Inevitably, the debate over healthcare reform will inspire some to try to broadcast misinformation, sowing seeds of doubt, false hope or fear in the public mind. I will try my best to rebut some of the more flagrant attempts, on both sides of the issue. In the past, I have complained that progressive single-payer advocates sometimes exaggerate just how much could be saved if we eliminated private insurers’ administrative costs from the nation’s healthcare bill here (For an excellent, even-handed analysis of administrative costs for private sector insurers compared to public sector insurers, see this Urban Institute report)
But this post is not about single-payer. (If you comment, please stick to the subject at hand. Posting off-topic messages is considered “trolling,” and your comment will be removed.)
Instead, in this post, I want to talk about an example of fear-mongering by conservatives. Thanks to reader Brad F. for sending me this link to an AP video available on Yahoo headlined “GOP Challenges Obama’s Healthcare Plan.”
Open the site, and you’ll hear Congressman, Rep. Roy Blunt (Rep. Missouri) delivering his weekly Republican message on GOP.com last Saturday. Blunt, who serves on the House Energy and Commerce Health Care subcommittee and chair the Health Care Solutions Working Group focuses on healthcare reform.
He begins by saying that he agrees with President Obama “that if you like your current health insurance plan, you should be allowed to keep it.” Then, Blunt tells a fib: “But that's not what is currently being discussed in Washington. Some people are spending a lot of time talking about how to spend more of your money on bigger government run programs.”
Here Blunt implies that liberals in Washington are no longer talking about letting you keep your employer-based insurance. This simply is not true. Both the Obama plan and the plans being discussed by most other liberals, including Senate Finance chairman Max Baucus, are very clear: a government-run plan (“Medicare for all) would be an alternative, but Americans would have a choice. They could stick with the plan they have now.
The Congressmen then suggests that if a government insurance plan is available, the plan you have now might disappear. “I'm concerned that . . . [the government] will eventually push out the private health care plans that millions of Americans enjoy today.”
Note the word “eventually.” How is it that, over time, Medicare-for-all might push private health care plans out of the market? This could happen only if so many Americans preferred the government plan that private insurers could no longer find customers. In other words, Blunt is acknowledging that for-profit insurers might not be able to compete with the government run plan.
The Urban Institute is more optimistic about the outlook for private insurance: “Private insurers who are not adding much value and lack clout are likely to disappear in the face of public competition” But “Private plans would not disappear. Private plans that offer better services and greater access to providers, even at a somewhat higher cost than the public plans, would survive the competition in this environment. It is also conceivable that private plans offering a lower cost option—for example, lower premiums than the public plan, say by exploiting care management innovations, and network and payment rate limitations—could stake out a separate competitive niche in some markets. . . Integrated health systems, for example, would likely do well because of their inherent efficiencies.”
Blunt then tries another scare tactic suggesting that if the government comes into the market-place, “This could cause your employer to simply stop offering coverage, hoping the government will pick up the slack.”
Why would your employer do that? Under virtually every progressive proposal for reform, if your employer stops offering you coverage, he has to pay into a pool that helps fund the public-sector plan. Many employers would rather continue offering their own coverage because they know their employees prefer a known (what they have now) to an unknown (a new government plan.) Moreover, they realize that if they drop benefits, and the amount they pay into the national pool does not equal the amount they are now spending on health benefits, some highly-valued employees will expect a pay raise to make up the difference. Employees (and their unions) understand that “total compensation” equals wages plus benefits. If benefits shrink, wages should go up—or employees are taking a pay cut. In the midst of a recession, employers do not want to lose their best employees to a rival that continues to offer benefits. And, they certainly don’t want to raise wages.
The only way employers are likely to begin backing out of health care in large numbers is if the government plan proves so popular that employees are dropping the employers’ insurance. This seems to be what Conservatives like Rep. Blunt fear most: that the government plan will be too successful in offering Americans high quality coverage at a lower cost. Admittedly, that would be disappointing for the for-profit insurance industry, but the goal of healthcare reform is not to “bail out” the industry. The goal is to create a sustainable, affordable high quality system for all. If Medicare-for-all helps do that, more power to it.
