Private thoughts on a public option

A previous posting on competition garnered lots of interest and a question about the logic of a government sponsored health plan in the US, the so called "public option." The specifics of this particular pudding are still baking in the unreliable oven of Washington politics, but some general assessments can be made about a potential role of government:

1. The central problem with paying for healthcare over a person's lifetime is that the same entity collecting premiums when you are a healthy 20 year-old needs to be the one paying for your care when you're an unhealthy 70 year-old. In the US, health insurance is coupled with employment, guaranteeing that no insurer will cover you for long. So the company collecting premiums when you are a healthy youngster will not be the same company paying for your care when you are old and sick. This means unpredictable risk for private insurers, who respond in various creative ways that are not good for patients. Governments seem much better suited to managing this type of life-long coverage.

2. Rhetoric aside, Americans seem generally comfortable with current public options: Few suggest eliminating Medicare, Medicaid, and Veteran's Care. They realize that government doesn't provide care, so "government run healthcare" means government is guaranteeing your ability to pay your doctor to see you. And American's overwhelmingly support government-run essential services such as fire departments, police, libraries and road maintenance.

3. Government plans allow a couple of things that private plans don't: Data gathering and transparency, and the ability to force quality improvement. It's not a fluke that so much research in the US focuses on the Medicare population: The government gathers data on them, which is available to researchers at no or low cost. This is the type of research that is fueling and informing the current round of health reform. It's also no accident that the only national, publically accessible database reporting on hospital quality is run by the government. A government plan can also hold providers accountable to better outcomes in ways that private payers rarely have.

4. While most countries provide universal access to healthcare using a single government payer, those that provide access with a private focus use government as a super-regulator to ensure that the private marketplace stays focused on health and not profit. The political viability of having government play a more vigorous regulatory role is not clear.

5. If private competition is going to dominate, there needs to be reliable, universal and publically accessible outcomes reporting, so that consumers of healthcare have the ability to choose services based on quality. That could be where government is involved: Being the neutral party that gathers and reports trusted data. (I'll discuss the topic of hospital quality reporting in an upcoming posting.) Currently, consumers can learn more about the quality of their car, toaster, or a pair of shoes than they can about their heart surgeon or hospital.