I think it comes down to network. Mandating that all people have health insurance is one thing; mandating that all providers contract with a certain payer or payers is quite another (and arguably more difficult). I think that’s the value AHIP sees in a public option; it’s potentially an alternative to making them contract with every tiny little practice.

If there were no public option, the plan could run the risk of no provider accepting the new insurance, particularly if there are 20 new plans with 20 new ways to handle billings/prior auth BS. If there is one new public payer, it’s still no picnic but easier and somewhat uniform. I think this is the biggest lesson learned from Massachusetts: network matters, and, with that, provider costs and negotiating those costs.

The AHIP people know that, for some of the existing plan’s providers, the existing contracts will grandfather them into the network. However, they don’t want to be under any obligation to add every provider. It might be skeptical of me, but I’d guess their hope for the public option is that it takes all the inner-city/rural providers that they can’t use to make any money.

The private plans with their new ‘connector’ products will try to make it is as seamless for the providers as possible and, as it is today, the doctor submits claims to the Blues for Blues PPO, Blues HMO, Blues POS, Blues Medicare HMO, etc. The goal will be to just add a Blues ‘Connector’ Plan that will involve as little new admin work as possible for the provider’s office. What the AHIP people don’t want is some sort of full or even partial risk contract for every little bumblef- provider in the country. It’s sort of risk-shifting, in a way.

As a Kaiser member myself, I'd just add that Kaiser would be an excellent model for a national public health care system. It's easily the most comprehensive, customer service oriented health care plan I've been on. Our prenatal coverage for our soon to be delivered baby has been especially superb.

Admittedly, I feel more secure now that I'm on Kaiser through my wife's employer, rather than out on my own as an individual purchaser. But overall, I have been very impressed.

While Halvorson is "representin," when Karen Ignani endorses, I know we are getting somewhere. Who is speaking for AHIP is what I want to know?

While Halvorson is "representin," when Karen Ignani endorses, I know we are getting somewhere. Who is speaking for AHIP is what I want to know?

Brad,

Agreed. But it's still nice to see the opponents' coalition splintering a bit along a significant line. This kind of system with a public option ain't Medicare for All, but it's a hell of a lot better than just subsidizing and regulating private insurers.

looking at the cost chart it would appear that instead of having a 1 in 5 dollars is spent of healthcare, we move to the dramatic, 1 in 6.

Of course he is progressive, it would take no less than 10 years to be back to 1 in 5.......

A couple of thoughts:

Importantly, what Halvorson has endorsed is not merely a public plan, but a public plan that can use Medicare payment rates -- which is to say, Medicare bargaining power -- to lower prices.

-- The issue isn't "using" Medicare prices, its whether they can be enforced by saying "you take us or else you lose Medicare" to physicians. Its a question of bundling, not pricing. Insurance companies "use" Medicare pricing too-- its just that since they don't have the market share power of Medicare, they have to offer 110% or 115% of Medicare prices.

-- I'd like to hear Halvorson himself say that he's supportive of a public option that requires you to take public option patients to keep Medicare patients. Without this, as you suggested last week, the public option is just another non-profit option. This post seems to project a lot on what Halvorson is thinking.

I have been a Kaiser member since 1963. It is an excellent model for a public plan, although it does include co-payments and also has a few restrictions on what is covered. I have never been refused a test or procedure, and my doctor has never checked with anyone before ordering whatever he wishes. I can change my doctor in minutes, merely by requesting that I see someone different, although mine is excellent and has been my Doctor for almost 30 years. I have a choice of dozens of family practice doctors, internists or gynecologists as my primary doctor. There is NO paperwork. I show my card, pay my co-payment, if any, get a receipt, and that's it. Now, all the records are on computer, and my doctor inputs everything. It is available to every Kaiser doctor immediately. The pharmacy and lab can see all the orders. I can check on the internet for test results, and can message my doctor with questions.

Kaiser spends its "profits" on research and improvement of its services, since it is non-profit, has no stockholders, and does not have to answer to the market as such. It only has to cover its costs. The salaried doctors can lead reasonable lives, knowing that their patients will be cared for even when they are on vacation or with their families. And yet, I have gotten very personal care from my Doctor, who takes an individual interest in me and in my family.

