The Return of the Government-Run Health Plan
On this Friday afternoon, it’s worth examining several paragraphs buried at the end of the Commonwealth Fund’s testimony from earlier this week about the co-operative plans created under the health care law. In the Commonwealth vision, these co-operatives would morph into a “Fannie Med” model, whereby the government would statutorily grant certain privileges – namely, the ability to pay providers lower rates – to the co-ops:
A cooperative health plan would need the authority to purchase care on favorable terms and the ability to offer high-quality networks of providers….First, federal or state governments could guarantee that cooperative health plans are able to obtain the lowest price charged to the most favored customer. A second option is to have a national cooperative organization negotiate provider prices on behalf of all customers….Such a process could be provided to a national “Health Value Authority” and applied to all health plans participating in an insurance exchange, including cooperatives….States might want to consider requiring providers to give health cooperative plans the lowest prices they give to other private insurers.
Just as with a government-run plan, the co-ops envisioned by the Commonwealth Fund would receive “favorable” (i.e., biased) terms through their government charter – the public sector putting a thumb (or a fist) on the scales when competing directly with private companies. And just as with a government-run plan, charging providers low reimbursement rates – because a government diktat mandates such behavior – could result in millions of individuals losing their current coverage, as the Lewin Group has previously predicted.
A final point on this issue comes through in the form of potential double-standards from the left when it comes to provider negotiations. When a private insurer includes clauses requiring that carrier receive a hospital’s or doctor’s lowest prices, the Obama Administration calls the behavior anticompetitive and files a lawsuit. But when the government-chartered co-ops need to get off the ground, the Commonwealth Fund suggests price “negotiations” rigged by the government and calls it “reform.”