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Only A Public Option Can Make Decisions in Patient's Best Interest

Only a public sector plan has the political and moral standing to set limits on coverage and control costs.

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Very likely, in many cases, the public sector plan would not refuse to cover a product or proceduret(unless it was clearly harmful) , but it would be likely to hike-co-pays and lower fees for less effective treatments as the Congressional Budget Office has suggested. Over time, if patient outcomes improved, both patients and doctors would become more comfortable with the idea of following the Board’s guidelines.

Couldn’t a Federal Health Board layout regulations for private insurers, telling them what they can and cannot cover? A Board could lay out minimal standards for what must be covered in an insurance package. But micro-managing  private coverage, often on a case by case, drug by drug, procedure by procedure basis, would turn into a bureaucratic nightmare.  Think of the how much time hospitals and doctors now spend negotiating approvals with private insurers.

By contrast, Medicare has managed to make it clear what it will and won’t cover without endless wrangling. A public-sector insurance plan should be able to do the same.

This is why it does make a difference whether or not we have a public sector insurer. Privately, some for-profit insures have told MedPac that they never again want to be on the front lines of “managing care.”  But if Medicare—and a public-sector option—would provide cover, they would happily follow whatever precedents it set. If a public sector plan refused to cover Vioxx, deeming the risks too great for patients, , they would refuse payment for Vioxx. If the public-sector plan refused to cover bone-marrow transplants for breast cancer patients, knowing that there was no evidence the procedure saved lives—or even extended lives by one day—private insurers would follow suit. But this would be voluntary; the government would not be making case-by-case decisions for insurers, telling them what they couldn’t cover. 

At the same time, if private-sector insurers wanted to compete with the public-sector option on both price and quality, they would have to focus on making wiser coverage decisions that would lead to better outcomes. This means paying attention to comparative effectiveness research and covering what patients really need rather than what drug-companies tell them that they should have. Public sector insurers could serve as a model for private-sector insurers that want to life quality while reining in costs.

In the end, only government has the standing—and the responsibility—to appoint unbiased medical experts to set the standards that will best serve the public good.  Corporate America was never elected to do that.

Maggie Mahar is a fellow at the Century Foundation and the author of Money-Driven Medicine: The Real Reason Health Care Costs So Much (Harper/Collins 2006).

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