Monday, November 9, 2009

Socialist Paradise or Corporatist Hell?

I'm promoting Mia's comment on the health-care bill so I have a chance to farble on about it more publicly. She says,

I do applaud Kirkpatrick for voting in line with the majority of those who elected her. I wonder though, if the insurance companies have come out the really big winners here. Mandatory insurance, with a public option that "will probably cost more than private insurance". Even with the added cost of covering preexisting conditions, not charging women more, and whatever else, how many millions of new customers will insurance companies get? I don't see how this is a move toward socialized healthcare, maybe even quite the contrary. Insurance companies will grow in power tremendously. Look how much power they've flexed during this debate. Am I missing something?
I think that if the House bill were to pass through the Senate funhouse and come out the other side more or less unscathed, it will substantially diminish the power of the insurance companies.

First, the public option, contrary to your quote above, will almost certainly operate at substantially lower cost. Profitmaking companies must produce profits for their shareholders, and that can be seen ultimately as a dead loss from the system, meaning higher costs out of the gate. To balance that higher cost-structure, the companies will have to cut corners on personnel and benefits to the customer. Meanwhile the public plan, because it has less motivation and scope for denying coverage, has to focus on reducing costs through prevention and keeping its customers healthier.

An important piece of the picture will be the lifting of the antitrust exemption that insurance companies have enjoyed for so long. This will lead to breakups of the largest companies in favor of local competition.

With more reliable and lower-cost benefits and larger scale, the public plan will then become the biggest player, furnishing more economies of scale and negotiating clout. As in Europe, eventually the private insurers will get mostly out of standard care and into boutique and specialty benefits covering things the public plan can't or won't. They will also have steady customers among the many Americans who can afford to throw away some of their money because they don't trust the government.

One thing we'll still have to fight for in the public plan is coverage of non-allopathic care. We're discovering and rediscovering so much in medicine that's useful and effective but (so far) outside the scope of the Physician's Desk Reference. It will be very important to start building in the acceptance and coverage of treatment and care modalities that are not taught in the medical schools if we are to see any of the vast potential cost-savings and life benefits they offer. With a public plan, which is more focused on reducing costs by making people healthier than reducing benefits to customers, this will be far easier.

1 comment:

Mia said...

I will try to muster a little more optimism. I need to do some reading about the antitrust exemption, I'm not familiar with it. Non-allopathic care? Now you're really stretching my ability to find optimism! The thing that blows my mind and discourages me the most is this nearly universal and essentially perfect divide between right and left thinkers on almost all issues. I know sometimes the views have shifted a little, and many of us cross over on select issues, but still this overwhelming division. I can't get past it. How can it be? I saw a mock college schedule once at YC and one of the classes read "Repulican Ethics, Mondays, from 10:00 to 10:15" or something like that. I still think it's hilarious. I hope you're right in your assessment here Steven. It would be such a huge moral accomplishment for us as a country.