The public discourse is reaching new levels of ugliness, as illustrated by an audience at a GOP campaign event cheering the idea that that those without health insurance should just be left to die. (Krugman, P. Free to die. Op-Ed. New York Times, September 16, 2011: A23). GOP presidential hopefuls have no solutions to offer except the “freedom to choose” (your own fate!) and the private marketplace (which increasingly excludes those who cannot pay its rapidly increasing costs). In fact, they exacerbate the problem, under the guise of fiscal responsibility and austerity, by cutting government safety net programs while at the same time trying to exploit Medicare and Medicaid by further privatization.

These are some markers that show some of the impacts of this war:

• According to the U.S. Census Bureau, in 2010 49.9 million Americans were uninsured (which understates the problem since anyone with insurance for even a small part of the year was considered insured), the median household income was $49,445 (a drop of 2.3 percent from 2009), and 46.2 million people (including 22 percent of the nation’s children) were in poverty (the highest number in the 52 years for which estimates have been tracked). (U.S. Census Bureau. Income, Poverty, and Health Insurance Coverage in the United States, 2010)

• In his recent editorial in The Progressive, Matthew Rothschild notes that, over the last 40 years, the top 0.1 percent of the population (152,000 people making more than $5.6 million a year) skyrocketed by 385 percent while the income of the bottom 90 percent (about 137 million people) dropped by 1 percent.(Washington Post) In the last ten years, the median income of working-age households has dropped by more than 10 percent (Economic Policy Institute). (Rothschild, M. Enlist for class warfare. The Progressive, September 20, 2011)

• According to a Gallup poll, 18.2 percent of Americans state they did not have money to buy food at all times in 2010. (Gallup, Washington, D.C.)

• The median household wealth of white families has fallen by 16 percent since 2005; Hispanic families dropped by 66 percent. (Pew Research Center Social & Demographic Trends project. Washington, D.C.)

• Three-quarters of the increase in U.S. corporate profit margins over the last ten years have come from depressed wages. (J. P. Morgan, New York City) (Harper’s Index 323 (1937): 15, 68, October, 20ll).

• U.S. corporations pay only 10.5 percent of their profits in taxes today (vs. 40 percent in 1961, with some paying no taxes. (Institute for Policy Studies, Washington, D.C.)

• Based on a definition of the middle class of those between the 30th and 70th percentiles of the income distribution, one-third of Americans dropped out of the middle class over the last 30 years. (Acs, G. Downward Mobility from the Middle Class: Waking Up from the American Dream. Economic Mobility Project. Pew Charitable Trusts, September, 2011).

• The average annual premium for health insurance for a family of four reached $15,073 in 2011, 9 percent higher than 2010 (Abelson, R, Bernstein, N. Health insurers push premiums sharply higher. New York Times, September 28, 2011: A1) (an unaffordable level about 30 percent of the median family income, or twice the proportion of income that seniors paid for health care when Medicare was enacted in 1965!).

• In the most recent study of mortality amenable to health care in 16 high-income nations, the U.S. ‘led’ the field with the most preventable deaths, and with the least improvement over a ten-year period; the authors concluded this poor
showing is likely due to “the lack of universal coverage and the high costs of care.” (Nolte, E, McKee, M. Variations in amenable mortality—Trends in 16 high-income nations. The Commonwealth Fund, September 23, 2011)

• The consumer confidence level is now only 45 percent. (Vital signs. Wall Street Journal, September 28, 2011: A1) Despite all this pain and suffering, the political process continues to ignore this national catastrophe in the name of austerity as the debate continues over the budget deficit, targeting federal spending for education, health care and other important public programs (but avoiding bigger issues, such as major defense cutbacks, real financial reform, campaign finance reform, and tax increases for the wealthy). The extreme right-wing of the Republican Party, activated and hobbled by the Tea Party, continues to hold Congress and the Obama Administration hostage as it pursues its nihilistic agenda, focused on winning further power in 2012 despite its lack of a plan to address these kinds of problems.

The present situation in health care boils down to a human and moral crisis that seems beyond the reach or concern of our current political leaders, conflicted as they are by enormous amounts of corporate cash that perpetuates our present, increasingly cruel market-based system. In our next post, we will explore whether we still can draw on a long-standing self-image that we as Americans care about each other.

