The High Stakes Health Care Race

Commentary By Ron Beasley

The health care industry has a horse in the health care race but so do the Republicans, the Democrats and Obama. 

For the Republicans this race is about more than money - it's about survival.  If Obama and the Democrats get a public option it will be successful and popular.  The Republicans know this and that's why they are fighting it.  Of course there's the money to.  Robert Parry tells us to look at one of the most vocal critics of the public plan, Senator Grassley:

For instance, since 2005, Grassley�s various political action committees have collected nearly $1.3 million in donations from the industries related to the health insurance debate, according to OpenSecrets.org. Grassley�s top four donor groups were Health ($411,956); Insurance ($307,348); Pharmaceuticals ($233,850); and Hospitals ($197,137). Eighth on Grassley�s donor list were HMOs at $130,684.

If the Democrats and the Obama administration don't get at least a public plan the Obama administration will be seen as a failure.  Robert Reich rightly demands a "real" public health care option:

Here's the latest contortion from Senate Dems trying to win over a few Republicans to a "public option": Let nonprofits create healthcare cooperatives, then call them the public option. Kent Conrad, of North Dakota, chair of the Senate Budget Committee, came up with this bamboozle. Finance Committee chair Max Baucus, D-Mont., is impressed, and some Republicans � even Chuck Grassley of Iowa � seem interested. Watch your wallets.

Nonprofit healthcare cooperatives won't have any real bargaining leverage to get lower prices because they'll be too small and too numerous. Pharma and Insurance know they can roll them. That's why the Conrad compromise is getting a good reception from across the aisle, just as Olympia Snowe's "trigger" (whereby there's no public option until sometime down the pike, and only if Pharma and Insurance don't bring down costs and extend coverage a tad) is also gaining traction.

The truth is that there's only one "public option" that will truly bring down costs and premiums � one that's national in scale and combines its bargaining power with Medicare, and that's allowed to negotiate lower drug prices and lower doctor and hospital fees. And that's precisely what Pharma and Insurance detest, for exactly the same reason.

And then we have the insurance companies.  They know change is going to happen but maybe, just maybe they can turn it to their advantage.  Robert Parry again:

To understand the financial stakes involved in the battle over U.S. health-care reform, it�s useful to keep two numbers in mind: 50 million and 119 million.

The first number is the approximate total of Americans without health insurance, a new market that the private health insurance industry is salivating to get its hands on. The industry�s hope is that the government will mandate that those Americans sign up for private insurance and offer subsidies for those who can�t afford to pay the premiums.

Fifty million new customers and government largesse to help pay the bills would be a huge windfall for the insurance industry, which otherwise faces a decline in its market because Baby Boomers are reaching the age to qualify for Medicare and because rising unemployment is draining the pool of Americans who have insurance through their employers.

And the 119 million?  That's the number the insurance companies might lose to a real public option according to Senator Grassley.  And that's probably optimistic - a successful public option would probably eventually morph into single payer because the private insurance companies would not be able to compete.  So in this horse race there is no place or show -  it's win or nothing for the insurance companies.

So the question is how hard will Obama fight for the public option?  I wish I could be more optimistic.  The current economic crisis has left bankers about as popular as the H1N virus and the banking industry ripe for restructuring and regulation but we haven't seen it.  The insurance companies are even less popular and the socialized medicine ads are having little effect on public opinion I fear they are having an effect on the politicians.  You can forget about the economy and the wars health care will be the thing that makes or breaks the Obama presidency.

Update

While it appeared the conservative AMA came out in opposition to a public plan now they are saying maybe not:

The remarks came just several hours after the American Medical Association said it would oppose a public option for coverage. But in a reflection of just how delicate this debate has become, the 250,000 member physician group largely backtracked from its opposition later in the day.

"Make no mistake: health reform that covers the uninsured is AMA's top priority this year," a clarifying statement from the group read. "Every American deserves affordable, high-quality health care coverage.

"Today's New York Times story creates a false impression about the AMA's position on a public plan option in health care reform legislation. The AMA opposes any public plan that forces physicians to participate, expands the fiscally-challenged Medicare program or pays Medicare rates, but the AMA is willing to consider other variations of the public plan that are currently under discussion in Congress. This includes a federally chartered co-op health plan or a level playing field option for all plans. The AMA is working to achieve meaningful health reform this year and is ready to stand behind legislation that includes coverage options that work for patients and physicians."

Could this be a writing on the wall moment?