August 26, 2009

Real Public Option

I confess I haven't had much to say these days. Obviously, the issue of the month is health care reform. And it should be obvious that the crux of it is that real reform depends on whether or not we have a real public option.

I studied physics as an undergraduate, which teaches one how to approach complex problems. And that rests on managing the complexity by sifting through the elements of the problem, determining which are important and which are not, and approximating the solution by focusing only on the important elements.

First, a key element to our health care system is the "insurance" piece, that is, pooling a lot of people together with the understanding that only a small fraction of the people will need costly care, the cost of which is paid for by the entire pool of people... spreading the cost. It's a socialistic concept on the face of it, regardless of whether private parties or the government creates and manages the pool of people.

An important sub-element to the insurance piece is, that, everything else being equal, if a profit is taken from the insurance pool, then the cost will be higher than if no profit is taken. A side note: In principle, the government could be the insurer and take a profit to pay down the debt we've built bailing out the banks. Wouldn't that make sense?

There are other important elements, such as doctor's concern about liability and litigation. The solution there is liability insurance and perhaps some tort reform, but the physicist in me says that tort reform might be getting into a complexity that aren't essential.

Now, it's true that our bloated private health care insurance industry, with many paper pushers, creates a lot of jobs... the number 6% of our economy comes to mind... oops, according to the Washington Post, "In 1997, health care accounted for 13.6 percent of the gross domestic product" (Some say it's now 16% [1]). Of course, the health insurance piece is a fraction of that... here's the physicist again: Even if it is only 1% of the economy, the health care insurance industry's inefficiency creates a lot of jobs (I didn't say inefficient at generating profits... that it does well).

So, lets summarize up to this point: 1) Insurance is a key element of health care reform, 2) Current private heath insurance creates a lot of jobs.

So, it's true that dropping private insurance for a single payer system would be disruptive; because private insurance creates a lot of jobs, immediately ditching it for a government-run insurance for everyone without private profit, would likely put a lot of people out of work. There are work-arounds, but lets accept this premise and say, "OK, lets meet half-way and allow people to have the option of joining an insurance pool managed by the US Government."

Short of that fundamental change, the other parts of the legislative proposals are just tinkering with the old system, which doesn't really constitute reform. With today's legal framework, there's nothing to prevent the creation of an "Exchange" or "Coops;" I can go to an "exchange" every year when the state government I work for brings in the hand full of private insurance companiess and allows us the opportunity to switch providers.

Bottom Line: If the legislation passed by Congress does not include a real public option, then it's not real reform.

Now, because physicists often make simplifying assumptions in their analyses, they like to explain the little side issues after they give the bottom line.

The Phony Public Option Issue: We need to be careful of having a "public option" foisted on us in name only (the phony public option issue). Former Clinton Labor Secretary Robert Reich, who speaks truth to power, outlined some tests to determine if a public option is real or phony. I could track them down, but there's a simpler test: If the insurance industry hates the legislation, and is fighting against it tooth and nail, i.e., it is not a feel-good bi-partisan bill, then it's probably a real public option.

So, it's time to raise our voices in a variety of ways and call for a real public option.

For Your Convenience:

1. The Private Health Insurance Industry is Killing the U.S. Economy, Huffington Post, Richard Kirsch, Rep. Jan Schakowsky April 27, 2009.


1 comment:

libhom said...

If there isn't a credible public option, I will call my Senators and ask them to vote against it.