Thursday, September 10, 2009

Thursday Thoughts

I. Doug and I have just had a short analysis article published in the Presbyterian Outlook. The topic is the review that the Presbyterian Church (USA) is undertaking regarding its Washington lobbying office.

II. I was very interested that President Obama switched away from using the Post Office as his analogy for a government health insurance program to using thepublic/private mix in higher education. Recall that I wrote about that analogy here is Wise As Serpents in "The Post Office Always Rings Twice" back in August. It is an important example (and I think one of the few examples) in which we see a significant, stable mixture of government and non-government providers (it's actually an interesting mix among governments, non-profits, and even some for-profit providers). I raised the analogy to see if we could consider why higher education was so different than first class mail (the Postal Service is protected as a monopoly), Amtrak, and Fannie Mae/Freddie Mac. I came up with three hypotheses, none of which applies, as far as I can tell, to the President's plan for health insurance (even reading texts from his specch I still don't really know what his plan is). As a quick review, the three attributes that I hypothesized were important were:

1 ) The government universities are forced to compete with one another. This certainly wouldn't be the case with a national government health insurance system, and the Administration's proposals to weaken Medicare Advantage means that they are probably going in the opposite direction. It's not clear whether any of the ideas of regional public health exchanges would include government/government competition.

2 ) State governments make only minimal attempts to control the operation of private universities. This is clearly at odds with the various Democratic proposals.

3 ) We have a social norm that accepts heterogenous outcomes in higher education. I question whether we would have that same social norm with regards to health insurance. Attempts to mandate this or that in private plans, again, go in the opposite direction.

So what would a "public option" look like that resembled higher education? Perhaps:

a) regional exchanges that could compete across state line, particularly for the purpose of addressing the adverse selection problems of high-risk individuals;

b ) freeing private providers from government imposed mandates as to what constitutes an acceptable policy, and allowing consumers more choice between limited and complete plans;

c ) accepting a social norm of hetergenous outcomes beyond some core of "major medical" insurance.

In thinking about this post, I drifted towards the following thought experiment. Would we ever arrive at a system that, once it was in place, we as a society would accept that individuals had enough options that it would not be the federal government's responsibility to step in if someone, after the fact, regretted that they didn't choose some particular features in their health care plan? For example, suppose I chose a plan that excluded payment for organ transplants after I reached the age of 80. What would happen if, when I am 84, a doctor told me that I could extend my life by an expected X years by having a liver transplant? Would I be able to "recontract" by claiming, through the legal or political process, that it was unjust for my insurance company to refuse to pay?

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