Thursday, June 11, 2009

Trickle down costs

From today's New York Times, the American Medical Association comes out against a public option:
But in comments submitted to the Senate Finance Committee, the American Medical Association said: “The A.M.A. does not believe that creating a public health insurance option for non-disabled individuals under age 65 is the best way to expand health insurance coverage and lower costs. The introduction of a new public plan threatens to restrict patient choice by driving out private insurers, which currently provide coverage for nearly 70 percent of Americans.”

The first sentence is a bit weird, as on its face it seems to imply that a public option is actually really good idea for people over than 65, but if that is true, then why isn't it a good idea for those under 65? Of course, the AMA knows that Medicare is popular so they don't want to piss on it, but the statement itself is a bit odd.

But the second sentence is just bizarre, partly because there are two ways to read it. First, a public plan would restrict patient choice of insurers by driving out private insurers. Since most people don't really have a choice of insurers anyway, this doesn't really make any sense -- in other words, I'm insured by whomever Harvard says I'll be insured by, I don't have any say in the matter. The second way of reading the sentence takes the more common usage of "patient choice" meaning "patient choice of doctor." But this doesn't make any sense either -- why would a public plan necessarily lead to decreased physician options? There will be limits if lawmakers write in limits, and there won't be if they don't. But I don't see how a private insurance scheme automatically leads to greater patient choice than a public one.

And, of course, what goes unsaid is why there's a threat of a public plan "driving out private insurers." Perhaps because it is hard for a non-profit to compete with a for-profit, because the non-profit isn't paying executives obscene amounts of money? For example, the CEO of Blue Cross Blue Shield Massachusetts was paid $4.3 million dollars last year. Considering that there are about 3 million people in MA covered by Blue Cross, that's over a dollar per person just to pay the damn CEO (while a dollar doesn't seem like that much, notice how ape-shit people go when there's talk of funding some million dollar program that will cost each state resident pennies).

Peter Orszag, Obama's budget guru, has recently been citing a much-read (and highly-recommended) New Yorker article by Atul Gawande from a few weeks back (who, I now realize, works across the street from me). Essentially, the article looks at health care costs in various places and comes to the conclusion that health care costs more in places where doctors make a lot of money (and that costs have no relation to results -- the Mayo clinic is held up as an example of high quality care delivered at low cost). So when the AMA comes out against a public option, just remember where their bread is buttered.