The Hacker report has just come out, and it does what it sets out to do. It proves that publicly provided healthcare is cheaper and more effective than privately provided healthcare. It then tells policy makers how to make public healthcare more expensive than private healthcare, because, as usual, the study is driven by political calculations rather than by the numbers or the logic of the report itself.
The key paragraph is this one:
A new public plan partnering with Medicare would have substantial incentives to invest in quality improvement as compared with private insurance. For one, private insurance will always have limited incentive to treat those with chronic and costly disease, yet they are the ones most in need of innovations in treatment and care coordination. A public plan, which by nature will take all comers, is best able to treat them and disseminate the lessons learned to the private sector.
What Hacker has just admitted here is that private plans don’t want to take on the most costly patients and that those patients will be shunted into his proposed public plan. The cost savings in Medicare come in part from it being more efficient, but they also come from the fact that Medicare insures everyone in its age category. It gets the cheap people and the expensive people, and they even out. If private plans are able to cherrypick the profitable and cheap clients, forcing the expensive clients into a public plan, the public plan will not be cheaper than private plans.
This is a plan which is tailor-made (though, I’m sure, unintentionally) to improve private insurance companies’ bottom lines and take the most expensive people off their books.
This is what happens when you do a study whose conclusions are determined not by the numbers or logic of the subject being studied, but by political calculations. You wind up with bad policy, and since some polls show universal health as being favored by a majority, it’s not even clear to me that you wind up with good politics, especially since if the past 8 years should have taught us anything, it’s that bad policy is bad politics.
Related posts:
- Public Option Expert Jacob Hacker on Why the Blue Dogs are Blowing Smoke
- Jim Cooper, Avowed Supporter of Public Option, to Move to Stall Progress Toward Healthcare Reform
- CMS: Public Option Much Cheaper Than Private Insurance, and Would Make Private Plans Cheaper, Too
- Healthcare: Hagan, Bingaman Holding Up Public Plan in HELP Committee
- Should the Public Option Use Medicare Payment Rates?





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Thanks Ian.
digg
The US will eventually do the right thing, after exhaustively considering all other options.
The US will eventually do the right thing, after exhaustively
consideringimplementing all other options.fixed it.
Why, that’s pretty much how private and charter school scams operate, too. Public schools can’t cherry-pick their kids to make their stats look good.
Typical of American politics. If something works, then obviously something else must be done.
Ian, this is why the GOP has been working so hard to destroy the VA — because after Clinton got it fixed up, it was (at least up until Bush’s second term) beating all US private hospitals (yes, including the Mayo) in every health-care category imaginable. (And no, Walter Reed is NOT a VA facility — that’s run by Republican-donor contractors for the US Army.)
Problem is that this fits too well with Obama’s campaign policy paper on healthcare insurance. And I think that it’s obvious that the new administration and Congress will go after this program almost immediately.
You may know that the Obama ‘campaign’ is working to maintain and grow its constituency with local meetings feeding a national database/organization. (I’m in one here in WA state.) Meetings were held last weekend, and opinions concerning national priorities are being collected. Our group sent in 4, including universal single-payer health-care insurance. I suggest that it is very important to: 1) join in on this ‘movement’, and 2) emphasize “single-payer”. I would like to see the database reflect an overwhelming bias in this direction.
If something works, and the “right” people aren’t getting rich “enough” from it, then something must be done.
Hacker just can’t bring themselves to say that the ‘For Profit’ Healthcare Model makes a Value Judgment about People – some are ‘worthy’ (profitable) to cover, and some are not ‘worthy.’
The ‘For Profit’ Healthcare Model only wants the ‘worthy’ Americans – the one’s with Money.
The rest of US are just lost causes to them…
They are more Instruments of Self-Interested Social Control (the Money Lobby) than they are of the General Social Welfare (the Hippocratic Oath).
The Healthcare Industry is sick with greed and needs rehabilitation to recover its true function – the Wellness of US All.
