The ACP Advocate Blog

by Bob Doherty

Friday, April 10, 2009

Is a "public plan" option worth all of the fuss?

Steve Pearlstein writes in today's Washington Post about the political brouhaha over proposals to give Americans a choice of a Medicare-type public plan, which he correctly observes has become a "litmus test" for the Republican right and the Democratic left. He argues, though, that "this is hardly the most important issue in health-care reform" because:

"It is possible to design a system that could control costs, improve quality and increase access to care without giving everyone the chance to sign up for a government-run health-insurance plan modeled after Medicare. It's also possible to design a system that includes a public option."

I know many will take issue with Pearlstein's view. For instance, see Maggie Mahar's two-part Health Beat blog (Part 1 and Part 2) and on why Obama should stand firm on a public plan and Conn Carroll's post on the Heritage Foundation blog on why a public plan "must be avoided at all cost."

In my view, though, Pearlstein hits the nail on the head as he asks whether the public plan would simply replicate the existing flaws in Medicare physician payment:

"If by 'public option' you mean the current Medicare fee-for-service plan - a plan that makes no attempt to manage and coordinate care and pay for that care on the basis of the quality of the outcome - then a public option would be an awful idea and move the system in exactly the wrong direction."

The design of the public plan has largely been overlooked by the "are you for it or against it" crowd.

If the proposal is to offer the American people a public plan that undervalues primary care, rewards fragmentation and volume of services, and has a built-in self-destruct formula (SGR) that triggers physician payment cuts every year, which Congress then has to step in and stop with stop-gap measures which only make the problem worse the next year - well, then, it is hard to see why this is a model that should be offered to everyone. But, as Pearlstein also notes, it is possible to create a well-designed public plan that private competitors would be forced to emulate.

The American College of Physicians, for its part, has not taken sides (yet) on the public plan option, despite enormous political pressures from the left and the right. We want to see the details. What would the benefits be - considering that Medicare fee-for-service doesn't cover most preventive services? How will physicians be paid - would the public plan increase payments for primary care and support models to coordinate care, like the Patient-Centered Medical Home? How would the selection process and federal subsidies for the public and private insurance plans work? What would competing private insurers be required to do in order to be qualified to participate in the program?

Raising these questions isn't ducking the issues, it is asking those on the left who favor a public plan to explain what it would look like and how it would work, rather than just saying it is essential. And asking those on the right to better explain their opposition - what is it about a public plan that they would find to be unacceptable (since I don't think most of them are in favor of repealing Medicare for the elderly) other than they don't like big government?

Today's questions: Do you think a public plan option is essential or absolutely unacceptable, and why? Or do feel that it might or might not be acceptable - depending on the details?


Blogger Christopher M. Hughes, MD said...

"And asking those on the right to better explain their opposition - what is it about a public plan that they would find to be unacceptable (since I don't think most of them are in favor of repealing Medicare for the elderly) other than they don't like big government? "

They are afraid that, like Medicare, it will be very popular. Some Republicans explicitly recognize that if health care reform is successful, they will lose even more of the electorate than they already have, and possibly for quite a long time.


April 10, 2009 at 3:37 PM  
Blogger Mark Mayer said...

A reformed public plan, with care coordination coverage, higher valuing of preventive and chronic care, and reduction of disparities between cognitive and procedural services, would be great as the base layer in a reformed health system. Supplemental insurance to augment the public plan would be acceptable to me, as long as physicians are not disrupted with prior approvals and hundreds of formularies. There should be a limited number of supplemental options available. The public plan should be the basis of the system.

April 10, 2009 at 5:00 PM  
Blogger Sharon said...

The public plan option is vital. But it absolutely must NOT be Medicare for all. We need to design a system that provides appropriate care that is cost-effective. Medicare was designed in a time when the primary place people spent health care money was in the hospital. Times have changed, and we have an amazing opportunity to create a system that works.

April 23, 2009 at 11:39 PM  

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Bob Doherty is Senior Vice President, American College of Physicians Government Affairs and Public Policy; Author of the ACP Advocate Blog

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