In today’s Dose:
Health care reform
(A public option plan emerges from HELP committee; Arguments for the public option from the Urban Institute; Obama stands Harry & Louise on their heads)
(Should Steve Jobs use his celebrity status for pancreatic cancer awareness and funding?)
Health care reform
- The latest health care reform proposal to emerge from the Senate HELP (Health, Education, Labor and Pensions) committee includes a public option. The plan is called the Community Health Insurance Option (CHIO). Here’s a one-page summary (PDF) of details from the website of Senator Chris Dodd.
The CHIO would be administered by the Department of Health and Human Services. It would follow the same rules that apply to private, for-profit insurance companies. Rates would be no more than local average private rates, but could be less. Doctor and other health care provider participation is optional. Physicians had been concerned that they would be required to participate. Now that this is clear, we’ll soon see if the medical profession gets behind this plan.
The summary ends with the reasons this plan will make health care more affordable: Pooled purchasing power, the flexibility to offer payment rates that promote quality and “best practices,” and the advantages of being non-profit, namely:
The public option would not need to raise premiums to support shareholder profits, extensive marketing, and extra risk reserves required … to protect enrollees from plan insolvency or mismanagement of funds.
- Now that the details of the public option are clearly on the table from the Senate HELP committee, the plan will benefit from clear, reasoned arguments in its favor. John Holahan and Linda Blumberg (from the Health Policy Center of the Urban Institute) have published an excellent paper called “Is the Public Plan Option a Necessary Part of Health Reform?” (PDF)
The insurance industry complains that the public option will have such a competitive advantage that private insurance will disappear. The Urban Institute paper argues that the current problem is actually a complete lack of competition in the insurance industry.
…health insurance markets today, by and large, are simply not competitive. And as such, these markets are not providing the benefits one would expect from competition, including efficient operations and consequent control over health care costs. We believe that the concentration in the insurance and hospital industries that has taken place over the past several years has been a significant contributor to this problem. The role of the government plan is to counter the adverse impacts of market concentration and, in doing so, slow the growth in health care costs.
The public option will halt the escalation of health care costs:
Private insurers would clearly respond to the presence of a public plan competitor by negotiating more aggressively with providers. Providers in turn would most likely find it in their interest to negotiate lower rates with insurers; otherwise, they would risk the exit of private plans and have only the public plan with which to contract. As private plans bring down their costs, the difference in their premiums from those of the public plan would shrink as well, possibly attracting more enrollees.
Americans are in favor of a public plan, but support is low among those who fear insurance companies might go out of business.
We believe it is highly unlikely that private insurance would be eradicated by competition from a public insurance plan. Some plans would not survive, but the strongest and most efficient would. … A public plan would not destroy the private insurance market but would make it more competitive and lead to the benefits associated with competition.
The paper concludes by citing the disadvantages of public option alternatives that give priority to political considerations, specifically plans that eliminate the leveraging power of a large, non-profit provider.
Due to the controversial nature of the public plan option, policymakers are considering alternatives that could be considered as possible compromises between liberals and conservatives. These alternatives include reducing the market power or rate-setting power of the public plan or creating nongovernmental, nonprofit entities that could produce their own insurance plans with negotiated provider payment rates. While these options are likely to have political appeal, it is important to recognize that the cost-containment potential of a public plan rests fully in its ability to leverage the power of the federal government as health care purchaser to encourage provider participation and reduce prevailing payment rates. Without taking advantage of that strength, the cost-containment potential of the public plan option or an alternative would be tremendously weakened.
- Chris Good has a post at The Atlantic comparing Obama’s health care reform strategy to the Harry and Louise campaign. The premise of the Harry and Louise ads was that middle class Americans would lose their current health care if Clinton’s reforms succeeded. Obama is telling people they should be scared of what will happen to the costs of health insurance if we don’t have reform.
