GOP Representatives oppose public option because it's "cheaper", "saves money"

[Badger]

http://minnesotaindependent.com/39874/bachmann-kline-oppose-public-option-because-its-cheaper

Michelle "Crazy Bitch" Bachmann:

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John Kline:

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Once again, if you missed it, in crazy Republican world, cheaper services that save money are bad things that must be defeated.

The point is the concern that the public option will be subsidized (as it surely will be, if not right now, in due course), and obviously non-subsidized alternatives have an anchor holding them down, and are sailing into a stiff wind head on. The concern is that this is a Trojan Horse, leading to solely over time for most folks with just a government provider.  I see no reason why we just can't have means tested premium subsidies, with some rules about minimum coverages. I don't see the need for a public option, and the push for it, suggests to me well the ulterior motives outlined above.

But that's the point, Torie. Even the conservatives complaining about this concede a public option health care plan will provide cheaper health insurance more efficiently without subsidies. The major reasons are simple economies of scale and there is no massive chunk of premiums going to pay off shareholders demanding their lucrative returns or sky high executive compensation packages that utterly and shamelessly dwarf what even upper level talented civil service workers make. It's just plain bad in their eyes because this cheaper more efficient service is provided by the government, which is always in allways (nonmilitary) bad and an inefficient clusterfric--er, except here of course.

[Badger]

Badger, competition in theory forces cost control, or you go out of business. We need more competition, and more transparency to facilitate it. I don't see why there are economies of scale when it comes to insurance plans so massive that it requires 200 million participants to reach max efficiency. And why does anyone think what the government runs would be efficient anyway, particularly given the political pressures, not to mention well, public employee unions?  No, what this is about is muscling out over time private alternatives, and squeezing vendors with monopsony buying power, so it will not be profitable for anymore hospitals to be built absent government subsidies, or private company drug research, as the existing capital base of those entities is cannibalized. And then 20 years from now, folks scream, hey the market does not work because no hospitals are being built, we cannot attract new doctors to the profession, and no drug research is being done anymore, and thus the government needs to run all that too, all of course with public funds.

There is no free lunch, and the notion that the government can effect massive cost savings to deliver health care is ludicrous, just ludicrous. Having said that, the health care system is in general hideously inefficient, in part due to government regulation and lack of transparency. Heck, next to nothing when it comes to medical records is computerized, leading to mistakes and ignorance. That is why I have all my medical records in hand, all of them, so I can tell medical providers basically what is wrong with me, and what I expect, and what my delta function has been. If I did not do that, my care would be less efficacious then it is.

Anyway, government has a cost of capital too, and what profits are about, is compensating capital. And that cost includes risk, which is hidden from government, because that risk is absorbed when things go wrong, with well higher costs and taxes and deficits, and inflation, and you name it. It is far higher than the interest rate on T bills and bonds.

So much to refute, so little time....

First off, slow down. More competition and greater transparency is exactly what a public option entails. Again, no conservatives are arguing a public option will be unfair because of any federal subsidies---because there won't be any. They're conceding that the public option will be more cost effective and efficient at delivering health care than private sector insurers can without subsidies. Their position is providing health insurance options to the tens of millions of insured and underinsured is less important than protecting insurance companies from this additional competition. Why? It's the government and that's bad, and private insurers are businesses and that's good. The providing millions with health insurance cheaper and more efficiently is unimportant compared to a violation of their rabid anti-government orthodoxy. A completely indefensibly argument, really. It's these same 'protectionist' conservatives who simultaneously--and apparently with no realization of their contradiction--still claim 'government can't do anything right'. Except provide health insurance apparently.

Which leads to my second point; all the calamities like hospitals closing you predict don't begin to add up. How does broader health insurance result in less demand for medical services? Check out this thread:
https://uselectionatlas.org/FORUM/index.php?topic=99395.0
Listen to the many folks who actually have some level of national health insurance none of whom (with one exception from Portugal, and that's practically third world and doesn't count) :-P would trade our system for theirs. Somehow hospitals still function and thrive.

Consider the post office. Despite the government "muscling out competition" with cheap efficient service, UPS and Fed Ex still do just fine. Competition for the market--isn't it great?

No, health care reform will not be a free lunch. Of course there will be costs. The question is whether or not a public option is better than the expensive patchwork system we currently have that even conservatives concede insures fewer people at higher cost, and is not effectively controlling the rising costs of medicaid and medicare either. The clear answer here, unless one is a diehard anti-government ideologue, is "bring on the public option".

And isn't that the whole point here? If it's shown on a broad basis that government can provide a national benefit relatively cheaply and efficiently, doesn't that undermine the central conservative Republican philosophy that government can't do anything right (except fight wars)? Wouldn't the success of public health insurance show <gasp> St. Reagan was wrong and, more importantly, undercut the very argument for voting Republican to tens of millions? You bet your ass.

Conservatives aren't scared Obama's health care plan will fail as they publicly assert; they're scared to death it'll succeed. Because while that'd be great for the country, it'd be a disaster for the GOP.

[Badger]

Well sure Badger, if a public system were more efficient, and was not over time cannibalizing existing assets in the sense that it was not taking the economic incentives out of private drug company research, construction of new health care facilities, and folks of talent going into the health care industry over time down the road, then yes, that is great.  But that is your assumption, and you have offered no concrete evidence of which I am aware that an effective government monopoly running all of this would be more efficient than a private system with means tested subsidies. There is this assumption that somehow profits equals economic waste, which no economist of whom I am aware would agree. What does the government run efficiently vis a vis private industry that is relatively complex?  What the government is efficient at is redistributing cash, which is why social security is efficiently run - it is mostly about negotiating and issuing checks.

I feel you Torie, but:

1) What does the research, construction of new hospitals, drawing talented new folks into health care have to do with the private health insurance industry (or more specifically, not giving private insurers competition from a public option) have to do with any of this? As I pointed out in another thread, it's not like any executives at Aetna invented any of the technology being used at the Mayo Clinic.

2) You and I have a different idea of what constitutes a "government monopoly". Consider my earlier comparison of the post office vs. UPS & Fed Ex. Besides, Obama's health care plan does not involve a government monopoly, but rather a public option for health insurance. Big difference.

3) I, like 99% of liberals, never said that profits = waste. That's not the issue. What I believe is:
Profits of health insurance industry < (x100) providing cheaper more efficient option for health insurance to those needing it.

[Badger]

Suppose C is at Harvard Law School, and is destined to make millions?  Should the taxpayers subsidize this soon to be "rich," for 40 years because the guy was too arrogant or feckless to get health insurance for relative pennies? 

I guess that is the best I can do. Extreme cases sometimes make for bad policy. Still if one can afford it, and made a financial mistake, I just don't see why the taxpayers should bail that person out. In any event, where do you draw the line between the feckless 25 year old, and the 58 year old Torie? When does one who can afford it become totally financially responsible for one's financial decisions, who has the dough to pay for the mistake?

To the extent public health care is supported by progressive taxation with the Harvard Law grad in this scenario gets out of school he'll be earning big bucks, and paying a portion of those big bucks back in income taxes which in his case will not only pay back the cost of his insurance in spades but also cover the cost of others less well off who use the system as well. The long term economic benefits of keeping this guy alive and healthy to become a productive memeber of society are enormous and obvious.