(This is a revised version of a diary I submitted yesterday under the title Making the Senate Compromise on the Public Option a Real Viable Alternative. I am resubmitting with a slight revision, and a new,shorter title, in hopes of attracting greater attention and response. I apologize for the lack of timeliness in writing/submitting this diary. I devoted a lot of time researching this topic since the compromise was introduced, and the combination of my work schedule and the Christmas/Kwanzaa/New Year's holidays prevented me from really sitting down and thinking about this.)
Like many of you, I was angry and heartsick when the Senate ultimately dropped the public option and the Medicare buy-in (thank you Joe Lieberman and Ben Nelson). But when I read about the other part of the compromise over the public option, the creation of at least two privately run, non-profit health insurance plans (now split 50-50 between for-profit and non-profit plans), I admit to being very intrigued and excited about the idea.
I believed then, as now, that it could satisfy the demands of us liberals/progressives, who wanted some kind of non-profit entity to provide competition to private insurers, as well as conservatives, who want people to be able buy health insurance across state lines.
This idea appeared to have been spun out of whole cloth when it was first introduced, apparently to placate progressives' demand for the public option. But on his blog back in the fall, the invaluable Ezra Klein highlighted this little noticed provision from Max Baucus' health care plan, which calls for
"The National Association of Insurance Commissioners (NAIC), in consultation with consumer groups, business interests, including small businesses, the insurance industry, federal regulators, and benefit experts" to create a uniform set of benefit standards that insurers would have to meet to offer a national plan. Once met, that plan could be offered in every state, as it would preempt state regulations. Presumably, that plan would also have more bargaining power and substantial efficiencies of scale, as it will be national, rather than confined to a single state.
But (as we all know) the CBO eventually threw cold water on the whole thing with their scoring of the idea. And some observers and experts poo-pooed the idea of the Office of Personnel Management to oversee the national plans, because it is not large enough to handle the task.
Unfortunately, I can't provide a rebuttal to the CBO scoring report (perhaps they didn't have enough information on how the nat'l plans would be created, e.g. Baucus' provision.) But I truly believe this compromise could work, and in a comprehensive fashion...
As I noted above, several health care experts don't believe the OPM has the either the resources or proper mandate to oversee any national plan(s). But there's a solution that's right under our noses: instead of OPM, give that function to the Department of Health and Human Services' Health Resources and Services Adminstration. In its Strategic Plan, the HRSA lists eight major goals aimed at "increasing access to health care for those who are medically underserved." This expands HRSA's first overall goal, which is to improve access to health care.
Under this first overall goal are four major objectives, the last one the most important:
Objective 1.4: Promote access to health insurance and maximize use of available reimbursements for health care services
I believe overseeing the national plans could be included along with the three major initiatives already listed under this objective. And the OPM could join with 10 other independent federal agencies in providing operational support to the HRSA in its mission (i.e. giving advice in the oversight and negotiation with the plan). (See pages T19-20 of the Strategic Plan.)
And here's how this could work in a comprehensive fashion: supporting HRSA's Community Health Center program, as part of an overall initiative in supporting non-profit health care providers. Many states have mandated that health insurance companies operating in their localities provide "community benefits," which is defined here as:
Community benefits are the unreimbursed goods and services, provided by local health care institutions, that address community-identified health needs and concerns. In simpler terms, they are the things that a hospital or health insurer does that improve the health of the community, but for which the institution does not get paid. Some common examples of community benefits include free or "charity" care at hospitals, premium subsidies by insurers or HMOs, health education campaigns, health screenings, free flu shots, and so on.
So under the concept of community benefits, the privately-run, federally-overseen national plan(s) should be mandated to turn over a certain percentage of profits/excess capital to a fund that will support the CHC's and other non-profit health care providers and delivery systems, especially Federally Qualified Health Center Look-Alikes. This mandate would especially fit hand-in-glove with the mission of the non-profit health insurance plan; in a 1997 essay, David Lawrence, who was then chairman and CEO of the Kaiser Foundation Health Plan (unfortunately, I can't provide a link), spelled out three ethical challenges any health care organization must face: the Hippocratic Oath, Distribution of Services (which is "to fairly and appropriately manage decisions about the distribution of services"), and (naturally) "to contribute broadly to the public health." He argued that a non-profit organization could deal with these ethical challenges more effectively because
"...unlike a for-profit, the nonprofit is not obligated to balance fiduciary responsibility to shareholders with responsibility to patients. It is able to take a longer-term perspective on resource allocation issues. And it is able to address the needs and concerns of its providers more effectively. To the extent that nonprofits demonstrate and communicate these strengths, they have the potential to establish a higher degree of trust with consumers and providers."(Emphasis mine.)