Free Markets, Free People

Politics

A Closer Look At European Health Care

We continue to hear how wonderful it is as compared to the horrible US system.

But is it? One of the fundamental truths of any health care system is you have infinite demand meeting finite resources (beds, doctors, availability, etc). Whatever system a country has, that truth doesn’t change.

So, regardless of system, there is going to be some sort of rationing. It is unavoidable and inevitable.

Now add a desire to control and cut costs associated with the provision of health care to the mix (the promise of every one of these government systems). On the one side, as European nations have done, access to health care is expanded to include everyone. On the other hand, these same nations attempt to control health care costs.

The result? Very mixed. France is always held up as the exception to the rule that government health care can’t be both good and inexpensive. But a closer examination seems to indicate that it isn’t an exception at all:

A World Health Organization survey in 2000 found that France had the world’s best health system. But that has come at a high price; health budgets have been in the red since 1988.

In 1996, France introduced targets for health insurance spending. But a decade later, the deficit had doubled to 49 billion euros ($69 billion).

“I would warn Americans that once the government gets its nose into health care, it’s hard to stop the dangerous effects later,” said Valentin Petkantchin, of the Institut Economique Molinari in France. He said many private providers have been pushed out, forcing a dependence on an overstretched public system.

Why have private providers been “pushed out”? Because government has provided health care “cheaper” than do private providers (and obviously at a loss given the deficit). Notice I said “cheaper”. That doesn’t necessarily mean “better”.

And the same thing is being seen in other European health care systems which are considered “models” of government run health care:

Similar scenarios have been unfolding in the Netherlands and Switzerland, where everyone must buy health insurance.

“The minute you make health insurance mandatory, people start overusing it,” said Dr. Alphonse Crespo, an orthopedic surgeon and research director at Switzerland’s Institut Constant de Rebecque. “If I have a cold, I might go see a doctor because I am already paying a health insurance premium.”

Cost-cutting has also hit Switzerland. The numbers of beds have dropped, hospitals have merged, and specialist care has become harder to find. A 2007 survey found that in some hospitals in Geneva and Lausanne, the rates of medical mistakes had jumped by up to 40 percent. Long ranked among the world’s top four health systems, Switzerland dropped to 8th place in a Europe-wide survey last year.

Dr. Crespo’s point is simply an astute observation of human nature. If something doesn’t directly cost the user, why would the user ration the use of such a benefit?

The use, however, still costs someone or something. The doctor must be paid, the institution must be paid, etc. So in the end, the only way to control costs is to cut payments. Eventually, the incentives to enter the health care field become less attractive (unless you like long hours, overrun waiting rooms, minimal time with patients, being second-guessed by a bureaucracy and making much less than a private system allows for compensation) and there are fewer that enter the field. Hospital beds then drop, hospitals merge and there are fewer specialists available to serve the population as Switzerland is discovering.

And then there’s the lack of innovation to face.

Bureaucracies are slow to adopt new medical technologies. In Britain and Germany, even after new drugs are approved, access to them is complicated because independent agencies must decide if they are worth buying.

When the breast cancer drug Herceptin was proven to be effective in 1998, it was available almost immediately in the U.S. But it took another four years for the U.K. to start buying it for British breast cancer patients.

The promise that has been made in the US is health care reform will return the decision making to the doctor. But that’s simply a false promise given the priorities of the reform we’ve been promised. It is to cut cost and make care “affordable” to all. Somewhere is a bureaucracy in waiting which will decide what “affordable” means – and it won’t include your doctor.

So you can expect innovation to begin to slow. Why invest billions when a bureaucracy will decide whether or not it’s a medicine or treatment worth the cost. The same bureaucracy will also decide what it will pay for your innovation. Of course, if the innovator can’t recover the cost of development and make a profit as incentive toward more innovation, the probability exits the developer will simply stop such research.

“Government control of health care is not a panacea,” said Philip Stevens, of International Policy Network, a London think-tank. “The U.S. health system is a bit of a mess, but based on what’s happened in some countries in Europe, I’d be nervous about recommending more government involvement.”

Words of wisdom most likely to be ignored by our legislators here. And the unfortunate thing is it will not only destroy an excellent health care system here, but, given the level of government spending forecast, tank the rest of the economy as well.

