Cleveland, Ohio: You've mentioned before that state-level public options would lack the bargaining power of a national public option. But why is this true? When dealing with hospitals or other providers, wouldn't only the number of potential customers (i.e. enrollees within the state) the public option could offer be relevant? Why would it matter that the public option also has millions of customers in other states who will likely never use the particular facility the public option is negotiating with?
Ezra Klein: There are a few reasons. The first is simple administration efficiencies, and national purchasing. Drug companies, for instance, aren't state-based in the way hospitals are, so that would change things. The other is that eventually, a big enough public option could do what Medicare does and set payment rates for services rather than negotiating with each provider individually. That could bring huge savings, but you have to be big enough to do it credibly. There are no examples I know of it happening on the state level.
It makes sense that a national public option would have more leverage when it comes to national purchasing--and drugs are a great example of something you buy from national organizations, pharmaceutical companies--but it still seems to me that most of what gets paid for in the health care industry (e.g. services offered by doctors and hospitals) is fundamentally state-based or regionally-based. So if weak versions of the public option that rely on negotiation to set reimbursement rates, instead of strong versions mentioned by Ezra that reimburse like Medicare, are implemented I'm still not sold on the idea that they can't work on the state-level, though I'm sure there are reasons it would be at least marginally better to have a national public option.
But, speaking of the difference between the weak and strong public options (which I've mentioned before), I recently sent a quick email to Sherrod Brown on this issue. Senator Brown reportedly played a big role in writing the public option section of the Senate HELP Committee health bill and he's been a huge proponent of including a public option in the final bill. He recently circulated a letter among Senators urging Harry Reid to include a public option in the final (merged) Senate health care bill; the letter picked up 30 signatures.
But the HELP Committee bill's public option is the weak version: it relies on negotiated reimbursement rates instead of pegging rates to those of Medicare, as the House's public option does. So I sent an email expressing my gratitude that he's been fighting so hard for a public option but I also asked why he's pushing for the weaker version instead of the robust version, particularly when the latter could reportedly save $85 billion more over the next decade than the former. Here's what his staff sent back:
Dear Mr. Stanek:
Thank you for sharing your concerns regarding health care.
Since first coming to Congress in 1993, I have refused to enroll in the coverage offered to members of Congress until every American has access to high-quality, affordable health insurance. Should a health care reform bill pass that offers a public insurance option, I would be pleased to enroll.
I strongly believe that our health care system is in need of reform. First and foremost, we must reduce the long-term growth of health care costs for patients, taxpayers, and businesses; protect families from bankruptcy or debt because of health expenditures; guarantee a choice of doctors and health plans; invest in prevention and wellness; improve patient safety and quality of care; assure affordable, quality health coverage for all Americans; and end barriers to coverage for people with pre-existing conditions.
One promising solution to the problems of cost, quality, and access that plague our health care system is to increase competition in the health insurance market. If the private insurance industry was truly competitive, then there would be strong incentives to provide coverage to as many Americans as possible and to build customer loyalty through cost savings and quality improvements. Unfortunately, insurers do not truly compete against one another; instead, they make use of the same basic strategies to earn significant profits. These tactics include selectively insuring the lowest risk enrollees, slow-walking claims payments so they can earn interest on every premium dollar, and denying as many claims as possible.
What the insurance industry needs is some healthy competition from a public insurance option. This option would not replace employer-sponsored coverage and no one would be forced into it; the public option would simply give uninsured or underinsured Americans the choice of enrolling in an insurance plan that does not engage in the same cost-avoidance tactics as private insurance plans do. The public health insurance option would also be a vehicle for improvements in quality, coverage, and provider-access that sets the bar higher for private insurance plans. This option would be available to all Americans: both private and government employees, including members of Congress and their staffs.
Since Congress began debating health reform, an overwhelming number of people in Ohio have contacted me. I appreciate this input and am carefully considering the thoughts, questions, and concerns that you and other Ohioans have shared with me.
In particular, some individuals and small businesses have cited proposals to tax employer-sponsored health benefits or tax the top 1% of income earners in order to help pay for health reform. Others have mentioned proposals that would help pay the insurance subsidies of low-income, uninsured Americans by collecting fees from medium and large employers that do not offer employer-sponsored insurance. Finally, many seniors and retirees have shared concerns about the continued availability of quality health care coverage for older Americans.
The House and Senate are still in the process of drafting this health care legislation and a final bill has not yet been released. The Health, Education, Labor, and Pension (HELP) Committee spent several weeks working to pass a health reform bill that includes 161 provisions promoted by Republican senators. That bill is available online at www.help.senate.gov. Individuals interested in the progress of the Finance Committee’s health reform bill can visit www.finance.senate.gov to review the plan, its proposed amendments, and budget estimates.
I support giving every member of Congress, and every member of the public, time to review the bill. I also strongly agree that health insurance reform must not ignore seniors and must benefit Ohio's small businesses and manufacturers. Please be assured that I am considering all the options carefully. As Congress moves forward on health insurance reform, I will certainly work to address the issues contained in your letter.
If you wish to learn more about my work on health reform as well as the most Frequently Asked Questions (FAQs) that Ohioans have posed to my office, please visit my website at:
http://brown.senate.gov/issues_and_agenda/stories/share/?issue_id=f565635b-e37a-45d3-b15f-edf6b930bd1a.
Thank you again for getting in touch with me on this important matter.
Sincerely,
Sherrod Brown
United States Senator
All good stuff, just not an answer to my question. But he's still my favorite Senator.
Awesome!
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