Obama’s economic rhetoric is all about how things can’t remain the same. It’s the same point the Harry and Louise ad made, but backward, and in Obama’s version, the “naysayers” who oppose health reform are the ones who play fast and loose with the coverage Americans currently enjoy. … [T]here is no status quo to preserve: the fundamental truth about health care is that it’s changing, rapidly and frighteningly. Leaving the current system in place is what will cause people to lose what they already have. …
“Many of you may be satisfied with your health care now. What you’ve got to do is project, if current trends continue, are you still going to be happy with your health care five years from now? Will you have health care five years from now?” Obama asked.
Perhaps learning from the Clinton-led effort, Obama has made sure the “naysayers” aren’t the only ones with scary arguments to win people to their side.
- When Steve Jobs, who lives in California, received his liver transplant in Tennessee, it raised ethical question about the advantages of being rich when it comes to health care. (Duh!) Since Jobs is the co-founder of Apple, there is also the business ethics question of coming clean with investors. Tara Parker-Pope, in her NY Times blog Well, looks at a different angle: If Jobs talked openly about his experience with pancreatic cancer, the publicity would be invaluable for this deadly and underfunded disease.
But I would argue that Mr. Jobs has 35,420 far better reasons to start talking about his health. That’s the number of people expected to die of pancreatic cancer this year. I can only imagine the impact a person of Mr. Jobs’ global stature would have on awareness and fund-raising if he braved public disclosure of his condition. … [P]eople with pancreatic cancer need the kind of Hail Mary pass only a big player like Mr. Jobs could provide.
She quotes Randy Pausch, whose “Last Lecture” brought attention to pancreatic cancer.
“It’s the Ebola of cancers,” he [Pausch] told me, referring to the deadly hemorrhagic fever that occurs in parts of Africa. “Ebola kills people so fast, they don’t have a chance to spread the disease. Pancreatic cancer kills its victims so quickly they don’t have time to become advocates.”
Parker-Pope cites celebrities who have recently gone public with their illnesses in order to raise awareness: Patrick Swayze, Christina Applegate, Farrah Fawcett.
I do hope that this remarkable man and creative thinker who helped revolutionize computers, music, phones and animated movies will, someday soon, finally open up and lend his special brand of magic to the cancer community.
- A lengthy and highly informative article in the Washington Post investigates controversies that surround the labeling of organic food.
Three years ago, U.S. Department of Agriculture employees determined that synthetic additives in organic baby formula violated federal standards and should be banned from a product carrying the federal organic label. Today the same additives, purported to boost brainpower and vision, can be found in 90 percent of organic baby formula.
The government’s turnaround, from prohibition to permission, came after a USDA program manager was lobbied by the formula makers and overruled her staff. That decision and others by a handful of USDA employees, along with an advisory board’s approval of a growing list of non-organic ingredients, have helped numerous companies win a coveted green-and-white “USDA Organic” seal on an array of products.
The battle between the USDA and organic purists is not over the health hazards of non-organic ingredients, but over the integrity of the federal organic label. Agriculture Secretary Tom Vilsack has said he wants to protect the label, but he acknowledges there is considerable pressure to lower standards so that more products can be labeled organic.
This is an excellent article that covers the history of organics labeling and includes many quotations from insiders. For example, this one from Joe Smillie, a board member of the National Organic Standards Board:
“People are really hung up on regulations,” said Smillie, who is also vice president of the certifying firm Quality Assurance International, which is involved in certifying 65 percent of organic products found on supermarket shelves. “I say, ‘Let’s find a way to bend that one, because it’s not important.’ . . . What are we selling? Are we selling health food? No. Consumers, they expect organic food to be growing in a greenhouse on Pluto. Hello? We live in a polluted world. It isn’t pure. We are doing the best we can.”
The article ends with a quotation the sums up the root of the problem:
[A]t the standards board’s meeting last month, Chairman Jeff Moyer noted the growing tension. “As the organic industry matures, it is becoming increasingly more difficult to find a balance between the integrity of the word ‘organic’ and the desire for the industry to grow.”
- Food, Inc.. is now playing in many small theaters around the country. Here’s the latest list of where it can be seen. The DVDwill be released on November 3.
See my post What’s wrong with our food? for more on this documentary.