Now Blunt switches tactics with remarkable speed. A minute ago, he was worrying that the public insurance might be too good. Here, he suggests it will be a nightmare: “Just imagine a health care system that looks like a government run operation most of us are all too familiar with – the local DMV. Lines, paper work, taking a number. Or how about another government agency – the IRS.
“I don't want our health care to resemble that system and you probably don't either. That's why real competition is the key . . .”
Wait a minute. If the insurance Washington offers resembles the DMV, Americans won’t choose it. Problem solved. (As Rep. Blunt says, “real competition is the key.” Also, why assume that national Medicare-for-all will resemble a local DMV —or the IRS? Wouldn’t it be more likely that Medicare-for-all will resemble . . . well, Medicare itself ? While it’s not perfect, few people stand on long lines to get their Medicare check. All in all it’s a relatively efficient system. Physicians tell me that, in contrast to many private insurers, Medicare actually pays its bill in 60 days. And patients rarely find themselves on the phone with Medicare, asking why it didn’t pay for a particular service.
Blunt then goes on to suggest that, in contrast to the private sector, “the government never gets the price right: overpaying for some services, underpaying for others.”
How does he think private insurers make their shrewd decision about how much to pay? Since 2000, they have been following Medicare’s fee schedule very closely, adding 5% to 15% to government reimbursements. One could argue that Medicare underpays for some services and overpays for others—but private insurers do too. Moreover, we know that in the coming year Medicare is scheduled to take a close look at its fee schedule, raising payments for more effective services, and lowering payments for less effective services, as both the Medicare Payment Advisory Commission and the Congressional Budget Office have recommended.
Some providers fear that a public-sector plan will pay hospitals and physicians too little. But as the Urban Institute points out in its recent report: “Public plans would have to keep physicians and hospitals reasonably happy, otherwise enrollees would exit to private plans.” Moreover, “While the government will likely have considerable power to set provider payment rates, it is not likely to use all the market power it has available. The problem is that the government, as a strong buyer, becomes responsible for the health and stability of the system. If it limits hospital and physician payments too strictly, it faces the risk of perhaps causing hospital closures, slowing down the introduction of new technologies by more than is socially desirable, limiting access to physician services, and affecting the quality of individuals seeking medical education.”
Unlike a private company, the government is responsible for “the public good.” If it forgets that mission, voters will remind Congress, by voting legislators out of office. When it comes to keeping their choice of doctor, the electorate is not likely to cut legislators much slack. By contrast, private for-profit insures are not accountable to the public.
Blunt’s next assertion turns the truth on its head: “Part of that comes from the backward way the government looks at problems. Washington is the only plac
e that tells you how much they care about something based on how much it costs, instead of how well it works.” No, private insurers often decide “whether or not to cover a treatment “based on how much its costs instead of how well it works.” They have to worry about profits for their shareholders.
Meanwhile, this administration is tripling the amount of money that it plans to spend on “comparative effectiveness research.” Why do you suppose they are doing that? Because they don’t care “how well a treatment works.?
In fact, Medicare cares very much about the long-term benefit of the services and products it covers because it knows that its patients are with the system for life.. Private insurers, on the other hand, know that their customers are likely to leave them every time they change jobs. This gives them less reason to worry about the long-term benefits and risks of care.
Finally Blunt ended his Saturday sermon with a Big Lie: “America has the best doctors, health care providers and hospitals in the world. Republicans will lead the effort to make health care work for Americans. We'll also lead the fight against any proposals that undermine your ability to get the treatment the doctor you choose recommends.”
As HealthBeat has pointed out in the past, numerous studies. reveal that the U.S. does not offer the world’s best healthcare. Far from it. As I explain here. “five-year survival rates” for various cancers often distort comparisons, making U.S. outcomes look better than they are.
As for “getting the treatment . . . your doctor recommends” we know that part of the problem in the U.S is that too many doctors do not practice evidence-based medicine. This is why the Obama administration wants to offer them research which provides head to head comparisons revealing how particular patients fare when they receive rival treatments. Physicians can use that information as a guideline (not a rule) to suggest what might be most effective for a patient who fits a particular profile.
Note, the UK makes extensive use of such research to issue guidelines. But it doesn’t tells physicians what to do. Doctors comply with the guidelines about 89% of the time.
In other words, they find the information valuable, but don’t feel compelled to use it.