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December 19, 2008
Why Mess With ‘Hybrid’
Health Reform When Single-Payer Is the Way to Go?
The looming battle over
health care reform apparently will focus on a public component modeled
Call it Medicare for a
lot of people with a politically mandated nod to the private sector.
Expect most Republican
members of Congress to fight it tooth-and-nail, but don’t fall for their
hypocrisy. Don’t believe doctors or hospitals, either, when they
complain about presumed Medicare underpayment. That’s a bunch of
baloney, according to U.S. Rep. Pete Stark, D-Calif., who chairs the
House Ways and Means Health Subcommittee and has heard it all for
Way back in 2003, when
the Bush Administration trumpeted so-called Medicare reform, Republicans
argued that Medicare, a public (tax-dollar financed) health care plan
for those aged 65 and older, should have to compete with the private
sector. They won, and the result is Medicare Part D, also known as
(As currently enacted,
however, Medicare Part D costs a lot more than necessary. The GOP
inserted a provision in the law forbidding Medicare officials from
negotiating lower prescription drug prices. That little sop to big
pharma campaign contributors has to go if we are serious about cutting
health care costs.)
Democrats are now
calling Republicans on their rationale and raising the ante, offering an
inverse argument – private health care insurers covering Americans
younger than 65 also should have to compete with a public plan. Said
plan would be managed by the federal government (like Medicare) and pay
private providers, such as physicians and hospitals, to provide actual
The label du jour is
hybrid. Democrats are pushing a hybrid system of public-private health
care for Americans younger than 65 as the essence of health care reform.
Evidence in favor of
hybrid funding includes superior cost containment and better health care
quality, according to Jacob S. Hacker, professor of political science at
UC Berkeley. Hacker discusses this evidence in a recently published
report co-sponsored by the Institute for America’s Future and UC
Berkeley Law School’s Center for Health, Economic and Family Security,
of which Hacker is a co-director.
Between 1997 and 2006,
for example, health spending per person enrolled grew 7.3 percent per
year under private plans, compared with a 4.6 percent annual hike under
Medicare. In administrative overhead, Medicare’s costs are around 3
percent of premiums. This compares very favorably to 5 to 10 percent of
premiums for self-insured large businesses; 25 to 27 percent of premiums
for companies in the small group market; and a whopping 40 percent of
premiums in the individual insurance market.
Speaking of quality,
the public system for veterans, the Veterans Health Administration, has
developed an evidence-based quality improvement program. More than
two-thirds of those in the VHA system receive the appropriate standard
of care (based on the program), while only about half of adults and
children covered by private insurance receive the same standard of care.
benchmarks, in fact, are frequently adopted by private carriers when
evaluating how and what kind of health care to pay for. And unlike
private insurers, which move in and out of markets and often change the
terms of what they do and don’t cover, Medicare affords greater coverage
stability, leading to more consistent care for its enrollees.
It’s clear that a
public plan can contribute to improving health care in this country
while lowering costs. What’s not so obvious is why we need (or want) to
keep involving the private sector in health care funding. It’s just not
getting the job done and the tab is outrageous.
Could we not just skip
all this hybrid hoopla and go directly to single-payer health care
funding? Of course not. How silly even to suggest it. That would be much
too cost-efficient and time-saving, not to mention threatening to many
well-heeled and vociferous special interests.
So we shall spend time
and money we really don’t have demonstrating yet again that the public
approach is the way to go.
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