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Joe Lieberman has promised to filibuster any health care reform plan that includes a public option.

Lieberman said that he’d vote against a public option plan “even with an opt-out because it still creates a whole new government entitlement program for which taxpayers will be on the line."

I have no doubt that Lieberman's is a principled stand. Let me share a letter with you that I sent to both Senators Lieberman and Dodd. By odd coincidence I noticed, while I was entering the letter into this post, that it was dated exactly sixteen years ago today. Looking back at it after all this time, I have to say my positions have not changed. What I said then, I stick by today. Both senators' responses are linked below.

October 28, 1993

Dear Senator Lieberman:

I am writing to you at this time to express my thoughts on the health care proposals under development by the administration. I am concerned because I do not believe that the ideas I have heard expressed thus far will accomplish the stated goals. I understand these goals to be the reduction of overall health care spending and the accessibility of health care to all people regardless of income level, while maintaining the level of medical excellence that we now enjoy. I am in agreement with the objectives. I question whether the plan, as it appears to unfold, will be successful.

My first concern is the apparent assumption that the cost of medical services to the consumer is related to the cost of their delivery. I has been my observation that the price of any service or product is tied to cost of its production only when there is competition. The President seems to believe the reducing administrative overhead will somehow bring down prices for the consumer. The service that we are ultimately attempting to provide is medicine. Insurance is the vehicle but it is not the service. The price that we would like to control is the price of medical service.

My father once told me a story about insurance and medicine. I occurred in 1955 when he was president of Little League in our town. A boy received a minor injury during a ballgame and was taken by his father to see the doctor. The doctor checked the boy, determined that he was OK, and charged five dollars for the office visit. The boy’s father felt that Little League should pay the bill and my father agreed. He asked the man to have his doctor bill Little League directly, and the league insurance would cover it. When the new bill was presented to Little League it was for ten dollars. Dad was outraged.

In defense of the doctor, it is possible that he had intended to give the boy and his father a break on the office visit, but didn’t feel that he needed to extend this break to the insurance company. Whatever the reason the result is the same. The client with the deep pockets is going to pay top dollar. If this client happens to be an insurance company, there are not likely to be loud complaints about it. Expanding coverage to people who can’t afford it will be wonderful, but I can’t for the life of me see how it will reduce overall spending on health care.

Of course there are always price caps. Even though the memory is fresh in my mind, I realize there are those who don’t remember the lines at the gas stations in the 70’s when we had price controls on oil. It was a perfect demonstration of the principles of Economics 101: a legal price set well below the market price resulting in artificially high demand, low production, and a shortage. Is this the plan for medicine? Please, say it ain’t so.

The issue of who pays for the insurance is also troubling. My understanding of the plan is that employers will pay the lion’s share, with small business employers receiving subsidies. This conjures up images of small employer groups having to devote energy lobbying to protect their subsidies. They become another special interest group. There will undoubtedly be exceptions. What information on what forms will small businesses have to provide to document eligibility for the subsidy? Is this what the president means by re-inventing government? It sounds like business as usual. And again, will we reduce health care spending by the choice of who will pay the insurance premiums? How can we mandate that employers pay for medical insurance and not expect it to have an impact on the job market?

I have a suggestion. I mentioned earlier the notion that the price of a product is tied to its production cost only when there is competition. What I implied there and state here is that I don’t believe there is much in the way of competition in certain segments of the health care industry. I say this first, because of a full page ad that I ran across some years ago in one of the news magazines. It was paid for by the A.M.A. and it said that doctor bills were high because there were too many doctors around. To support this argument the ad went on to point out that New York City had more doctors and higher doctor fees than anywhere else in the world. It crossed my mind that there may have been more doctors there because they thought they could make more money there. Anyway I didn’t buy the argument then, and I don’t now. I believe there could stand to be a little more in the way of competition in this area, and here’s the way I think it can be done.

President Clinton came up with a brilliant plan when he called for a program of national service. This program should be used to train a new generation of doctors, nurses, and technicians, who would each repay his of her medical school tuition by serving an appropriate internship in a military or V.A. hospital. After their internships are completed the trained medical people would be free to go into private practice. License to practice would of course be contingent upon completion of the internship. Rather than expanding insurance coverage, expand the network of military and V.A. hospitals and clinics. These hospitals and clinics would then provide the basic health care package for those people who can’t afford it on their own. Costs would be reduced because you cut out the middle man – the insurance company. Over the long haul costs would be further reduced because there would be an increase in the supply of medical services. More competition is what will reduce health care cost. Not competition among insurance companies, but competition among the people who actually deliver the service.

The importance of the proposals now in development cannot be underestimated. We could do irreparable damage to the medical professions and the high level of care that we now enjoy if we attempt a major overhaul of this industry. We can permanently increase unemployment by forcing employers to shoulder the cost of health insurance. One of the president’s arguments in favor of universal coverage was that we all pay for the uninsured anyway in the form of higher medical bills. If this is so, why not just go ahead and pay for it directly, instead of trying to hide the cost in employee benefits? Our tax dollars can provide the care directly as I have, in very general terms, just described. Whatever the course we choose, I sincerely hope that we will proceed in this matter with great deliberation.

I thank you for your attention and hope to hear your views on this very important topic.

Sincerely,

Thomas D. Bowler

Lieberman's reply is here. Dodd's is here. It's pretty obvious that Lieberman actually read my letter, since he added a hand written note to the second page of his reply. You really can't tell whether Dodd read my letter or not, which leads me to think he did not. That's what staff is for.

Comments

I have always respected Lieberman. He at least seems to stick to his convictions. I can't say I trust him, but he at least is consistent. AS an aside, on the healthcare debate:

http://mikenh.wordpress.com/2009/10/28/i-wasnt-going-to-do-this/

Be well,
Mike

Posted by: Mike in NH | October 28, 2009 at 09:27 PM