The Public Plan and "Honest" Competition

by publius

Greg Mankiw is concerned that a subsidized public option would be unfair to private health care providers:

If [it is taxpayer-subsidized], then the public plan would not offer honest competition to private plans.  . . .  The bottom line: If the goal is honest competition in the provision of health insurance, the public option cannot do much good but can potentially do much harm.

But that's not really the goal.  The goal is to provide the most people possible with the best possible health care.  There's no constitutional obligation to make sure no one is "unfair" to private health care providers.  In any event, according to critics, government-provided health care will lead to a parade of horribles, even with subsidies.  If those criticisms prove true, people won't opt for it anyway.

I assume what Mankiw is alluding to is that people justify the public plan by citing the need to keep private providers "honest."  The idea is that private market has not -- and will not -- provide an acceptable level of services without this competition.  But Mankiw seems to be using this argument to make the conceptually distinct argument that private providers, in turn, shouldn't be subject to supposedly "unfair" competition (i.e., publicly-subsidized plans).  But the latter doesn't follow from the former at all.

If the country opts for a public plan, and people vote with their feet because they like it better, why should we care?

Comments

[Phil]

If doctors in the US were working long hours,

In my experience, they're not. (My sister works in a doctor's office, and she's there more than he is.) Having heard from many people who often have to wait a week or more to get an appointment at their own doctor's office, I can't imagine that doctors in the US are working any significant number of hours more than their Canadian counterparts. I have no cite to that effect, I'm just going on instinct here.

[liberal japonicus]

My mom worked at an orthopedic surgeon's office, and there seemed to be more of a compression effect, coupled with more support staff to do basic work. Also, when my mom was ill and I had come back to stay with her, we spent a lot of time at doctors' offices, but not actually in contact with doctors. I don't say this to denigrate them, all my mom's doctors were well informed about her case, and were happy to answer my questions when I saw them. But it certainly appeared that they were dividing their time into smaller and smaller slices to cope with the patients they had.

[Sean P]

I have to ask.. Why is this the goal?

" The goal is to provide the most people possible with the best possible health care. There's no constitutional obligation to make sure no one is "unfair" to private health care providers."

This goes back to the old social services argument to me.. They didn't truly exist before the Great Depression. Why does the US government have to provide or manage the healthcare scene to ensure the most possible people get the best possible health care. I mean I guess you could argue that falls under "Life" in the govt's role to provide life, liberty, and PoH. I disagree. It is the role of the sole individual to ensure their own welfare in terms of health. It is the govt's role to ensure others do not end a citizen's right to life.

[liberal japonicus]

Sean,
While I think the moral argument carries as much weight, there is also the argument that by letting people die, you are squandering your resources. One reason America has been so successful is that it has tried (fitfully sometimes, but tried nonetheless) to provide equal opportunity to a much wider range of people than other countries. How do we know that the indigent child who dies for reasons that might have been prevented by an early check up didn't have a key insight into some societal problem? By ensuring that the majority of a nation's citizens live and thrive, a nation is playing the odds.

There was a powerpoint presentation making the rounds a few years ago that simply extrapolated from China's population versus the US and said things like 'if the top 1% of the population would be classified as gifted, China's gifted students would be the equivalent of the entire US school population' and other extrapolations such as that. While simplistic, it points at an underlying argument for not simply protecting citizens from violence from other citizen's, but from the range of ailments that could end their life too quickly.

[Sebastian]

"he second (end-of-life care) and third (unnecessary care) seem redundant. We do not have extra doctors providing that extra care; we only have 10% more doctors per capita than Canada does, not remotely twice as many."

I don't think that is correct. End of life care can be much more expensive for reasons other than pure doctor hours. Much more in machines, much more in hospital care, much more in drugs. Probably other things I don't think of.

[Hartmut]

"Otherwise they'd have to work 168 hours per day"

And only lawyers can manage that.

We had a scandal some years ago where doctors claimed so many services rendered to patients (to be reimbursed) that they must have achieved that too, unless they were lying (which is unethical for medical personnel and can therefore be considered highly improbable and a baseless smear of the profession).

[Brett Bellmore]

" that they must have achieved that too, unless they were lying"

Well, of course, that's how lawyers achieve it, too. It's just that since they administer the law, they've arranged for it to be legal for them to lie about it.