The key term is “adverse selection.” The goal being to push the adverse selectors (sick people) off onto the public program and privately insure only healthy people, i.e., to high-grade out the money makers.
and good health (they don’t to have to spend that money once they take it in)
BTW David Leonhardt has another idiot piece up at the NYT. He throws in all the caveats and such about deflation but basically says that the cost of living is decreasing and so that’s a good thing. He then goes on to say that family income won’t decline too much because employers tend to cut jobs rather than reduce wages and the decline in the cost of living will “soften” any hit. Now the only way this works is if you don’t count, the lost income of those who lose their jobs or you average the loss over all families. But this is not what happens in real life. In real life, if someone in your family loses their job that is a loss of 40-50% of your family income and a decrease in the cost of living of 3% is just not going to soften that hit that much.
This is what I find so irritating in Leonhardt writing. He wraps this dopery up in what would be an otherwise standard analysis. There is just no excuse for it.
Link:
http://www.nytimes.com/2008/12…..dt.html?hp
You might say it’s “survival of the
fittestwealthiest” medicine.Maybe written instructions were needed in this election – Do public health provision or don’t come back.
most recent post at PNHP (Physicians for a National Health Program)’s blog:
Speak up at Sen. Daschle’s house parties
my bold.
there is more info on the house parties, etc at the link. this sounds like a great way to get involved to make sure the single payer message is part of the process.
The Status Quo must be maintained so that people like Joe Lieberman and family can continue to make millions from Big Pharma and The Big Hartford Insurance Biz.
at some point even the dark siders have to realize that laissez faire capitalism and healthcare just doesn’t work to even the advantage of the wealthy. If treatment decisions (by doctors beholden to the drug, healthcare technology, and insurance companies) are made on the basis of maximizing profit for big pharma and big insurance, then even the rich can’t be confident they’re getting decent care. In fact, they’re more exploitable since they can afford to pay for inappropriate treatment more than the rest of us. And they tend to be older. The bypass versus stent debate is a case in point – doctors were routinely prescribing stents instead of needed bypass surgery for heart disease ’cause the stent manufacturers were effectively giving them huge kickbacks.
And if you’re single, it’s a loss of >99% of your income. Well, will be a loss of damn near 100% of my income and the 401K investments are not worth enough to be a cushion like last time.
What’s this moron’s address? Because I’m sure it would be good for him to decrease his living expenses by taking in a housemate!
Guess I’d better go write a letter to the NYT…for all the good it’ll do.
FunnyD
I urge everyone to find a way to apply pressure on this issue. This is a critical issue, I’ve been passionate about for years.
Obama’s clearly not in our corner on this one (like many others) but there’s at least an outside chance we can grab him and drag him into our corner along with enough Senators and Reps to make it happen — but it ain’t gonna be easy.
Listening to some of Obama’s statements on healthcare, I wonder if his proposal to offer the federal plan in parallel to private insurance is not a backdoor approach to a single-payer system. I suppose it depends on who is allowed to sign up to the public plan. However, if I were running a company, and the public plan provided comparable (or better) coverage at lower cost, I would be a fool not to switch my employees over to it as long as I could legally do so. If enough companies did this, the market for comprehensive private insurance would shrink to a niche, and we would have a de-facto national health plan.
I’m sure I’m being over-optimistic here, but what the heck, I can dream.
Tonight I will be attending a Health care reform community meeting with many of the Obama volunteers from my area. Am looking forward to getting a greater sense of the extent of single provider sentiment. Most that I have gotten to know see this as the goal.
It’s more basic than that.
What Hacker has admitted is that private health care plans don’t want to provide health care.
Any health care.
Private plans are in business to accept premiums and deny claims.
The claims that get processed are just for show.
The US Healthcare system practices rationed health care, like all health care systems.
Except in the US the rationing mechanism is money. Not potential effictiveness of treatment.
Is anyone doing this (from Change.gov)?
http://change.gov/page/s/hcdiscussion
From Hugh’s NYT Lionheart:
These laid-off workers will find other means of putting food on their families. B&E, Carjacking, and armed robbery present myriad opportunities for these unfortunate bastards. Hopefully those of us who retain employment, won’t get caught in the crossfire.
Just finished a good read on how the medical
professionbusiness has arrived at its current state: Hippocrates’ Shadow by David H. Newman, M.D. Highly recommend reading it . . . and then share it with your healthcareprofessionalsbusinesspeople.It is my perception that what will ultimately emerge on this is a public program and the opportunity for private to coexist. It is important to me that private pay their fair share of covering those with preexisting conditions. If they are allowed to dump those with greater need of health care on the public sector there will ultimately be extensive truthiness spewed by the rethug/industry to propogandize.