John Geyman, M.D.
Professor emeritus of Family Medicine, University of Washington School of Medicine and author of Hijacked! The Road to Single Payer in the Aftermath of Stolen Health Care Reform (Common Courage Press, 2010)

To purchase a book by John Geyman, visit copernicus-healthcare.org

But as I discussed in a lengthy article four years ago, this theory has been fully discredited over the years as a cost-containment tool in U.S. health care. (1) (Geyman, JP. Moral hazard and consumer-driven health care: A fundamentally flawed concept. Intl J Health Services 37 (2): 333-51, 2007) Instead of cutting health care spending, cost-sharing leads many patients to delay or forego necessary health care, resulting in later diagnosis of illness and higher costs down the road, together with decreased quality and outcomes of care.

Overall health care costs are not reduced. Cost-sharing just shifts more costs to patients and families at a time when these costs are already unbearable for many. Meanwhile, the real drivers of health care costs continue unimpeded— perverse incentives within the medical marketplace that encourage physicians, other providers, hospitals and other facilities to deliver more services, whether appropriate or necessary or not; lack of price controls; blatant profiteering by Big PhRMA, investor-owned hospitals and medical supply companies; introduction of new technologies with lax requirements to document their effectiveness; and excess bureaucracy of our 1,300 private insurers.

Although it is now clear that cost-sharing will not fix our cost problems, and will just make patients sicker and increase the numbers of preventable hospitalizations and deaths, the policy-making community continues to bark up this tree. In fact, all the present trends indicate that increased cost-sharing, promoted especially by the GOP and many willing Democrats, will be imposed across the board in both private and public programs.

These examples illustrate the extent of this continuing trend:
• High-deductible plans with increased co-payments for visits and drug prescriptions and greater restrictions on network providers.
• Efforts to increase cost-sharing in private Medicare plans, including Medigap and Medicare Advantage programs.
• The Obama Administration’s “surrender in advance” proposal to introduce new co-payments for home health services for new Medicare beneficiaries (4) (Office of Management and Budget. Living Within Our Means and Investing in the Future. The President’s Plan for Economic Growth and Deficit Reduction. September 2011).
• Draconian Medicaid cutting services and increasing cost-sharing (e.g. Arizonans below the federal poverty level must make co-payments to gain access to care, causing many to forego care, a practice recently rejected by a the 9th U.S. Circuit Court of Appeals. (5) (Reinhart, MK. Copays break law. The Arizona Republic, August 25, 2011) But conservatives and many Democrats conveniently ignore these inconvenient facts about cost-sharing as a failed mechanism to cut health care costs:
• Despite the widespread and increasing use of cost-sharing over many years, health care inflation remains completely out of control.
• Physicians push the buttons for health care services much more than patients.
• The enormous costs of the multi-payer financing system are wasteful and unsustainable, and could readily be controlled by shifting to a single-payer financing system. The hypocrisy of the right on this issue boggles the mind. Consider these contradictory policies and assertions on the right:
• Blind ideological support of “market competition” as the answer to our cost problems when that is the main part of the cost problem, since real competition does not exist in health care markets (e.g. more consolidation all the time, wide latitude to set prices, little transparency, etc).
• Intent to dismantle Medicare and convert it into a voucher-based welfare program while at the same time opposing cost controls of private Medicare programs and negotiated drug prices that are so effective in the VA.
• Forcing increasing cuts of an already underfunded Medicaid program while promoting for-profit privatized Medicaid programs that offer worse medical care (6) (McCue, MJ, Bailit, MH. Assessing the financial health of managed Medicaid managed care plans and the quality of patient care they provide. The Commonwealth Fund, June 15, 2011) and further gouge the most vulnerable among us.
• Opposition to reforms of Wall Street abuses, where moral hazard of high-risk and exploitive investment practices continue unchecked. (7) (Browning, ES. Fed faces old foe as hazard returns. Wall Street Journal, August 29,2011: C1)
• Failure to even consider a single-payer, not-for-profit Medicare for all program that would assure universal coverage for our whole population with increased choice, more efficiency, fewer disparities and improved quality of care, all at less cost than employers, patients and families are now paying.
• Calling for a more limited role of government until big banks and other privateinstitutions face bankruptcy, then begging for bailouts and minimal follow-up regulation.
• Calling the Obama Administration’s recent proposal for minimal tax rules for those making more than $1 million a year “class warfare” as if the GOP hasn’t been waging such a war for many years. (8) (Knowlton, B. Republican lawmakers equate Obama tax plan with ‘class warfare’. New York Times, September 19, 2011: A 19)

Adding up all these examples of GOP duplicity and hypocrisy (to which many Democrats unfortunately yield), we have to ask when logic, common sense, evidence and fairness will take center stage for health policy makers and legislators? The way things are going could well be called legislative malpractice.

