September 26, 2009

(Update) Mayo Likes a "Public Option"...But America Is Beginning to Want Something Real (65% Favor...)

Update: Mayo's own Health Policy Blog lays out the Mayo Position. See link at the end of this post.

Searching for video of Senators talking about the markup of the Baucus bill today, I blundered into this, and don't have another source yet, but...

Senator Ron Wyden of Oregon at about 11:30 in the video: "...The Mayo Clinic, for example, said it was okay if you did the Public Option with an approach like members of Congress want...."

Now, I've always considered the "Public Option" (as normally meant, a competing, federally-run insurance plan as an option for insurance shoppers) to be a way to accelerate reform. When a big insurer, federal or private, has more incentive to find ways to innovate such as incrementally beginning a pay-for-outcome-over-time system, then needed change will happen sooner. Note that a public plan (aka public option) should be on a level playing field with private plans, and Senators say such a plan would be -- that is, it gets no subsidy at all and therefore must support itself only from premiums. The low-income subsidies to people to help them purchase insurance can be used to purchase either the public plan or a private plan. So the playing field really would be level. is not perfectly clear whether the "public option" Mayo is said to support is actually a government-run insurance plan (aka "public plan") or is instead simply a government-run exchange with private plans alone where plan evaluation tools help policy buyers choose between clear options, and none of the plans are tricky plans with clever loopholes and traps meant to fool policyholders. This kind of friendly exchange with reliable plans would be like the Federal Employees Health Benefits Program (explained here by NPR.)

Senator Wyden (who by the way is also offering a great amendment to open the new exchanges to everyone) appears at 10 minutes into the video:


Here's an NPR interview with Dr. Cortese on 9/22. He likes the idea of a "public plan" being like the government-run Federal Employees Health Benefit Program (FEHBP).

Until I read or hear otherwise, so far as I know, the "public option" Mayo supports is a friendly exchange (marketplace) like the FEHBP. (Update: See this link for Mayo's own statement on this.)

Mayo is concerned that there not be imposed price controls. That is, price cuts that are across the board, indiscriminate to the relative value of one treatment over another. As some types of treatment offer much greater value (better quality for their price), cutting reimbursement indiscriminately is un-marketlike, that is such indiscriminate pricing would sometimes throw the baby out with the bathwater.

All this said, few in Washington, or that have a household income above $90K/year may realize that there is a public groundswell just beginning (the real thing, not the fringe "teabagger" type)...because the "middle class squeeze" has been greatly intensified by rising health insurance costs, and the greater majority of Americans simply will begin to demand that there be some kind of genuine cost control on health care, of some sort or another.

If 5-10 million Americans are tea-baggers and their sympathizers, that's one thing.

If 50-60 million Americans have distrusted Government in general, that's another.

If there have been 80-120 million Americans that wanted Single Payer system, that's another.


But if 140-180 million Americans start to become more restless about cost-of-living squeezes and want there to be a profound change in health costs, and start to demand some kind of major government intervention, that's another thing altogether. An animal of a whole different size.

Washington has limited time to be ineffective I think

We've lived in a bubble in a sense, since World War II. We've been a privileged nation. Now that certain of our advantages have been leveled with the rest of the world, Americans are entering into another kind of universe than the one they are accustomed to.

The old political games that the parties have played are coming to an end. A forced end.

We will become more like the rest of the world, by necessity. Or we will live in the fading glow of past glory days, looking backward in stagnation.

Update 9-25:

A CBS/NYTimes poll finds 65% of Americans favor the Public Option (!):

...the Times/CBS poll asked: Would you favor or oppose the government offering everyone a government-administered health insurance plan — something like the Medicare coverage that people 65 and older get — that would compete with private insurance plans? The poll question was phrased generally so that it could be asked in repeated surveys over time regardless of any specific legislative proposal.
With the question asked that way, most respondents supported the idea, with 65 percent in favor, 26 percent opposed and 9 percent offering no position.
Update 9-27:

Mayo lays out its position more clearly. Essentially the position I've surmised above. Granted this is Mayo's position, and should be accorded much weight....

But the best of good alternatives for the insurance part of a "public plan" (after we have the even more important, invaluable insurance exchanges, and these made open to everyone, as Wyden proposes) is a true Public Option (a government-owned insurance plan supported by premiums from policy holders alone (no other subsidies), that competes with private plans on a level playing field where the subsidies for low-income insurance buyers can be used to purchase any plan, public or private.) And, just as Mayo prefers, that this Public Plan not use a "price control" approach, but instead solicit bids as I suggest and institute paying for value as I suggest here in my description of the best way to run any insurance plan, public or private.

We are getting there. We are so close now. We have exchanges proposed. Wyden suggests we make them open to everyone, just exactly as they should be. And, finally, the most seemingly challenging part of reform -- paying for value (paying for outcome) -- itself can be done incrementally, in a way that everyone can embrace....

Update 10-3:

Mayo lays out its version of good health care reform.


  1. Mayo has said it does not want a "Medicare-like" public option, because Medicare now does not pay for quality (or "value") but rather for quantity. Medicare is also is currently paying below cost on a national basis, but payment is lowest in the midwest.

    Mayo is also working with Senators Baucus, klobuchar, Rockefeller and Cantwell to make changes to Medicare to begin to pay for value.

    Mayo also wants to see everyone covered.

    That doesn't answer the question about a public option per se, but hopefully it helps explain their position. For additional detail, you can check the Mayo Clinic Health Policy blog.

  2. Thanks, Auriandra. I gradually developed a detailed general system of how an insurer (public or private) can set up pay-for-value, or pay-for-outcome-over-time here on this blog (link below.)

    One interesting thought I had a few days ago is that a pay-for-outcome system of the type I advocate can be implemented incrementally. I've updated the post on pay-for-outcome (value) with a specific way to incrementally begin to implement pay-for-outcome. This method of implementation is so modest and reasonable that even the most cautious could embrace it.