Another Case for Public Health Plans

This one comes from New York Times columnist and Nobel Prize-winning economist Paul Krugman, who today offers this advice to the congressional Democrats currently drafting health reform legislation:

1) Don’t trust the insurance industry.

2) Don’t trust the insurance industry.

And his reasoning is simple. Insurance companies — largely responsible for sinking the Clinton administration’s proposed health care overhaul in 1993 — are suddenly promising to take voluntary steps to expand coverage and reduce rates. It’s the industry’s attempt to weaken the push from some Democrats, including President Obama, to include in their health reform strategy the option of a government-sponsored plan — a plan that would compete with private insurers and threaten their profits. But if these private companies haven’t volunteered reforms in the many years they’ve been operating, Krugman argues, they certainly shouldn’t be trusted to do so now.

Back in 1993, the political strategist (and former Times columnist) William Kristol, in a now-famous memo, urged Republican members of Congress to oppose any significant health care reform. But even he acknowledged that some things needed fixing, calling for, among other things, “a simplified, uniform insurance form.”

Fast forward to the present. A few days ago, major players in the health industry laid out what they intend to do to slow the growth in health care costs. Topping the list of AHIP’s proposals was “administrative simplification.” Providers, the lobby conceded, face “administrative challenges” because of the fact that each insurer has its own distinct telephone numbers, fax numbers, codes, claim forms and administrative procedures. “Standardizing administrative transactions,” AHIP asserted, “will be a watershed event.”

Think about it. The insurance industry’s idea of a cutting-edge, cost-saving reform is to do what William Kristol — William Kristol! — thought it should have done 15 years ago.

How could the industry spend 15 years failing to make even the most obvious reforms? The answer is simple: Americans seeking health coverage had nowhere else to go. And the purpose of the public option is to make sure that the industry doesn’t waste another 15 years — by giving Americans an alternative if private insurers fall down on the job.

On Wednesday, during a gathering of advocates for a single-payer coverage system, Sen. Bernie Sanders (I-Vt.) laid out another reason that the care of patients shouldn’t be left solely in the hands of private insurers. “The function of a private health insurance company is not to provide health care; it is to deny health care,” he said. “Every dollar of premium that a health insurance company does not spend on health care needs is a dollar more in profits.”

Ask any doctor who’s haggled with insurers, and they’ll likely tell you the same.