admins there would know the consequences.


[ Parent ]

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