~McQ

[HT: Carol D]

Welcome To One-Party Rule (Updated)

It’s now official: only one party has the reins to power in Washington, DC:

The Minnesota Supreme Court on Tuesday unanimously ruled Al Franken the winner of last November’s Senate race, putting the former “Saturday Night Live” star on the brink of becoming a United States senator and Democrats on the cusp of holding a dominant 60-vote supermajority in the Senate.

In a unanimous 5-0 decision, the court upheld a three-judge panel’s April 14 ruling that Franken defeated Republican Norm Coleman in the race by 312 votes out of 2.9 million cast. The 32-page was remarkably decisive, picking apart and rejecting one Coleman legal claim after another.

[…]

If Franken is seated, Democrats would hold a 60-40 majority in the Senate, the largest the party has enjoyed in a generation. Sixty votes are needed to break filibusters, ensuring that if Democrats stay united they would be able to cleave the GOP’s last lever of power in Washington. A Franken “yes” vote on health reform, climate change legislation and Supreme Court nominee Sonia Sotomayor gives Senate Majority Leader Harry Reid (D-Nev.) even more of a margin for error on these major votes.

Democrats were already celebrating the result.

Gov. Tim Pawlenty already stated that he would sign the election certificate for Franken if directed to do so by the Supreme Court, so this is pretty much a done deal. Coleman has not indicated whether he would appeal the decision to the U.S. Supreme Court, and the Minnesota Republican Party doesn’t seem to sanguine about pushing further:

Even Minnestoa Republicans – highly disappointed by the ruling – weren’t ready to call for a federal legal challenge.

The Minnesota Republican Party issued a strongly worded statement, saying the ruling “wrongly disenfranchised thousands of Minnesotans who deserve to have their votes counted.”

But the chairman-elect of the party, Tony Sutton, made no mention of next steps, only saying, “As we move forward, our deeply flawed election system must be dramatically improved to ensure our state’s elections are fair, accurate and reliable.”

Assuming that Coleman doesn’t seek cert., or if he does that no stay of the decision is put into place, then Franken will be seated as early as next week. With a vetofilibuster-proof majority in the Senate, the Democrats won’t need to play parliamentary games like using reconciliation bills, or the like, and instead will simply shove legislation down the throats of the minority. So get ready for cap-and-trade, government health care, huge tax increases, and a host of other government programs that don’t need and can’t pay for.

The only downside for Democrats is that they can’t credibly blame the fiscal and economic woes on Bush anymore as they will have cornered the political market. I say “credibly” because they will continue to do so, and the media mostly won’t call them on it, but such claims will be laughably false. The real question is, how and when will this come back to haunt them?

UPDATE: Coleman concedes.

George W. Obama

What were the charges?

Expanded executive power. Trampled on rights. Ruled by executive order. Creeping authoritarianism.

Does that about cover most of what the left tried to hang on the Bush presidency? And who was the answer to all those problems?

Well feast your eyes:

The Obama administration, fearing a battle with Congress that could stall plans to close the U.S. prison at Guantanamo Bay, is drafting an executive order that would reassert presidential authority to incarcerate terrorism suspects indefinitely, according to three senior government officials with knowledge of White House deliberations.

Such an order would embrace claims by former president George W. Bush that certain people can be detained without trial for long periods under the laws of war. Obama advisers are concerned that bypassing Congress could place the president on weaker footing before the courts and anger key supporters, the officials said.

So it was never about principle, was it? It was always about politics.

Hope and change.

~McQ

[HT: tkc]

“Man-Made Warming” Dubbed “Worst Scientific Scandal In History”

I understand that everywhere else today it is “Michale Jackson is dead” day – I suspect days such as this must be infinitely boring to most news junkies because the news is dominated by a single topic.

Meanwhile Democrats are doing their best to rush cap-and-trade through the House today even while the pseudo-science that supports their effort continues to collapse.  The WSJ has an article today which points out:

Among the many reasons President Barack Obama and the Democratic majority are so intent on quickly jamming a cap-and-trade system through Congress is because the global warming tide is again shifting. It turns out Al Gore and the United Nations (with an assist from the media), did a little too vociferous a job smearing anyone who disagreed with them as “deniers.” The backlash has brought the scientific debate roaring back to life in Australia, Europe, Japan and even, if less reported, the U.S.

