It’s interesting to see how the left has co-opted the language of conservatives by arguing that a public health plan would be good for competition. Writes Alexander Hertel of the Economic Policy Institute:
“Far too much of our health care system is characterized by limited or non-existent competition, both in the market for insurers as well as the market for providers. This lack of competition is a major source of the United States’ uniquely high and rising health costs. A public plan option would force private insurers to compete on efficiency and quality, rather than on their ability to enroll the lowest-cost workers and firms. Furthermore, a public plan would introduce competition to currently monopolistic or oligopolistic insurer and provider markets—three or fewer insurers account for at least 65% of market share in 36 states. The situation is even worse in markets for small businesses, where a single insurer in each state generally controls half of the market for health insurance coverage. Further, consolidation of health care provider (especially hospital) markets has also limited insurers’ ability to competitively bargain for lower rates. The presence of a heavily concentrated provider market can increase prices for the same treatment by 40% or more. The public plan would guarantee competition even in these consolidated markets, leveraging its size and efficiencies to bargain for the most efficient rates with health care providers.”
The health insurance industry, meanwhile, seems to be arguing that the reason we can’t have a public plan is that it would be too successful.
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I can agree with them, except that the lack of competition, market forces, transparency of pricing data, etc, is in the PROVIDER world. No doubt about it.
WR