I am not at all surprised that Kaiser has such a CEO, and that he has this position. Bravo!

Ezra,

As I suggested earlier, it did seem you took some artistic license with this post. That's being kind. I know you didn't mean harm, but you let your own reform hopes get in the way of the journalistic analysis.

wisewon hit on the key point: will physicians have to accept the public plan in order to accept Medicare? If so, then the new public plan will immediately have a huge "network" and be able to use the lower Medicare rates, and will either flat-out outcompete private plans or force major changes by them in order to compete.

Like Medicare and Medicaid, it will lead providers to cost-shift to private plans, because the private plans won't have the same rate-setting power, accelerating the cost advantage of the public plan and forcing major industry consolidation.

However, if physicians can accept Medicare without being forced to accept the public plan also, then all bets are off. Note: in that case it doesn't matter whether the public plan sticks with Medicare rates or has to negotiate with providers like private plans do.

If it sticks with Medicare rates, it might find it has a very small network, gets dissed by providers, and thus isn't as popular with patients as people expect. If it has to negotiate, then the public option will hardly be different from the current non-profit private plans out there. It will be very similar to the non-profit Blues.

I am assuming that the public plan would have to pay its own way and wouldn't be subsidized by taxes more than any private plan.

By the way, providers can figure out as well as private insurers that the public plan would hurt their bottom line. Don't expect resistance to a Medicare-public plan combo to come only from insurers. AHA and AMA will very likely align with AHIP on this.

Why can't the public option be designed in such a way that it's good for insurers as well as for consumers?

First, as others already noted, the public plan will have the ability to set basic standards for things like billing and other administrative costs that currently increase the costs of health care and eat away at insurance company profits.

Second, the public plan will likely attract the sickest patient population, which places the public plan at a comparative disadvantage compared to private ones. Moreover, private health insurance plans could benefit by having a healthier population that requires fewer services/ costs.

Finally, the public plan will probably not be able to undercut the private health insurance plans as much as people think. In terms of doctor payments, we know from Medicare that physicians are going to resist any substantial pay cut, and and even if the public plan was able to pay doctors less, the private plans could use this as a basis to negotiate lower fees of their own. In terms of overall premium costs, the rate that the public plan is going to be able to charge largely depends on the subsidies it gets from the government, which in this economy are likely to be smaller than advocates are pushing for.

Overall, this debate over the public option seems to have spun into an ideological debate over public vs. private without anyone stopping to think about how the public system can work with the private system to create a better system for all involved.

I'm surprised by folks who LOVE kaiser. I am a a "member" and personally fear it may become the US model.
I pay my KP premium out of pocket (about one quarter of my income) for an individual plan and it has gone up on average 25% annually for the last six years. I live on a fixed disability income with no increase for cost of living. I do four visits a year with four visits to the lab.
Do the math...
Needless to say in the insurance world I am a pariah and am only on KP because they were forced to take me by HIPPA legislation. I can't just leave because no one else would take me. They are free to increase their rates as much as they want (according to the CA Dept of HMO's to whom I complained.
I lived in France half my life and much preferred government owned and run hospitals.
Greg

ps If I am indeed a "member" of this "non-profit" then why am I not invited to the general assembly and why are the "profits" not redristributed to us as "members"?

Halvorsen gave a talk on public radio last year, outlining what sounded to me like a very sensible approach to tackling the very major costs of treating the three most expensive conditions: asthma, diabetes, and heart disease. His point was that you can make enormous cost savings while improving care, by combining prevention with close monitoring and maintenance-type treatment, thereby avoiding most emergency room visits. Kaiser can be very effective at this sort of thing because of their 'one-stop-shop' structure, and great size.
I can't say whether the policy statement + signing-statement discussed here is as good as we would hope, but I do think he's the sort of CEO that ought to be brought into the public discussion on this, and would hope he can be a cheerleader for some real reforms. We need industry cheerleaders to weigh against the right-wing noise machine and lobbyists.

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ed hardy clothing