These are some of the major ways by which Americans are hurt by the growing deficit of generalist physicians:

1. Can’t get a primary care physician.
It is getting harder and harder to find a generalist primary care physician still open to accepting new patients. In Massachusetts, for example, the passage of legislation in 2006 expanding insurance coverage for many people exposed a critical shortage of primary care physicians. (Fitzgerald, J. State medical group sees severe shortages in 10 specialties. Boston Herald, October 20, 2010) Patients on Medicare and Medicaid have particular problems finding a physician willing to take them on due to low reimbursement through those programs. Under the banner of fiscal austerity, many states are cutting Medicaid to the bone. In California, for example, where Medicaid (Medi-Cal) covers one in five Californians, Medi-Cal payment rates for physicians and other providers have been cut by 10 percent to just $11 a patient visit (Corcoran D. Doctors say Medi-Cal reimbursement is too low. San Francisco Chronicle, August 4, 2011) Even if one has a primary care physician today, the likelihood of a continued relationship in the future is becoming increasingly clouded due to physician retirements, mobility among physicians, and changes of providers in insurer networks that often force changes of physicians.

2. No access to breadth of primary care.
People without a primary care physician don’t get access to the breadth of primary care anywhere else in our “system”. Specialists are not trained or equipped to provide preventive services across the board, care for acute and chronic problems for patients of all ages, continuity of comprehensive care for all medical problems for years, with knowledge and understanding of their patients’ family and community setting. Emergency rooms and urgent care centers can focus only on the most acute problem at the time, with little follow-up, while so-called “retail clinics” for walk-in care are limited to non-emergency and low-acuity problems. As a result, many of the potential advantages of primary care are not available to a growing part of our population.

3. Higher costs and unaffordability of care.
Specialty care costs more than primary care—a lot more, for a number of reasons. For new medical problems, specialty physicians have to start “cold”, without context or knowledge of the patient, often ending up repeating tests and procedures that have been done previously, charging more than primary care physicians, and in the case of multiple medical problems, typically having to call upon other specialists for care. Since primary care physicians know their patients better, they order fewer tests than specialists, and help to protect their patients from inappropriate and unnecessary care. (Schoen, C, Osborn, R, Doty, M, Bishop, M, Peugh, J et al. Toward higher-performing health systems: adults’ health care experiences in seven countries. Health Affairs (Millwood) 26: w 717-34, 2007)

4. Foregone necessary medical care.
Foregone care is widespread and increasing. These markers document this growing trend:

• In the last year, one in three Americans skipped care, did not fill a prescription, or get other care because of cost. (Parashar, A. Compared to other countries, U.S. patients have more access to specialists, less to primary care. Kaiser Health News, November 18, 2010)
• One-third of uninsured adults have a chronic disease for which they
don’t get needed care. (Wilper, A, Woolhandler, S, Lasser, KE, McCormick, D, Bor, DH et al. A national study of chronic disease prevalence and access to care in uninsured U.S. adults. Ann Intern Med 1249 (3): 170-6, 2008)
• Two million cancer patients are now foregoing necessary care each year due to unaffordable costs. (Weaver, KE, Roland, JH, Bellizzi, KM, Ariz, NM. Foregoing medical care because of cost: Assessing disparities in healthcare access among cancer survivors living in the United States. Cancer online, June 14, 2010)
•. The number of annual patient visits to physicians has declined sharply since the onset of the Great Recession in 2008. (Johnson, A, Rockoff, JD, Mathews, AW. Americans cut back on visits to doctor. Wall Street Journal, July 29, 2010: A1)

5. Decreased coordination and integration of care.
Coordinated and integration is a huge problem, especially for patients with multiple medical problems, the norm for older patients. The electronic medical record does not substitute for close communication between specialists for such patients. According to the Joint Commission on Accreditation of Healthcare Organizations, 80 percent of serious medical errors are associated with lack of communication or teamwork among specialists in hospitals. (Health blog. Joint Commission-Hospital Collaboration targets hand-offs. Wall Street Journal, October 21, 2010)

6. Decreased quality of care with worse outcomes.
Compared to those without primary care, patients with primary care receive earlier diagnosis and treatment of illness and better outcomes of care (Ferrante, JE, Gonzales, E, Pal, N, Roetzheim, RG. Effects of physician supply on early detection of breast cancer. J Am Board Fam Pract 13: 408-14, 2000), including lower mortality rates (Baicker, K, Chandra, A Medicare spending, the physician workforce, and beneficiaries’ quality of care. Health Affairs (Millwood) 23: w 184-97, 2004)`

Unfortunately, the essential role of primary care in any health care system is not widely understood. In the next post we will consider some of the many misperceptions about it, and how they represent barriers to building a better health care system in this country.

