Thinking Shallowly About Healthcare

Timothy Noah has a piece in Slate where he attempts to “explore” the health care crisis, and, shockingly, “discovers” that the answer is the solution he’s favored all along- government control. 

If, as part of health care reform, the federal government were to create a new health insurance program to compete with private insurers—as candidate Obama called for during the presidential campaign—and if that plan were to provide the same payment levels as Medicare does, then the premiums families would pay to participate would be 30 percent to 40 percent less than those paid by families to participate in a comparable private plan. Medicare, because it represents about 20 percent of the entire health care market and because its administrative costs are about one-third those of private health insurers, is able to pay hospitals roughly 30 percent less than what private insurers pay and to pay doctors roughly 20 percent less.

(bolding mine)  So, who does Noah think is going to eat all of these costs that the government is not going to pay?  According to the American Hospital Association, Medicare payments have been falling in relation to the actual costs to hospitals of providing care, and in 2005, 65% of hospitals received less in Medicare payments than they put out in costs of providing the treatment.  Who picks up the slack on that now?  We do.  Does Noah really think that it would be sustainable increase those underpayments- by billions– while at the same time removing the private payers that subsidize the current underpayments? 

Not to mention the millions of doctors who are already opting out of the Medicare system, purely because the payments do not support the paperwork and time require.  Many areas already face shortages of certain specialists- this would surely compound the problem.

The very simplicity and directness of the public option is its biggest political liability. It’s a little too obvious that creating a new health insurance program would harm private insurers. The Lewin Group calculates that if, as Obama proposed during the campaign, large employers were excluded from participating in the plan, then private insurers would lose about 19 percent of their customers. If large employers were not excluded—and I see no logical reason why they should be—then private insurers would lose about 70 percent of their customers. To my mind, private insurers would be left with a solid boutique market (51 million people) for which they ought to be grateful. But, of course, private insurers can’t abide that possibility and will likely do everything in their power to eliminate the public option from health care reform.

Anybody got any guesses on how many businesses Timothy Noah has owned or run?  Wait, none?  What a surprise!  Imagine that you run an internet based magazine, lets call it, oh, “Mate” and the government tells you that it is going to take away 70 percent of your business, but you should be grateful for the amount that you have left.  Insurance companies hire a lot of people, for good jobs, with desks and benefits) that we want people to have in order to be productive citizens (I know, I used to work for one).  Now, lets go and tell around 70 percent of those employees that they no longer have those jobs, but hey, “we’re grateful for the customers that we still have.”


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