Yesterday I noted that Seattle Congressman Jim McDermott, and his staff, believe that "if there isn’t a public option, you’re not going to have real health care reform.” Most serious people in the health care debate—or, at least, most serious people on the left—believe this. Why?
Here's why, via Ezra Klein:
The private insurance market is a mess. It's supposed to cover the sick and instead competes to insure the well. It employs platoons of adjusters whose sole job is to get out of paying for needed health care services that members thought were covered.Moreover, public insurance is simply more efficient. Medicare holds costs down better than private health insurance. The substantially public systems employed by every other industrialized nation cost less and cover more than the American model. So the question became how to marry the policy need for public insurance with the political need to preserve the status quo.
Enter the public insurance option. It doesn't replace the insurance individuals already rely on. But it provides an alternative. It lets them make the decision. It's the health care equivalent of being pro-choice. And it thus serves two purposes. The first is to act as a public insurer. To use market share to bargain down the prices of services, much as Medicare does. To lower administrative costs. To operate outside the need for profit, and quarterly results. The Commonwealth Fund estimated that this would result in savings of 20%-30% over traditional private insurance.
The second is to apply competitive pressure to the rest of the insurance industry. If the public plan is ruthlessly lowering its administrative costs and garnering a reputation for decent, good-faith service, it will take market share from the private insurers. The private insurers will have to respond in kind to retain their customers. If they fail to adapt, the system could become something resembling a single-payer structure.
Now comes the news that the American Medical Association—which Klein points out has "opposed all public plans proposed by all presidents in all contexts"—will not support health care reform that involves a public plan, and has told Congress as much in the following language:
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.
Which, again returning to Klein, is what the AMA has been saying forever.
The AMA represents the interests — which it tends to define as the profits — of doctors. That gives it a slightly different perspective on the American health-care system. Judged as a health-care system, it's pretty bad, primarily because it's so expensive. But judged as a mechanism for funneling profits toward various actors in the medical industry, it's pretty good, primarily because it's so expensive. Things that would make it cheaper — like a public plan — will inevitably cut into the profits of doctors. And the AMA doesn't want that.
Obama's going to be addressing the AMA on Monday in Chicago. Will he take them on the way he took on the auto-makers in Detroit in a speech during his presidential campaign? The way he took on the Muslims and Jews of the Middle East on his recent trip to Cairo, telling them to speak honestly about the truth of their conflict and the limited possible solutions? The way he took on unhelpful exploiters of America's racial tensions in his famous speech in Philadelphia?
We'll see.
Until then, please enjoy, once again via Klein, a pre-presidential Ronald Reagan telling Americans in 1961 why health care reform is a sneaky form of socialism. Guess who paid him to do this? The AMA.
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