Interestingly, as the EPA story below points out, it has actually been suppressed here. But that hasn’t stopped the scientific community elsewhere from continuing to destroy the myth of consensus and replace it with a healthy, and might I add peer reviewed, skepticism real science brings to any theory:

In April, the Polish Academy of Sciences published a document challenging man-made global warming. In the Czech Republic, where President Vaclav Klaus remains a leading skeptic, today only 11% of the population believes humans play a role. In France, President Nicolas Sarkozy wants to tap Claude Allegre to lead the country’s new ministry of industry and innovation. Twenty years ago Mr. Allegre was among the first to trill about man-made global warming, but the geochemist has since recanted. New Zealand last year elected a new government, which immediately suspended the country’s weeks-old cap-and-trade program.

The number of skeptics, far from shrinking, is swelling. Oklahoma Sen. Jim Inhofe now counts more than 700 scientists who disagree with the U.N. — 13 times the number who authored the U.N.’s 2007 climate summary for policymakers. Joanne Simpson, the world’s first woman to receive a Ph.D. in meteorology, expressed relief upon her retirement last year that she was finally free to speak “frankly” of her nonbelief. Dr. Kiminori Itoh, a Japanese environmental physical chemist who contributed to a U.N. climate report, dubs man-made warming “the worst scientific scandal in history.” Norway’s Ivar Giaever, Nobel Prize winner for physics, decries it as the “new religion.” A group of 54 noted physicists, led by Princeton’s Will Happer, is demanding the American Physical Society revise its position that the science is settled. (Both Nature and Science magazines have refused to run the physicists’ open letter.)

It is falling apart in big chunks now – not that anyone on the left here is listening. We’ve got the fingers firmly in the ears in Congress and the EPA. Both made up their minds years ago, having bought into the pseudo-science of Al Gore and are now determined to act on their preconceived notions – science be damned.

Economist John M. Keynes once said, “When the facts change, I change my mind. What do you do, sir?”

The answer for the left is ignore them and pass economy killing legislation as fast as they can.

The collapse of the “consensus” has been driven by reality. The inconvenient truth is that the earth’s temperatures have flat-lined since 2001, despite growing concentrations of C02. Peer-reviewed research has debunked doomsday scenarios about the polar ice caps, hurricanes, malaria, extinctions, rising oceans. A global financial crisis has politicians taking a harder look at the science that would require them to hamstring their economies to rein in carbon.

Meanwhile our blinkered ideologues push cap-and-trade while ignoring the new evidence.

Comforting, isn’t it?

~McQ

Questions And Observations

Some conversation starters:

  • For new readers, the title is what the shortened “QandO” means.
  • I’m constantly amused by the anecdotal evidence I gather while on the road that says if you’re over 65 you have to drive a Buick.
  • One thing to keep in mind as you listen to all of these proponents tell you that government can do health care better than the private sector – The private sector is a net producer of wealth. The government sector is a net consumer of wealth. That’s why the more of the economy a government takes over the less wealth is produced and thus available within the economy.
  • Interesting chart showing the level of spending in the last 12 months compared to the spending over the last 206 years in inflation adjusted dollars.  How do people believe that such a massive increase in spending doesnt have to be paid for at some point?
  • Is Obama’s honeymoon over?  Is enough resistance building to derail some of these economy killing policies and programs now on the table?
  • Former President Bush speaks out, apparently tired of a president 150 days into his own administration continuing to blame the previous administration. Appropriate or should he remain silent? And interestingly, since the left excused Jimmy Carter’s criticism of the Bush administration, does that mean they’re fine with Bush speaking out?
  • Is it “IGgate”? What’s up with this story about the Americorps IG and are there more IGs with whom the administration has messed? Wasn’t this the administration which was going to “return” us to the “rule of law”? Why aren’t they following it?

~McQ

Krugman: The “Nipponisation” of the World

After a lot of partisan “happy talk” about how the Obama administration is handling the economic crisis here, Paul Krugman goes on record saying the world is doomed to suffer Japan’s lost economic decade on a global scale.

