Breaking up the monopolies and cartels in health care insurance, and in health care itself, is the only health care reform we need. Further, no such reform, except Single Payer, which gets around the problem by just getting rid of the whole cartel-ridden private health insurance industry, will work unless we break up the cartels first.
The problem we face in health care financing right now is that the private insurers have pushed themselves into a death spiral of excessive premiums pushing their healthy, low-claims, beneficiaries into taking the risk of going naked. Every time they raise premiums, that just makes the problem worse, as it just forces the next healthiest tranch of beneficiaries over the line at which it stops making sense to keep paying premiums.
They got to this price point, with premiums needing to cover costs 3, 4, 5 times what they are in the other industrialised countries with standards of care no lower than our own, because of monopoly and cartel pricing, both within their industry, and among the big providers, Big Pharma and the hospital chains, whose claims are their main expense. While there are national differences in patient preference and physician practice, they are clearly not nearly large enough to explain such a large differential in prices. Blaming the price differences on some sort of moral hazard is even more ludicrous, because the human cost to the patient of expensive interventions tracks their prices very closely. The patients, the customers, have an extraordinarily strong motivation to hold down the level of medical expenditure devoted to their care to the absolute minimum required for their health, because they pay for the interventions practiced on their persons in blood, sweat and tears. That their abiding interest in attaining the most parsimoniously cost-effective, human cost-effective and therefore monetary cost-effective, care, is systematically frustrated, and by a factor of 3-5, can really be explained by nothing else except the systematic restraint of free trade in the medical marketplace by the cartels which dominate it.
Sure, we could solve this problem by just junking the whole industry, and replacing what it does with a Single Payer. We would still need to bust the provider trusts to make this work at really bringing costs down, but at that point, the gains to the public purse would be so obvious, that such trust-busting would happen, the gummint would actually find the cojones to do it.
But if we don't just kill the health insurance industry outright, no reform short of this Single Payer will work unless we first bust the trusts. Monopoly and cartel power will enable the industry to manipulate the markets so as to sideline the public option, or these exchanges. Both ideas rely on using free market forces to jawbone the private insurers into good behavior, but leaving them with their cartels will leave them with a bigger jawbone. It also leaves the voters still under their insurance as so many hostages against the gummint getting tough on actually enforcing any of the fine and noble reforms that the progressives are getting to buy our support for the individual mandate. These hostages will give them political power to match the market power we are leaving them with, and controlling both the market and the forum will allow them to utterly frustrate the actual implementation of any element of the package passed into law that they don't like. We're not actually going to see an end to rescission, or a prohibition on charging higher rates for people with pre-existing conditions, or any of the other fine and noble things that we like, but the industry doesn't.
Ever since the health insurance industry stopped just paying fee-for-service, and started doing managed care, started using its position as payer to start managing the health delivery system, it has thereby enjoyed control of this huge sector of our economy. It won't just give up that control. It can't, without failing its fiduciary responsibility to its share-holders, because control in any market is even better than a high margin, today, in a market where you don't control what happens tomorrow. We either kill this industry or atomize it, break it into so many parts that none of them can restrain free trade any more, or it keeps that control from us, and uses that control for the profit maximization that is its duty to its shareholders, rather than for the health maximization that is the public's interest. The public is going to be paying for all this, I think that the people are the ones whose needs should be met.
If we don't bust the trusts, in health insurance and health care delivery, no reform will work. If we do bust them, any reform plan, even no plan beyond busting the trusts, will work. The Hidden Hand will be untied, and in getting monetary costs down, it will get the human costs down as well. Without the distortions created by some combination of the insurance cartels not being able to dun low prices out of the provider cartels, and not wanting to because they own each other; people will pay more for primary care, and less for specialty care, more for evaluation, and less for the procedures that thoughtful evaluation will often find not necessary.
What we would have in the post-trust world of health-care financing, would look like what they have in France or Holland. They still have private insurers collect premiums and pay claims, and they are allowed to extract modest carrying charges for performing these functions, but these insurers do not manage the delivery of health care, and therefore do not control health care delivery in their countries. The result is the moral equivalent of Single Payer, a national health insurance system that achieves the goals of social insurance, but differs from Single Payer only in using private firms to handle collections and payments.
That'd work.