The “Public Option” and the Health of Our Nation

Written by Rebecca Zietlow on June 25th, 2009

As the health care reform debate shifts into high gear, we need to make sure that the reformers have the right priorities.  The fundamental issue before us is what is the purpose of our health care system – the health of the American people or the health of the private insurance companies?  Frankly, these two priorities are increasingly at odds with each other.  As Atul Gawande’s celebrated New Yorker piece reminds us, patients are best served, at the lowest cost, in locations where the medical culture is focused on the health of the patient instead of making a profit.  Because private insurance companies are for profit entities, they are institutionally poorly suited to best serve the needs of the patients.  This does not mean that all private health insurance companies are bad, of course, but it does explain why they are fighting the “public option” tooth and nail in this health care reform debate.  Their argument against the public option is that it is unfair to make private insurance companies compete with government provided health care.  Why?   Because the government can provide services at a lower cost so the competition would be unfair.  Are you kidding me?  All this argument proves is that the public option might hurt the private health insurance industry.

Currently the profits of private insurance companies account for 30% of the cost of our health care.  It’s time to face the fundamental question – how much does preserving the outrageous profits of the private health insurance companies matter?  Is it worth sacrificing access to health care at an affordable cost?  That’s really what’s at stake in the “public option” debate, and the answer to the question is obvious.  Interestingly, polls show that almost 80% of the American public supports a public option.  While Americans may distrust the government, they apparently distrust health insurance companies even more.  For the health of the nation, we need the public option.

1 Comment

Comment by Lawrence Goldstone
2009-06-26 13:01:16

The great fallacy perpetuated by those on Wall Street and at CNBC is that, by limiting profits, potential competitors will be driven out of an industry; as a result, prices will increase and quality will decrease. (A corollary is the argument against limiting executive pay.) As a former Wall Street executive, I can tell you that this is utter nonsense–mere propaganda. What we have seen is that by ensuring profits, we have drawn the rapacious and the incompetent into finance, which, of course, includes the business of health care. Profit potential in the health industry–as in any other area of business–will exist regardless of whether or not government regulation or restriction is present. Vast profit potential. By requiring that participating firms be leaner, smarter, and more creative, we will only create a better product.

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