The thing about Japan, as with all of these cases, is how much people claim to know what happened, without having any evidence. What we do know is that recessions normally end everywhere because the monetary authority cuts interest rates a lot, and that gets things moving. And what we know in Japan was that eventually they cut their interest rates to zero and that wasn’t enough. And, so far, although we made the cuts faster than they did and cut them all the way to zero, it isn’t enough. We’ve hit that lower bound the same as they did. Now, everything after that is more or less speculation.

For example, were the problems with the Japanese banks the core problem? There are some stories about credit rationing, but they are not overwhelming. Certainly, when we look at the Japanese recovery, there was not a great surge of business investment. There was primarily a surge of exports. But was fixing the banks central to export growth?

In their case, the problems had a lot to do with demography. That made them a natural capital exporter, from older savers, and also made it harder for them to have enough demand. They also had one hell of a bubble in the 1980s and the wreckage left behind by that bubble – in their case a highly leveraged corporate sector – was and is a drag on the economy.

The size of the shock to our systems is going to be much bigger than what happened to Japan in the 1990s. They never had a freefall in their economy – a period when GDP declined by 3%, 4%. It is by no means clear that the underlying differences in the structure of the situation are significant. What we do know is that the zero bound is real. We know that there are situations in which ordinary monetary policy loses all traction. And we know that we’re in one now.

Shorter Krugman, “we’re in new territory in terms of the size of the problem, but it is all eerily similar to what happened to Japan”. Unfortunately our reaction has been eerily similar to what Japan did as well.

Krugman’s bottom line:

WH: So, one way to think about it is that self-reinforcing financial crises rooted in overstretched, overborrowed companies and governments in less developed countries – like those in Argentina and Indonesia, which were amazingly destructive in the 1990s and 2000s, but localised – are now playing out in the developed world?

PK: There are really two stories. One is the Japan-type story where you run out of room to cut interest rates. And the other is the Indonesia- and Argentina-type story where everything falls apart because of balance-sheet problems.

WH: So in a nutshell your story is …

PK: The “Nipponisation” of the world economy with a bunch of “Argentinafications” playing a role in the acute crisis. But even after those are over, we have the Nipponisation of the world economy. And that’s really something.

And of course, implicit in the “Nipponisation” of the world economy is the “Nipponisation” of the US economy – something we’ve been talking about for some time. Now, add “cap and trade” and “health care reform” into the mix.

What will we be wishing we were suffering when that all kicks in, should it pass? Nipponisation, of course. As bad as lost decade or two might be, it would be heaven compared to the economic carnage those big tax and spend programs will inflict on a very weak economy here in the US. And that, of course, will ensure the “Nipponisation” of the world economy.

~McQ

Embracing Paygo

Republicans and some allies are criticizing President Obama’s proposal for “pay as you go” rules that only cover new and expanded entitlement spending. They rightly point out that legislators can get around these new rules with budgetary tricks like relabeling spending so that “PAYGO” rules don’t apply.

But some on the Right have also warned that paygo will just lead Democrats to pass higher taxes. I’m not convinced that that’s a bad thing.

Don’t get me wrong: I don’t like taxes. But deficit spending is taxation — deferred taxation, with interest. If the government is going to spend a bunch of our wealth on things other than emergencies, enlightened fiscal conservatives should want the American people to see the price tag, the sooner the better.

Otherwise we’re going to continue this business of borrowing from our children to pay for our reckless spending today – that’s what a lot of those tea partiers were protesting against, wasn’t it?

So fiscal conservatives should propose even more comprehensive and stringent paygo legislation than the Democrats have. Force the Democrats to put it all on the table – lock in tax hikes or spending cuts, now.

We’re going to have to do pay the piper at some point, so how does it help to wait until a real fiscal emergency is upon us?

The longer we wait to pay for it through direct taxation, the more time we give the spenders to come up with clever ways to conceal the cost – whether through inflation, or carefully targeted taxes designed to create as little political backlash as possible. Paygo creates forced errors.

If the Democrats decide to cover the gap with tax increases, that’s an issue for 2010 and beyond. Every new big spending plan, like the Obama health care plan, comes with a surefire tax increase in the near future. And as Californians recently showed the country, even Lefty voters don’t like the prospect of actually paying for all those neat programs for which they voted.

Sure, it’s self-serving for Republicans who engaged in no small amount of deficit spending themselves to suddenly find religion on the need for a balanced budget.

