Health Care: The Public Option

September 20th, 2009 by Lee Eldridge

The point of this post is not to directly debate the merits of the public option. But to understand better what the public option means for us. Many on the left would prefer a single payer, government run health care system. President Obama is on record for wanting a single payer system (before he ran for president). But the majority of Americans do not want a single payer, government run health care system. We don’t trust the government to run it well or efficiently. We’ve seen the huge amounts of money wasted in Medicare and Medicaid. We’ve seen the poor health care our veterans receive in VA hospitals. My opinion, and my fear, is that the “public option” in the current legislation is really a single payer system in waiting.

Competition
Politicians who support the public option say that it provides competition to the insurance companies, which they say is good for America. (However, they currently restrict how insurance companies compete with each other, but that can be discussed in another post.) Let’s take this out of the health care setting for a moment and provide an easy to follow analogy. Let’s say that in your hometown there are three stores that sell TVs. And the average price of a TV is $300.

TVWell for a store to make money and survive, they have to buy the TVs for less than they sell them for. So they buy a TV for $200, and sell it for $300. With three stores in your town, there is competition, which keeps prices competitive and keeps the store owners from charging $400 for a television. But even at $300, not everybody can afford a television.

The government decides that it is important for every American to own a TV. And they want to offer Americans a more affordable option. So the government opens a store in your hometown and sells the same TV for $200. They say this will increase competition, and allow all Americans to afford a television. And it will force the privately owned stores to lower their prices.

So what happens to the privately owned stores? How can they afford to compete with the government who does not need to make money on the TVs they sell? They may look for new ways to remain profitable and remain in business, but eventually most of them will stop selling TVs. Choices will become limited. And eventually, the only choice will be the government store.

But what happens next? Well the government realizes that it can’t sustain selling the TVs for $200 because there are other expenses involved in selling TVs. Not just the cost of the television. They go the manufacturer and say “We need to be able to buy that TV from you for $100 so we can sell it for $200 to cover more of our expenses.” The manufacturer has two options: sell TVs to the government store for less money, or stop selling TVs. Their only “customer” is now the government store. If they sell the TV for less money, do you really think they’ll continue to make the same quality of television? Not a chance. They can’t. They will begin using less expensive, and inferior components.

The United States Postal Service
I’ve seen many who criticize government run health care make comparisons to the United States Postal Service. But they’re making the wrong analogy. Yes, the post office loses money, which means that it is partially supported by tax dollars. But it doesn’t lose money necessarily because the government is incapable of running the USPS efficiently. It loses money because that’s what the government WANTS it to do. For the USPS to be self-sufficient, it would require raising prices, and limiting service. Two things the government does not want to do. The government would prefer to subsidize the post office through our tax dollars than they would to make the system profitable. Or even self-sustaining. Since they’re not willing to make the decisions required to make the post office profitable, there is no incentive to make it efficient either.

Back to Health Care
So here are my biggest concerns with the public option:

1. It will eliminate competition (the insurance companies).

2. It will decrease the quality of care as they force doctors and hospitals to accept less money for services rendered.

3. It will have to further limit the availability of care.

4. The government will have no intention of making the system self-sustaining, which means it will likely cost the tax payers a lot of money. And like Medicare and Medicaid, it will waste billions and billions of tax payer dollars.

We need health care reform in this country. And we need it badly. But it does not need to contain a public option to fix our problems.

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8 Responses to “Health Care: The Public Option”

  1. Steven Guiot Says:

    Lee, your easy to follow analogy is too easy. Plus you ask us to make worse-case leaps-of-faith several times to get to your conclusion. Anyway, just seems very cold-hearted to be comparing health insurance to T.V.’s. I know you just did it for the analogy sake, but how people accept the health and well-being of a living human being as a commodity to be profited from is beyond me. As disturbing as it is to me that a comparison like that can even be made… I wish it was disturbing to more people.

  2. Lee Eldridge Says:

    Thanks Steve. It certainly wasn’t intended to be cold. The administration has repeatedly said that the bills in Congress do not create a single payer, government run system. Technically they are correct. It does not create it directly. My concern is that the long-term consequences of the bill WILL create a single payer system. And even of greater concern to me is that this is their intent.

    There are many ways for us to take care of those who need assistance without directly or indirectly creating government run health care.

  3. Steven Guiot Says:

    The only way I’m seeing it is to price cap what insurance charges, make it illegal to deny coverage for pre-existing conditions, put limits on out-of-pocket expenses for patients… in other words, regulate it so much that it is essentially government run healthcare. What the Repubs and Insurance companies seem to want is mandatory coverage for everyone with very weak, little, or no new regulations on health insurance companies. The left won’t settle for less than a public option. Obama’s playing the middle and is likely to get squat. We’re all going to end up with the same old problem, which I’m sure is also just fine with the insurance companies.

  4. Lee Eldridge Says:

    I’m good with smart regulations and proper oversight. (I’ve got another analogy I’ll share at some point about my views on regulations.) But I would disagree that improved regulations would basically equal a government run system, therefore you might as well have the public option. There are tons of industries with very strict codes and regulations, yet these industries are not government run.

    And why will the left settle for nothing less than the public option? Because the left WANTS a single payer, government run system. And this bill indirectly achieves that.

  5. Jeff Says:

    I liked the TV analogy :)

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  7. Just Plano Bob Says:

    isn’t it a comfort to know that the O GREAT speaker of the house does not care what you oppose? Her day is coming……..

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