Monday, June 8, 2009

Are the right questions being asked about the public plan?

As expected, the debate over health care reform is now centered on whether or not the public should have the option of enrolling in a Medicare-like plan financed and administered by the federal government. Last week, President Obama sent a letter that expressed his strong belief that "Americans should have the choice of a public health insurance option operating alongside private plans. This will give them a better range of choices, make the health care market more competitive, and keep insurance companies honest."

Obama's decision to stake out a firm position in support of a public plan resulted in an immediate backlash from Republicans, dampening the already diminishing chances that health care reform will have substantial GOP support.

In the meantime, the Senate Health, Education and Labor and Pensions Committee, chaired by Senator Ted Kennedy (D-MA), has released a summary of its health care reform proposal, which includes a requirement that the public be offered a qualified public plan that would set "provider reimbursement at Medicare rates plus 10 percent. The government plan would be deemed to be licensed in each state. Premiums must be sufficient to cover the costs of the government plan."

For liberal and conservative true-believers, the debate over a public plan has become a surrogate for the broader debate over the role of government in our health care system. If you believe that the government needs to take on more responsibility for financing and organizing health care in the United States, you want a public plan. (Many of those who favor a public plan option would like it to be the only option - like Canada - but have decided that this is the best they can get right now.) If you believe that the problem with American health care is too much government and not enough private initiative and responsibility, then you are opposed to a public plan.

Largely missing from the discussion, though, are the details of the "it" that everyone is arguing over. There is general agreement among policy wonks that the current Medicare payment structure is dysfunctional - it undervalues primary care and rewards volume instead of value. If so, then, does it make much sense to create a new public plan that takes this same flawed payment structure and add 10%?

Would there be safeguards to ensure that payment rates under the public plan are competitive with private insurance and high enough to ensure sufficient participation by physicians and other "providers"? Or would it end up looking more like Medicaid, where low levels of payment have resulted in low levels of physician participation and generally, poor access to care?

Medicare also does not cover most preventive services. Does it make sense then to replicate this same benefit structure in a new public plan?

One could imagine a public plan that is better than Medicare. It would pay primary care doctors more, create incentives for value, rather than volume, and cover preventive services that largely are left out of Medicare. It would pay enough to ensure sufficient participation by physicians. It would compete with qualified private insurers, but on a fair playing field.

It is legitimate to raise ideological or philosophical points for or against a public plan. But at some point the debate needs to move from philosophy to defining the "it" - what kind of public plan are we talking about? Only then can voters, most of whom are principled pragmatist, make a decision on support.

Today's questions: Should the public be offered a public plan? And if so, should it look like Medicare? Or something different and better?


PCP said...

I feel that a Public plan will never gain the support of the republicans or the conservative base. They are ideologically opposed, they already resent the role Medicare has in health policy. Given the direction Medicare (arguably the rudder of our health care system) has led our health care, one has to admit they have a point. That said, we have an important question ahead of us, in what segment of our payer mix do we inject our 50 million uninsured, if we are to provide universal coverage?
I suggest that an acceptable middle ground might be in PHYSICIAN led local Physician Hospital Organisations. That way, neither Gov't nor private payers are given the control. The premium per enrolee could be based on the local Medicare plus 10% as Sen. Kennedy proposes, and the profits could be divided between the players. That would placate the conservative voices who would have a hard time arguing that that was a Gov't grab for power. The private insurance lobby would have a hard time convincing folks that they would be out of business, and that would help physicians collectively exert a measure of control over their destiny. Ironically it might mean a systematic and meaningful reassertion of Collective Physician led patient care delivery. I realize that given the political heavyweights, the financial interests and political egos at stake, this may not be an easy policy development, however given the delicate political balance, the evenly balanced political stakes, the eagerness for a mutually acceptable solution, and the general impression that Doctors have to buy into any new system devised, this may placate all involved forces to the benefit of our profession. I am under no illusion that this will be easy to achieve, however given the stakes for all of us collectively, I feel that if we as a profession take the leadership role in this option, we just might have an audience. Health systems like geisinger are proving their worth, and have an ear with the administration, the insurers have never helped us as a profession, the effects of Gov't control we have all seen, so why not try to take our destiny into our own hands?

Steve Lucas said...

From a business perspective this is a simple issue. The government plan will become the defacto insurance offered, and private insurance will become an add on, similar to plans found in Europe. No business or government entity today wishes to offer medical insurance.

One of the big issues with the auto industry is retiree medical insurance. The effective nationalization of this industry will be the forerunner of government health insurance for all as they try to control cost.

While the screams will be loud from the right, the general frustration with medical insurance in general, will lead to the passage of this type of legislation. Add in the great number of uninsured, many who choose not to have insurance, and the only workable system will be government run.

The real issue for doctors is wrenching free the now secretive payment system to allow for a compensation system geared towards the general practice of medicine. As has been demonstrated, many entering the system will need extensive cognitive services, not only to respond to their health needs, but also to control cost.

Steve Lucas

Jay Larson MD said...

If a public plan was offered with physician reimbursement rates of Medicare + 10%, it would be the absolute end of general outpatient medicine. An internist can not live on Medicare alone (nor Medicare + 10%). This would lead to a significant access issue for patients. Massachusetts has seen access issues since health insurance was mandated and this state has the highest primary care:population ratio in the country.

The bottom line is this...what is the best for the patients.

DrJHO7 said...

Should the public be offered a public plan? And if so, should it look like Medicare? Or something different and better?

Yes, but not a replication of medicare. Preventative services for which there is a convincing evidence base, or substantial consensus within the medical community would need coverage inorder for people to take advantage of the potential benefits of such care. There is a growing sense that a public plan option would need a defined set of covered benefits/care options that satisfy a consensus within the medical community as "essential" for basic health care. This plan should not be developed without substantial input from the medical community, and it should not linked in any way to an RUC-like entity which is self-serving to a faction of medical specialists.

Tax incentives to purchase private plans don't/won't work. Most individuals who make less than $50,000 per year simply won't spend their money on a health insurance premium - they'd take the chance on going bare, as they have.

PHO's won't work in most places because they haven't. There are too many barriers to success: insufficient insurance reserves, patient populations too small to balance the risk, insufficient care management infrastructure and all the re-duplication of administrative overhead cost and manpower.

A public plan could consolidate alot of this overhead, spread out the risk, and allow economies of scale that could come from a large well-run system. Drug formularies could be substantially eliminated and the plan could simply pay defined amounts for classes of drugs and let the dr. and the patient choose which drug they use based on efficacy and cost. Referrals and that whole process could be eliminated - it accomplishes nothing. Expensive care/imaging/technologies: need to be managed in some way. Without this: runaway costs, as we have now.

Medicare plus 10% is better than medicare. In my area, medicare is the best payer. The local blue cross is mcr +/- 1-2%. Everybody else is 10-25% below MCR, which is why I've ducked out of most of those plans. Yeah we deserve more - but who is going to pay it - the uninsured? Yes we could go concierge but that won't work for most of us or most of the patients.

jfddoc said...

In primary care, Medicare is often the 1st or 2nd best payer whereas specialists are able to negotiate Medicare +10-40% from the private carriers.

jfddoc said...

From the New York Tomes:

"But in comments submitted to the Senate Finance Committee, the American Medical Association said: “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.”

“If private insurers are pushed out of the market, the group said, “the corresponding surge in public plan participation would likely lead to an explosion of costs that would need to be absorbed by taxpayers.”