Adapted in part from my recently released book Breaking Point: How the Primary Care Crisis Endangers the Lives of Americans. Copernicus Healthcare, 2011, soon to be available as an Ebook on Amazon.

John Geyman, M.D.
Professor emeritus of Family Medicine, University of Washington
Past President, Physicians for a National Health Program

In a previous paper I described the transformation of the “public option” from an enormous program that would insure 130 million people to a tiny program in the Democrats’ health “reform” legislation that will insure somewhere between zero and 10 million people. I predicted that the “options” in the Democrats’ bills would be unable to succeed in all or most markets in the country. I characterized the main barrier facing the Democrats’ shrunken “options” as a “chicken and egg” problem: A person or group trying to create a new insurance company can’t tell prospective customers what the premium will be until they have determined how much they will pay providers; but the person or group can’t know how much it will pay providers until it knows how many people it will insure.

In this comment I elaborate on this chicken-egg barrier by presenting an illustration of the barrier at work – the departure of the Prudential Insurance Company from the Minnesota managed care health insurance market in 1994. Although Prudential was (and still is) a huge Fortune 500 company, it was unable to survive Minnesota’s highly concentrated group health insurance market and was forced to withdraw. If a company as large and as experienced as Prudential could not crack the Minnesota market, why should we hold out any hope for the little “options” proposed by the Democrats?

A recap of the transformation of the “public option”

Jacob Hacker laid out his vision of what is now called “the public option” in papers published in 2001 and 2007.  Hacker spelled out five criteria he believed the “option” had to meet:

(1) It had to be pre-populated with tens of millions of people;

(2) Only “option” enrollees could get subsidies (people who chose to buy insurance from insurance companies could not get subsidies);

(3) The “option” and its subsidies had to be available to all non-elderly Americans (not just the uninsured and employees of small employers);

(4) The “option” had to be given authority to use Medicare’s provider reimbursement rates (which are typically 20 percent below the rates paid by insurance companies); and

(5) The insurance industry had to offer the same minimum level of benefits the “option” had to offer.

Although I question some of the assumptions Hacker made in these papers, including his assumption that the “option” will inevitably enjoy Medicare’s low overhead costs, I have little doubt that an “option” which met Hacker’s five criteria would stand an excellent chance of surviving its start-up phase in most markets in the U.S. (I am ignoring here the question of whether an “option” as strong as Hacker’s original has a better chance of being enacted than a single-payer system does. Events of the last few months should disabuse the entire world of that myth.)

But when the Democrats drafted legislation early in 2009 that included provisions creating an “option,” they abandoned the first four of Hacker’s criteria and kept only the last one (the one requiring insurance companies and the “option” to cover the same benefits). Proponents of the “option,” including Hacker, did not raise a fuss about this. Not surprisingly, the “option” provisions of the bills introduced in July – one by the Senate Health, Education, Labor and Pensions (HELP) Committee and the other by the chairs of the three House committees with jurisdiction over health care reform – were basically unchanged from those in the draft versions. The Congressional Budget Office estimates the HELP Committee’s “option” will insure approximately zero people and the “option” in the House bill (HR 3200) will insure roughly 10 million people.

The advent of managed care augmented the chicken-egg problem

Prior to the advent of what came to be called “managed care,” an entrepreneur or group seeking to start a new insurance company only needed to focus on amassing a large number of customers as opposed to providers (clinics and hospitals). But with the advent of managed care in the 1980s, groups seeking to start a brand new insurance company also had to amass a supply (or “network”) of clinics and hospitals as well. Some insurers amassed this critical supply of providers by buying them out (or merging with them), but most did so by signing contracts with them.

