Monday, June 29, 2009

Health Care: Coalition Against Competition Edition

Josh Marshall: Don't Make Us Work For It

More from the evolving story of the Coalition Against Competition. This from TPM Reader RP ...

Not getting enough notice is the fact that in manylocal health care markets there are very few insurance companies offering care plans. In many places there are one or two companies that provide most of the insurance. Particularly true if you set aside the uninsured people and the people the plans reject who can only get coverage from the high cost state coverage pool. If you look at US Representatives and Senators who oppose the Public Option, in many cases they are receiving political funds from insurance companies with near monopolies in their coverage locations. TPM Muckraker could/should compile a table of representatives, the health care insurance companies donating to them and the percentage of their markets they control. That would tell a big story about what is really happening.
  • Roth (TPM): Health-Care Market Characterized By Consolidation, Not Competition

    As Congress gets set to take up health-care reform, there's a crucial piece of data that hasn't received nearly the prominence in the debate that it deserves.

    Defenders of the status quo on health care like to point out that a public option will destroy the system of robust free-market competition that currently exists.
    Sen. Richard Shelby (R-AL), speaking earlier this month on Fox News, called President Obama's plan the "first step in destroying the best health care system the world has ever known." A public option, Shelby added, would "destroy the marketplace for health care."

    But the notion that most American consumers enjoy anything like a competitive marketplace for health care is flatly false. And a study issued last month by a pro-reform group makes that strikingly clear.

    The report, released by Health Care for America Now (HCAN), uses data compiled by the American Medical Association to show that 94 percent of the country's insurance markets are defined as "highly concentrated," according to Justice Department guidelines. Predictably, that's led to skyrocketing costs for patients, and monster profits for the big health insurers. Premiums have gone up over the past six years by more than 87 percent, on average, while profits at ten of the largest publicly traded health insurance companies rose 428 percent from 2000 to 2007.

    Far from healthy market competition, HCAN describes the situation as "a market failure where a small number of large companies use their concentrated power to control premium levels, benefit packages, and provider payments in the markets they dominate."

    So extreme is the level of consolidation, in fact, that one former top Federal Trade Commission official working with HCAN has sent a letter to the Justice Department's Antitrust Division, asking for an investigation into the health insurance marketplace.

    The problem is most acute in small rural states, according to the report. In Shelby's own state of Alabama, the biggest insurer, Blue Cross Blue Shield, controls 83 percent of the statewide market. There, and in nine other states -- Hawaii, Rhode Island, Alaska, Vermont, Maine, Montana, Wyoming, Arkansas and Iowa -- the two largest health insurers control at least 80 percent of the market. So much for Shelby's "marketplace for health care."

    The report doesn't consider how this reality stands to affect the forthcoming congressional battle for reform. But extreme consolidation may actually be making it harder, not easier, to win support from lawmakers for a public option.

    That's because insurers who control large swathes of a given market stand to see their bottom lines particularly threatened by the introduction of a lower-cost public option. So, in turn, they'll be particularly aggressive in pulling out all the stops to pressure lawmakers to oppose the plan. Given the healthy amount of campaign dollars that some wavering members take in from the major insurers, that's hardly encouraging.

    Of course, the Senate is where the major legislative showdown will likely occur. So in some forthcoming posts, we'll be taking a close look at just which senators have taken money from insurers who control major percentages of the state-wide market -- and where those senators stand on the public option. Stay tuned...

DemfromCT (DK): Your Abbreviated Pundit Round-up

Monday punditry. Now get to work.

NY Times editorial:

Congressional committees heard a lot this month about the devious schemes used by health insurance companies to drop or shortchange sick patients. It was a damning portrait — and one Americans know from painful personal experience — of an industry that all too often puts profits ahead of patients.


EJ Dionne:

The first is the absence of substantial Republican support for comprehensive change. Max Baucus, the Democratic chairman of the Senate Finance Committee, has done everything short of making ethanol a reimbursable prescription drug to win the heart of his good Republican friend from Iowa, Chuck Grassley...

The key is that no compromise should be allowed to undermine the long-term goals of covering everybody and containing costs. Concessions made for purely political reasons could produce an unworkable monstrosity of a bill.

Michael Barone: Govt. is always expensive and private is always efficient. Don't let Enron and the banks fool you, and pay no attention to the hearings on the Hill about the insurance company methods for turning a profit. There's a monster under the bed, it's called socialism, and it will eat you if you look.

  • Dougj sees a Setup for a sellout

    E. J. Dionne has an interesting piece on how the dynamics of the Senate may doom health care reform:

    I’m told that Grassley, under immense pressure from Republican colleagues not to deal at all, has informed Baucus that he cannot sign on to a bill if it is supported by only one other Republican, the sensible Olympia Snowe of Maine. Grassley needs more cover from more conservative colleagues.

    This creates a terrible dynamic in which Baucus is pushed toward one concession after another. It’s a setup for a sellout. And the compromise Baucus is likely to produce cannot be the final word.

    This makes it sound like Democrats only need one more vote to get a bill through. Here’s my question: how would the seating of Franken affect this? Does anyone have a reasonable headcount for how many votes a reasonable bill might get? Is it the entire Democratic caucus save Nelson and Lincoln? And how far gone are Nelson and Lincoln?

    And another question: are private insurers especially opposed to combining a public option with a tax on employer-provided health care subsidies? It seems logical that they would be, but I haven’t heard this, only that they are opposed to the public option.

Yglesias: Public Plan’s Not All That Matters, But It Matters a Lot

Jon Cohn makes an important point that I think all the smart health care writers are making—the presence or absence of a public option isn’t the only thing that matters in the health care debate. There are a lot of moving pieces to this puzzle, and things like how much subsidies are available to people to buy insurance, what do we do with Medicaid eligibility, what kind of minimum benefits package will people have, etc. are also crucial.

That said, I think there’s actually a pretty good reason for activists to be putting a lot of emphasis on the public option. Things like subsidy levels and eligibility points and the details of benefits packages are the kind of thing that, if health reform passes this year, are bound to get tweaked over and over again in subsequent years. The long-run trajectory of these matters is going to depend more on who wins elections, on the state of the overall budgetary picture, on the idiosyncratic desires of power members of congress, etc., than it will on what the initial starting point is.

The public option’s not like that. A well-designed robust public option will, if implemented, become an enduring feature of the landscape that’s unlikely to vanish. By contrast, if a major reform is implemented and doesn’t include a public option, it’s extremely unlikely that the kind of coalition that’s currently pushing for one will be reassembled any time soon. On other stuff, in other words, we can always come back for another bite at the apple. But for the public option, it’s probably now or never.

sgw: David Ignatius Gets It
Very good segment on the "Chris Matthews Show" with David Ignatius explaining the justification for a public option in healthcare reform. I bet Tweety will now come off a lot more informed as well on the subject.

1 comment:

  1. I see the debate is quite wild again, after some months of peace...