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POLICY: My last word at TPM–competition within social insurance

So the book club at TPM is drawing to a close. Here’s my first piece trying to explain that social insurance whether voucher/competition-based or fee-schedule-based is pretty similar compared to what we have now. In fact it’s a Distinction without a Difference. But that just seemed to confuse everyone, so I tried again with a larger explanation with a longer title called Social insurance is the key–but it can handle competition, just not the type you’re used to!

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Barry Carol
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Barry Carol

Peter, I don’t think it would be hard to develop a consensus defining what a healthcare voucher would cover. It would most likely be either the standard option Blue Cross plan offered by the Federal Employee Health Benefits Plan or comprehensive HMO coverage like Kaiser. The value of the voucher would probably vary regionally to reflect differences in labor, real estate and other input costs (but not regional differences in healthcare utilization). If healthcare costs continue to rise faster than inflation and GDP, fiscal constraints will be a reality no matter what taxpayer funded system we adopt. I think you… Read more »

Peter
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Peter

“I would prefer a voucher, a reasonable number of insurance companies and plan designs (HMO, PPO, etc.) to choose from, and the ability to buy additional coverage if I want to.” Barry, when you provide a voucher system you then need to define what that voucher buys. In order to give insurance companies a product to sell above what the voucher offers you need to craft the benefits of the voucher very basic to push patients to private plans. Politically, this will be where insurance will craft the voucher system to their own ends. Once this system is in place… Read more »

jd
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jd

The difference between for-profits and non-profits is one of degree on the dimensions that matter. Sure, they pay more taxes. They tend to spend less of their premium revenue on medical expenses, but it’s certainly less than a 5% difference and it only happens because the market and the laws permit it. They don’t have to. I agree that for-profits should be given a chance to show that they can meet higher standards, rather than be outlawed outright. I don’t yet know what I think is the best system of managed competition: setting the stage for a “fair” contest among… Read more »

Student
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Student

ACORN is campaigning to achieve affordable health care for all, more information is available at http://www.acorn.org.

Barry Carol
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Barry Carol

jd, I don’t have any problem with Enthoven’s managed competition concept. What I want to avoid at all costs is a national single payer, one size fits all system that we would be stuck with no matter how expensive, unresponsive and inefficient it proved to be. I would prefer a voucher, a reasonable number of insurance companies and plan designs (HMO, PPO, etc.) to choose from, and the ability to buy additional coverage if I want to. I also do not think profit and investors are the dirty words that many others (including most on this blog) make them out… Read more »

jd
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jd

That discussion in TPM was simply excellent. If only Maggie and Matt had the ears of the political elite. Barry, It is certainly true that utilization is the second half of the equation to reduce costs, and one that doesn’t get nearly the attention it deserves. As someone who works for a non-profit insurer, I have to say that I don’t think for-profits have admin costs 3-4% lower than non-profits. The average might be a point or two lower as a percent of premium, but there is so much variation among plans that the average is not that meaningful. Aetna,… Read more »

Barry Carol
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Barry Carol

Arguments about how best to achieve universal coverage, along with community rating, risk pooling, risk adjustments, etc. are all about healthcare financing. I think at least as much effort needs to go into how to safely reduce healthcare utilization. With respect to the supposedly cost-effective care being provided by Intermountain and Mayo, I wonder how much credit should go to those delivery models and how much relates to the probably much healthier than average lifestyles lived by the populations they serve. As for the issues of for profit insurers vs non-profits, the view I keep hearing is that the for… Read more »