This new provider-network requirement for market entry arose because the spread of managed care tactics meant that survival and success would go to the insurance company with the greatest ability to exert influence over providers. Insurance companies throughout the country sought to increase their influence over providers by limiting patient choice of provider so that they could steer their enrollees to fewer providers. Developing this power to steer more patients to some providers and away from others gave an insurance company two substantial advantages over an insurance company that did not do that. First, it gave the insurer the ability to force the providers they dealt with to give them discounts off their usual charges. Second, it enhanced the power of the insurer to force providers to play by the insurer’s “managed care” rules (for example, rules requiring providers to get permission from the insurer before hospitalizing a patient).

But creating a network of providers that is large enough to satisfy a widely dispersed customer base but still exclusive enough to give the insurer leverage over the in-network providers is a time-consuming and expensive process. This requirement gives an enormous advantage to the home team – the insurers that have been doing business for a long time in a given market – and, conversely, creates an enormous barrier to entrepreneurs seeking to create new insurance companies.

When the U.S. Department of Justice investigated a proposed merger between Aetna and Prudential in 1999, it concluded that “effective new entry for an HMO or HMO/POS [point-of-service] plan [that is, an insurance company that limits patient choice of provider] in Houston or Dallas typically takes two to three years and costs approximately $50 million.” Because insurance markets have become more concentrated in the decade since the DOJ published this report, the time and money required to break into today’s markets is even greater than that required a decade ago.

Insurance companies which failed to grasp this new rule of the managed care era – that success will depend not only upon the size of your customer base but also your ability to limit patient choice of provider – lost market share and many went out of business. The decision by Prudential Insurance Company to leave the highly concentrated Minnesota health insurance market in 1994 illustrates this trend.

Prudential’s departure from Minnesota’s group market

As of 1994, Minnesota’s four largest health insurance companies insured 80 percent of all Minnesotans who had health insurance of any sort. Blue Cross Blue Shield of Minnesota enrolled 1.33 million people, Medica enrolled 900,000, HealthPartners enrolled 650,000, and PreferredOne enrolled 450,000. Two of these insurers – Medica and HealthParters — were so powerful in the Twin Cities area they could extract discounts from Twin Cities hospitals that were approximately equal to Medicare’s (at that time, a discount of about one-third). They extracted these discounts not because they were as big as Medicare was (nationally Medicare insured 40 times more people than Medica did in 1994 and about 55 times as many as HealthPartners), but because they were big in the Twin Cities insurance market and, unlike Medicare, they made a point of limiting patient choice of provider. This meant they could exercise enormous leverage over the providers they did choose to deal with.

Even though Prudential was and still is a huge company nationally (it is a Fortune 500 company and is among the nation’s largest health insurance companies) and had been selling health insurance for decades, it did not react fast enough to the gradual spread of managed care tactics in Minnesota during the 1970s and 1980s. (Minnesota, along with California, led the nation down the managed care path.) By 1994 Prudential decided it couldn’t compete in the Minnesota market.

Prudential made its decision known on July 8, 1994. As the following excerpt from a Minneapolis Star Tribune article published the next day indicates, Prudential had established a toehold – it was well on its way to creating both a customer base and a provider network – but the toehold wasn’t enough.

… Prudential Insurance Co. said Friday that it will discontinue its Twin Cities managed care health plan due to intense competitive pressures. Eighty metro-area jobs will be eliminated….While Prudential … is now in 42 cities, only the Twin Cities market posed a particular problem and will be shut down….

Prudential Plus of Minnesota operates mainly in the Twin Cities and deals with 800 primary care physicians and 1,500 specialists. Nationwide, the managed care plan has 5 million members. Regardless, Prudential did not grow large enough or fast enough in the Twin Cities market to maintain a substantial lead, analysts said. The firm was easily overshadowed by heavyweights such as HealthPartners and Medica…. And these bruisers and others like them are merging or forming alliances that kept welterweights like Prudential Plus on the ropes. Gary Schultz, executive director of Prudential Plus of Minnesota, said, “Recent mergers, acquisitions and strategic alliances involving health care plans and providers … have combined to make it increasingly difficult to compete in this market place….

“Prudential only has 30,000 (members) in the Prudential Plus plan,” [Prudential marketing director Pat] McLaughlin said. “They are not the big player they needed to be and as a result may not have been able to negotiate the best deals with providers” (Dee DePass, “Prudential to discontinue managed care health plan,” Star Tribune, July 9, 1994, 1D).

An article in BNET reported an identical explanation for Prudential’s demise in Minnesota: “A Prudential spokesperson said the clout of its bigger competitors had made it difficult to recruit a critical mass of new employers and enrollees.”

Lessons for “option” advocates

This story illustrates three facts “option” advocates must address.