But there are good reasons to suspect that this level of deficit spending (and the necessary money-printing that has followed) is going to hit us in all kinds of unpleasant ways. If we don’t commit now to eventually paying off these debts, the problems will get even worse.

So let’s do something about it – or turn the heat up on the Democrats until they do something about it. Let’s give them all the paygo and fiscal discipline they can handle, and then some.

Was Von Brunn An Equal Opportunity Hater?

It appears that could be the case. Kathy Shaidle:

The anti-semitism of von Brunn is the first thing one notices when visiting these bizarre websites. However, like those of most “white supremacists”, many of von Brunn’s political views track “Left” rather than “Right.” Clearly, a re-evaluation of these obsolete definitions is long overdue.

For example, he unleashed his hatred of both Presidents Bush and other “neo-conservatives” in online essays. As even some “progressives” such as the influential Adbusters magazine publicly admit, “neoconservative” is often used as a derogatory code word for “Jews”. As well, even a cursory glance at “white supremacist” writings reveals a hatred of, say, big corporations that is virtually indistinguishable from that of anti-globalization activists.

Shaidle’s point is valid (as is her point about the “obsolete definitons”). This guy wasn’t a product of “right-wing” or “left-wing” views, this guy was a hater of all things that even hinted of Jews, right or left. He was an anti-semite to the core and, frankly, a nut.

Trying to score political points with this tragedy seems badly strained at best and truly an example of how low our political discourse has fallen. Instead of talking about the tragedy of the loss of the security guard to a lunatic, the first thing some want to do is play politics, point fingers and stereotype. That says more about them (you know, the tolerant and non-judgmental types?) than those to whom they’re pointing.

~McQ

Prepare To Be Smeared

Stephen Tyrone Johns lost his life today at the hands of a deranged man who terrorized the Holocaust Museum in Washington, DC:

A Holocaust Museum guard died after being shot Wednesday in the crowded attraction and a gunman was seriously wounded in return fire, authorities said. The incident left panic-stricken visitors dashing for exits, witnesses said.

“Officer Stephen Tyrone Johns died heroically in the line of duty today,” a late-afternoon museum statement said. “There are no words to express our grief and shock over these events.

“He served on the museum’s security staff for six years. Our thoughts and prayers go out to Officer Johns’ family.”

If you are of the type to be deemed “right wing” by anyone who considers themselves not to be right-wing, then after saying a prayer for Mr. Johns and his family prepare yourself for the onslaught of comparisons that will be made between you and Mr. James Wenneker von Brunn:

D.C. Police Chief Cathy Lanier believes the suspect was acting alone when he entered the museum just before 1 p.m., raised his rifle and began shooting. The suspect started shooting before going through metal detectors, Lanier says.

Von Brunn is said to be affiliated with white supremacist web sites.

Federal law enforcement sources tell WTOP Von Brunn is a convicted felon. He had been convicted of bringing weapons into the Federal Reserve and served time in a federal penitentiary.

A Web site apparently linked to Von Brunn contains Anti-Semitic and racist writings and promotes a book written by Von Brunn. The biography section of the Web site says Von Brunn was born in 1920, was a lieutenant in the U.S. Navy Reserves and a captain of a patrol torpedo boat during World War II and received four battle stars.

After a career in New York City as a copywriter and art director, Von Brunn now lives on Maryland’s Eastern Shore, where he is an artist, according to the Web site.

Because Mr. von Brunn was associated with anti-semitic and neo-nazi hate groups he will automatically be deemed “right wing” just like you. Nevermind that he also seems to have supported other, not-so-right-wing causes as well, or that just today a famous anti-semitic buddy of the President’s resurfaced with a timely quote. As someone labeled “right wing” you will now be forced to carry the von Brunn albatross around your neck.

Moreover, Gaia help you if you squawked about being lumped in with such extremist nutjobs when that DHS report came out, because that only proves their point that you, too, are a right-wing hater who approves of all such vicious murders. And no, there is nothing ironic about the fact that the non-right-wingers are now doing the same thing to you that the DHS report did because you complained about the DHS report doing it. Nothing wrong with that at all, nosiree.

