Monday, August 17, 2009


An Old Geezer's Monday Rant

Unlike yesterday's post, this one is about politics and public opinion. Two items in the news this morning got my juices going. The first is that the White House is giving up on the "public option" non-profit health insurance plan. Instead, the White House will support the "cooperative" plant - whatever that is. The other item is taken from the editorial pages of the Los Angeles Times and reads as follows:

Making basic healthcare services available to those who cannot afford them is a worthy goal. If the currently proposed healthcare reform addressed only that issue, we would not be having the contentious debate currently in evidence.

Reforming the system incrementally is not a bad idea; why not try it?

Oh, yes. There was a third item. Following the White House statement about the public option, stock prices of the big health insurance companies rose smartly.

My response to the writer of the letter to the editor is that reforming the system incrementally is extremely expensive. The objective of the reform is twofold: (1) provide health care to all, not just those with enough money to pay or to buy insurance; (2) get a handle on the increasing cost of the present health care system that doesn't cover everyone. Both of these objectives have to be met, one way or another. If, through inaction, one objective has to be sacrificed, it will be the first. The increasing cost will stop when only the rich can afford health care at all at the rate of increase we experience at present.

The writer is wrong in implicitly assuming that part of our health care system works well. Not so! The part that works works badly and needs reform just as much as reform is needed to provide health care for the poor and lower middle class. In the present system, no component of it has an incentive to control or restrain costs. The providers are looking a payers with deep pockets: medicare and big insurance firms. They have no incentive to practice good medicine economically. The insurance companies have little incentive to restrain cost increases other than denying coverage for certain very expensive procedures. Increases in the cost of conventional health care procedures can be passed on to the policy holders in the form of increased premiums. For political reasons, Medicare is not allowed to restrain cost increases by negotiating prices for prescriptions or by urging medical providers to operate more efficiently.

In short, the whole system needs to be reformed. The White House is wrong in deferring to the demands of the insurance lobby to drop support for the "public option."

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