Can’t Tackle Health Care Costs Without Tackling The Interests of Health Care Providers

Washington doesn’t want to hear about it at this point, but the fact of the matter is that having passed a big health care overhaul at the beginning of this year we need to keep on reforming our health care system. Simply put, health care costs are still rising way too fast. An in an interview with my colleague Igor Volsky, former Senator Tom Daschle helps shed light on what the problem is.

The headline out of Igor’s piece is that Daschle says, contrary to the White House, that the public option was de facto taken off the table relatively early in the process. This is what I think many people have long suspected, and it will rightly be the subject of continuing inquiry. But also important, I think, is who the deal was struck with — not just insurance companies, but also “the hospital association” and other “stakeholders.”

This is what tends to go missing when people talk about the politics of the public option. Opposition to it, or to similar proposals like Medicare buy-in, isn’t limited to the easily excoriated insurance industry. It extends pretty broadly across the community of health care providers who fear that one of the main ways a public option would control costs would be by aping Medicare to use its market size to drive a hard bargain and cut fees. On the merits, that’s a feature rather than a bug. But it does mean that if we ever want to see a public option, we need to be prepared for a tougher public fight than a simplistic read of poll numbers would indicate. You’d be looking at a protracted public battle with the “stakeholders” — i.e., the highly trusted health care providers — which would be difficult.

That doesn’t mean it’s not worth doing. Essentially any effort to control costs, either the “liberal” ones or the “conservative” ones suffers from this same problem. A huge quantity of our excessive health costs are going into the pockets of hospital administrators, doctors, medical device makers, etc. and any workable method of controlling costs is going to attract opposition from those quarters.