So be prepared, because the caterwauling is coming. Indeed, as Legal Insurrection notes, it didn’t take very long at all for this meme to start up:

Although the shooting is only hours old, numerous blogs already are attempting to tie the act of violence to conservatives and criticism of the Obama administration’s overly broad definition of those who are “extremists.” Posts such as “this looks like the latest episode in what is looking like the spate of right-wing violence we’ve been predicting” or “the right wing has lost whatever restraint it had” or “perhaps it’ll be time to revisit all that criticism of the DHS report” are highly irresponsible attempts to take political advantage of this apparently lone-wolf tragedy.

Ed Morrissey takes on the DHS angle:

Yet again, we have a despicable attack based on hatred and political extremism, the third such attack in two weeks to result in fatalities. Doubtless many people will try to find ways to score political points, like the e-mailer who waited a whole 20 minutes to blame conservatives for dismissing the DHS report on right-wing extremism for this tragedy. To that, I’d respond that our criticism was that the DHS report didn’t focus on known, specific threats, instead making generalized threats about abortion opponents and other vague and broad generalizations about conservative issues. In fact, it never mentioned Holocaust denial at all, nor did it mention anti-semitism at all, either; those terms don’t appear at all in the report. [ed. – my emphasis] And despite being well-known as a threat since the 1980s, the DHS never bothered to identify von Brunn or his organization as a specific threat in the report — which, again, was the heart of our criticism.

To be fair, I have come across one sane “non-right-winger” who seems to understand that a nut is a nut (internal links omitted):

The suspect, James Von Brunn, appears to be a neo-Nazi/white supremacist. This is not an extension of the Republican Party’s, or religious rights’, ideology. There is no question that Tiller’s suspected murderer, Roeder, had direct connections to rightwing propaganda — I drew those connections in this post.

Von Brunn is different. This kook is a neo-Nazi conspiracy theoriest with no connection to the mainstream right. As evidence, here’s his Internet paper trail: an archive of his website “holywesternempire.org”. (The reference to the Germanic Holy Roman Empire during the Middle Ages should be obvious.) Explore his website if you want (I’m not wasting my time), but keep two questions in mind: Do you see links to mainstream rightwing sites? And did any mainstream rightwing websites pay attention to him. Perhaps I need to do more research before answering these questions, but after a cursory look at Von Brunn’s website — as well as trolling rightwing blogs for ages — I think the answers to these questions are no and no.

Tensions are running high and it’s easy to try making a connection between the GOP and people like Von Brunn, but that connection just isn’t logical. Neo-Nazis stand apart from the rest. Let’s not confuse the two.

Despite the reasonableness above, the insanity is already gathering a good deal of speed. By tomorrow night I expect there to be major news reports about the life of von Brunn, how he was connected to neo-nazi groups, how he hated Obama, as well as deep probing questions about how we stop the rising tide of right-wing hate. I would also venture to guess that there will be speculation about whether Dr. Tiller’s murder, von Brunn and that guy from Pittsburgh knew each other, or whether they were in any way affiliated. Their guilt would be further extended to anyone who possibly uttered a conservative idea that sounds vaguely like one expressed by one of the nutjobs, especially if it has a general anti-government flair. In fact, don’t be surprised if Tea Parties are somehow made to blame for all of it.

All because two mentally challenged individuals killed two people. I guess the old Michael Moore-ish pooh-poohing of the fight against terrorism because there is so little chance of your actually dying from it has gone out the window. Of course, if the “non-right-wingers” getting on their collective high horse now had shown even an inkling of the same interest in fighting terrorism as they are exhibiting in their zeal to combat right-wing extremism, then the chances of being killed by a terrorist might be too small to measure.

Nevertheless, extremists have killed and you will be blamed. Consider yourself warned.

UPDATE: As of June 11, 2009 at 12:30 AM ET, Memeorandum has the Rev. Wright story as the lead post to the entire discussion of the Holocaust Museum murder. Hmmmmmm …

* Correction: Originally, the post identified the victim by the last name of Jones. It has been corrected to show the victim’s last name as Johns.

Health Care – “The Public Plan”

Ezra Klein discusses what has commonly become known as the “public plan” in the emerging “health care reform” legislation. Put simply it is “public insurance” which is supposed to compete with the private insurance industry and, as Paul Krugman claims, keep them “honest”.

