July 10, 2009

Solving the Problems of a Public Health Insurance Plan

Each objection to a Public Health Insurance Option, aka Public Plan, is important to consider, and with some thought, each objection can be completely addressed and solved in a good way.

It just takes application of knowledge and a certain kind of logical thinking. But good solutions for all problems arising around a Public Plan exist.

In my main post on Health Care, including updates, we've now addressed:

  • Fixing the Cost-Spiral

  • Drug Costs

  • Freedom of Choice of Doctors/Treatments

  • Non-interference between Patients and their Doctors

  • Freedom for Innovation

  • Complex Conditions

  • Complex Diagnoses

  • Complex Outcomes

  • Setting Prices in a Public Plan

The last main part, which I've worked on today, is how a Public Plan can set treatment prices in a rational market-fashion, leaving complete freedom of choice for patients and providers, and without an unfair advantage over private insurers (who themselves could use a similar system or even use the public plan prices). See "Update 7-10" in the post.

In brief, the Public Plan should be, and can be:

  • Universal

  • Cost-efficient

  • Affordable even for most lower-income households

  • Encouraging of innovation

  • Completely compatible with private insurance

  • Allow 100% freedom of choice of doctors/providers

  • Use market mechanisms to increase flexibility and evolution

  • Gradually encompass new treatments as they become available


  1. Here's your buyers strike that Bill Moyers Journal blog administrators refused to allow me to post.

    I just watched Bill Moyers Journal tonight. He lost me as a viewer.
    After I watched the program on health care, I wanted to post a link
    to a single payer petition and his administrators refused my post
    but allowed a lot of other people's posts. Apparently Moyers doesn't
    like a call to action on single payer. He appears like a fake liberal to me. I will not watch his program for awhile after this affront and
    lack of free noncommercial speech. I wanted to post this call to action
    listed below. IF you agree with me that he has censored then complain to him at pbs.org on his blog.

    The Liberal Democratic Party of the United States functions as a progressive legislative political party.

    We do not run candidates for office. We usually support candidates of the Democratic party of the United States.

    We do not handle money and we do not charge money for membership and we do not raise money.

    So you can join our party and still remain a a member of the Democratic, Green, Labor, or other progressive party you belong to.

    Instead we create referenda on legislation by boycott petitions where we target the companies which sell consumer products and associate themselves with conservatives. We demand that these company CEOs get the legislation that we want and until that happens our members send letters to these companies indicating we will boycott them.

    Why do we use boycotts? Well I hope if Martin Luther King Jr., Cesar Chavez, or Mohandas Gandhi appeared alive today that they would advocate boycotts of the friends of those who oppose our legislation, in a climate where those who donate money to office holders exercise too much influence over legislation.

    Please sign these petitions on single payer health care.



    Also sign these petitions.




  2. democratz, in order for the goal of Universal care to be achieved, we need powerful reform that changes the long-term trend of upward cost of both health care and drug costs.

    Otherwise the cost trends will destroy the Public Plan within years, even after the initial one-time reduction in cost Single Payer for instance would create.

    Let me illustrate. Set current health care costs for the whole nation to be 100, already causing trouble today at this high level. Going immediately to Single Payer would save a huge 17% or so on one hand, and add an initial, temporary spike in new patients and a little cost of catch-up maintenance care and a slight initial reduction in emergency care. All of these effects are one-time effects.

    But...meanwhile the long-term trends in cost that are caused by other causes entirely would still be there for the reasons I've laid out in this blog in June here:


    So the national inflation-adjusted (real) cost changes from year to year with Single Payer but no other cost reforms would look something like this in yearly steps:

    Year 1: cost = 100 (before single payer)
    Year 2: cost = 88(single payer comes online saving 17%, but also new patients begin using routine healthcare creating some new cost)
    Year 3: cost = 89 (optimistic projection of positive effects of routine care to reduce emergency care costs, but also long-term trend factors still at work)
    Year 4: cost = 93 (92.6) (long term trend of 4% continues. one-time effects are complete)
    Year 5: cost = 96
    Year 6: cost = 100
    Year 7: cost = 104 (remember this is an inflation-adjusted "real" number)
    Year 8: cost = 108 (cost pressures harming nation)
    Year 9: cost = 113 (112.6) (costs become crushing)
    Year 10: System fails, and must be reformed.

    Here's how to change the long-term trend in costs: