Establishing a government-run public health plan to compete with private health plans may be a great idea, or the model may truly be rife with those nasty "unintended consequences" its opponents like to cite. I simply don't have enough data to tell you whether it's a good idea for the long term.
But what I can tell you is that as a blunt instrument, it seems that analysts are pretty much agreed that a public plan will have the immediate effect the Obama administration is hoping for, which is to drive down private health insurance costs. A new study by Lewin Group is only the most recent to project that a government-run plan would come in with much lower premiums than its private competitors--in its case 20 percent lower. And sure enough, private health plans will have to respond with big price cuts of their own.
True, if you're a financial manager reading this, one of those pesky "unintended consequences" is probably that you'll find that your reimbursements falling. Private health plans are going to pass those price cuts on to you, after all. Hopefully, you'll make up the difference by seeing far more insured patients walk in your doors, a deal that's pretty much on the table under any version of reform, but yes, for the short term you'll be in a scary place. Hopefully, though, the longer-term picture includes a more-stable system that works better for everybody.
Overall, the bottom line is that at present, giving way on a government-option plan is a pointless compromise that wastes not only an enormous amount of Congressional time and effort, but also a unique moment in history when the President, the Congress and the people are agreed that it's worth seeing everyone take some big bruises to fix some of health system's biggest problems.
Namby-pamby half-measures like a health co-op, which, let's face it, still has an incentive to keep its medical expense low so it can grow and attract new members, are feel-good nonsense which do nothing to take advantage of the government's powerful position in the industry. Create health co-ops and you've only added another player to basic capitalist cycle, not-for-profit though it may be.
So I say, come on now, Congressional leaders. Don't pussy-foot around--be honest and forceful about what the government option is intended to do. It's designed to hit the health insurance industry with a clue-by-four and let it know that the time of extreme profit-taking is on its way out. If you can't get that through, so be it, but at least you'll have fought the good fight. Don't let this once-in-a-lifetime chance to save countless Americans' lives and health go away because you refused to take a real stand. - Anne