Klein lays out the various flavors being floated out there concerning this option:

• The “Trigger” Plan: Olympia Snowe is pushing this compromise, as are some conservative Democrats. The basic idea is that the public plan would act as an invisible threat: It would be “triggered” into existence if the private insurance market was unable to offer, say, enough options in a particular region, or enough cost control. In addition, the public plan would only come into existence in this or that region, or this or that state. It would be effectively useless as an insurer. It could potentially have some competitive effect in that private insurers would still work to avoid its existence. Some have argued, however, that the conditions being mentioned in the “trigger” proposals have already been met.

• The Weak Public Plan: This is what people are talking about when they refer to a “level-playing field.” This incarnation of the public plan — first proposed by Len Nichols at the New America Foundation and later echoed by Peter Harbage and Karen Davenport at the Center for American Progress — would have no special advantages over private insurers. It couldn’t use the low rates that Medicare sets or access taxpayer subsidies. It couldn’t force its way into networks. It would simply be another insurer, albeit with different incentives than traditional insurers.

• The Strong Public Plan: This would be like Medicare for the rest of us. It could throw the federal government’s weight around. It could negotiate deep discounts with providers. It could muscle its way into networks. Outside groups like the Commonwealth Fund estimate that it would save the average consumer 20 percent to 30 percent. That would give it a massive competitive advantage over private insurers, and would probably result in tens of millions of Americans dropping their current coverage and entering the public plan to save money. A variant of this was in the draft of Ted Kennedy’s bill that was leaked last week.

While Blue Dog Democrats have come out in favor of the “trigger” option, liberals such as Klein and Krugman prefer the “Strong Public Plan” for the reasons stated (massive dropping of private insurance for “public” (i.e. government) insurance). And there’s a reason they both prefer that – they see it as a backdoor way to move health insurance to a single payer system.

And that is a distinct possibility with both the “strong public plan”. In fact it is a design feature. The “competition” touted would most likely be in name only as Greg Mankiw explains (quoting Krugman to set up his explanation):

What’s still not settled, however, is whether regulation will be supplemented by competition, in the form of a public plan that Americans can buy into as an alternative to private insurance.Now nobody is proposing that Americans be forced to get their insurance from the government. The “public option,” if it materializes, will be just that — an option Americans can choose. And the reason for providing this option was clearly laid out in Mr. Obama’s letter: It will give Americans “a better range of choices, make the health care market more competitive, and keep the insurance companies honest.”

It seems to me that this passage, like most discussion of the issue, leaves out the answer to the key question: Would the public plan have access to taxpayer funds unavailable to private plans?

If the answer is yes, then the public plan would not offer honest competition to private plans. The taxpayer subsidies would tilt the playing field in favor of the public plan. In this case, the whole idea of a public option seems to be a disingenuous route toward a single-payer system, which many on the left favor but recognize is a political nonstarter.

If the answer is no, then the public plan would need to stand on its own financially and, in essence, would be a private nonprofit plan. But then what’s the point? If advocates of a public plan want to start a nonprofit company offering health insurance on better terms than existing insurance companies, nothing is stopping them from doing so right now. There is free entry into the market for health insurance. If a public plan without taxpayer support would succeed, so would a nonprofit insurance company. The fundamental viability of the enterprise does not depend on whether the employees are called “nonprofit administrators” or “civil servants.”

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.

That is a critical point in this debate – there isn’t an insurer out there that has as deep pockets as the US Treasury. If there is public money backing the public option, then the talk of “competition” is a sham. It is being used to placate and fool those who oppose a government takeover of insurance, the result which would surely happen if what Mankiw’s concerns are true. And if you follow the reasoning process that Mankiw has laid out above, it should be pretty darn obvious what the intent of this “public plan” really is, all the happy talk Klein and Krugman throw out there notwithstanding.

Last, but not least, while the “strong public plan” is an obvious short-cut to single-payer government run health care, the other two plans simply delay that same eventual outcome for a while. While there are certainly reforms that could be made in the insurance industry and health care generally, anyone who believes that government can do it a) better and b) more efficiently has simply not been paying attention to the shape government finances are in right now or how large the deficit has grown as it has mismanaged its entitlement empire to this point.

~McQ