First, it clearly illustrates the “chicken and egg” problem facing the “option” program, or to be more precise, facing the corporations that will be hired by the Secretary of the Department of Health and Human Services to create the “option” program. (Both the HELP bill and HR 3200 authorize the Secretary to contract with corporations that the HELP bill calls “contracting administrators” for the purpose of creating the “options” throughout the U.S.) The contracting administrators are going to have to build up provider networks and a customer base from scratch, simultaneously, and market by market, even though they will suffer the disadvantage of entering the insurance business long after the insurance companies they are competing with began introducing themselves to customers and cobbling together their own provider networks.

Second, this story should put the entire country on notice that the “option” may never be able to deliver on the promise, made over and over by “option” advocates, that the “option” will offer complete freedom to choose one’s doctor and hospital. If the contracting administrators who create the “options” around the country refuse to create “options” that limit enrollees’ choice of provider, those “option” programs will have less power to drive provider rates down. That means, of course, those “option” programs will have to set their premiums higher than existing insurers that do limit patient choice of provider. That will in turn make attracting a critical customer base very difficult if not impossible.

The third fact the Prudential story illustrates is that the size of an insurer at the national level is not an important factor in decisions by clinics and hospitals about whether to sign contracts with an insurer and whether to give that insurer discounts. What matters to clinics and hospitals is size at the local level. Minneapolis hospitals, for example, could have cared less whether Prudential insured 20,000 people in Tulsa or half-a million in Florida. (Size at the national level does have some bearing on whether an insurer can extract discounts from drug and equipment manufacturers. But drugs and equipment amount to roughly 15 percent of medical costs for the non-elderly. It is clinic and hospital costs that make or break an insurance company.)

The “chicken and egg” problem is, of course, not limited to entrepreneurs trying to break into the Minnesota market. The conditions that create the “chicken and egg” problem – high concentration levels within the insurance industry and near-universal use of managed care tactics including limited choice of provider – exist throughout the country. As Senator Charles Schumer (D-NY) said in a press release about a May 2009 report from Health Care for America Now, the entire U.S. health insurance industry suffers from “extreme … consolidation.” According to the HCAN report, eleven states have more concentrated insurance markets than Minnesota does.

“Option” advocates should stop comparing the “option” to Medicare

To test your understanding of the “chicken and egg” problem, let me end with a pop quiz:  Did Medicare face a “chicken and egg” problem when it started up?

The answer is:  No, it did not.  It did not because it didn’t have to create a “customer” base from scratch. Its base was created by the law (signed on July 30, 1965) that created Medicare.

Medicare is, by design, the sole insurer for people over age 64. That means that Medicare’s administrators had a precise idea of how many Americans they would be representing on July 1, 1966, the day Medicare commenced operations. Equally importantly, every clinic and hospital in America had a good idea of how many elderly patients they would be getting if they participated in Medicare and, conversely, how many they would lose (and how much money they would lose) if they refused to accept Medicare patients. And because the Medicare law gave the nation’s entire elderly population – the portion of the population with the greatest need for medical care – to Medicare, Medicare’s administrators had a good idea of how much leverage they had on day one over the nation’s providers. This allowed them (eventually) to make an offer to America’s providers that the providers could not refuse – accept Medicare’s below-average rates or lose a lot of money. The offer was not refused. Today, virtually all American clinics and hospitals accept Medicare enrollees even though there is no requirement in the Medicare statute that providers accept Medicare enrollees. In short, having pre-established enrollment, which in turn gave Medicare the ability to set its rates below those of the insurance industry, meant that Medicare did not face the “chicken and egg” problem.

More importantly, Medicare didn’t face a “chicken and egg” problem because it has always been the single insurer for the services covered under Medicare. Medicare has never had to compete with the insurance industry for “customers.”  A pernicious consequence of the tendency of “option” advocates to describe the “option” as “just like Medicare” is that “public option” supporters and members of Congress have been lulled into thinking the “option” is bound to succeed just as Medicare did. The tendency of “option” advocates to ignore the daunting “chicken and egg” problem is one manifestation of the lazy thinking that has been induced by the constant comparison of the “option” to Medicare.  ”Option” advocates should stop comparing the “option” to Medicare.

Kip Sullivan is a member of the steering committee of the Minnesota chapter of Physicians for a National Health Program.  He is the author of The Health Care Mess: How We Got Into It and How We’ll Get Out of It (AuthorHouse, 2006).