It’s worse than that.
In the US, health care doesn’t exist!
What we have instead is an insurance game, where everyone who has money sends it in to the insurance companies. Most of those people are given a false sense that they have medical coverage (until they get into the denial wars, or until bird flu rampages through their child’s classroom and doesn’t care which kids’ parents have insurance).
All the while new, stronger strains of tuberculosis and other communicable diseases grow among “uninsured” populations.
And “insurance” has killed any chance of developing an effective and robust public health system.
Which we actually could have.
The question is: Are we as wimpy as Harry Reid? Or are we going to demand single-payer until we get it?
guess i should leave a link to one of my previous comments on why HCAN is a con – that’s “Health Care for America NOW!” the con, not to be confused with the good single payer folks at Healthcare-Now (HC-N!)
Let us not forget the For Profit Hospital Sector in our list of pigs feeding at the Private Healthcare trough who stand to lose big if single payer were to be implemented. The Hospital Corporation of America Inc (HCA) is often in the news for having problems, such as this report from California:
hope so. see my comment @11.
I meant to say, former Senate Majority Leader Bill Frist’s Hospital Corporation of America Inc (HCA)
Isn’t that the truth.
especially for ian – but also for anyone who’s read my two prior links above about the HCAN con. here is more from PNHP
Single Payer to HCAN: We Will Not Not Be Listened To!
What HCAN is really about…
also, lot’s of good info from PNHP’s single payer resources and fact sheets
yep. and more widely than this issue, but that perhaps is another topic. :(
That’s really the sinister part, isn’t it?
See my comment (#7) and selise’ (#16) comment above. Join one or the other, or both.
thanks paul. i somehow missed your comment earlier. doing both sounds good to me.
Raise not thy impious hand against the great god Mammon!
Of course there is no reason at all for there to be private, indemnity, insurance in a field that so cries out for social insurance that even the US, home of the worship of markets, has socialized the payment for medical care of the elderly, who generate most of the need for medical services. We call it Medicare, and of course extending it to all would be even cheaper, more rational, and less distortive of the medical care it pays for than any sort of hybrid system in which the private sector is allowed a carve-out for no reason other than to let the market have what we imagine is its due.
I know that the cynical will blame the fact that we will almost certainly end up with a hybrid system anyway on the Golden Rule, “He who has the Gold makes the Rules.” But while I would not discount the effect that campaign contributions from the industry have on Congressional votes in that great majority of issues that attract little or no public reaction, you would think that the medical coverage crisis is of sufficient magnitude that it will generate enough public attention that the politicians would find more votes demagoguing the issue than taking money from an industry that would, after all, be destroyed, and in no position to take campaign contribution vengeance on them if only they could find the courage to slay the beast.
I really think the problem is more basic. Market solutions aren’t the religion of the masses. They just want to keep their jobs, their retirements, their kids’ college funds and their health care; and any way that can be done is fine with them. So most of the electorate wants Medicare for All. But an unquestioned faith in markets is the opium of the educated classes. I really think that the average Congresscritter, and almost all of the folks in intellectual attendance on them and our public life, even those few whose paychecks are not signed by big business, just take it as axiomatic that, of course, a government-run anything will be badly run, compared to the much-vaunted free-market efficiency.
Thanks for the post. I didn’t know about this report, and will download it and take a close look.
Developed countries that have contained costs and maintained quality, while keeping a private health insurance industry, all require that ALL insurance providers (public and private) to accept all applicants, and require ALL of them to provide a standard basic policy. Is there any empirical evidence that the Hacker approach will work?
Stiglitz was also here over ten years ago (with Akerlof), in models related to those that describe the current financial market crisis. Without requiring that insurance providers take all applicants, and provide standard policies, there may be no stable economic equilibrium. If that is the case with the US health care insurance market, the creative destruction of unregulated free market competition will be merely a complicated machine tearing itself apart over time.
So, is there any theoretical or empirical evidence that the Hacker approach will work?
So, “Hacker report” seems more like a 21 page “thnk piece” than an in-depth analysis. Does this report have some special significance for policy making? Is this a big deal or just another think tank policy brief?