Change Policy, Change Behavior

As a parent, I'm familiar with the powerful effect that even the threat of a "change in policy" can have on behavior. It can bring troublesome, annoying, or even hazardous behavior to an abrupt end. That change in behavior suggests two things: that behavior could have been changed voluntarily all along, and that a permanent change in behavior may require a permanent change in policy.

The "threat" of a public health insurance plan as an important part of health care reform, has inspired "concessions" from health insurers that lead me to ask the same question I ask of our son when he responds similarly to a suggested change in policy: "Now, why couldn't you have done that before?" Or, "Why didn't you do that before?" Because every "concession" offered by the insurance industry is one that could have been implemented anytime in the past 20 or 30 years.

Their "concessions" include:

• ending higher premiums for women [1],
• ending higher premiums for those with pre-existing conditions [2], and
• accepting stricter government regulation to avoid a public plan.

In return, they just ask that the government make everyone buy their product, by mandating individual coverage [3] without implementing a public plan.

Now, the insurance industries are allegedly offering up some $2 trillion in savings, by trimming health care costs by 1.5% over the next decade.

As a parent, I believe in giving a child a chance — even several chances — to change his behavior, after making it clear why it (whatever "it" is) needs to stop. When it hasn't changed after several chances, then it's time for us rule changes that will encourage behavioral change. It's usually at this point that — at least with our oldest — negotiations commence, as our six-year-old offers concessions that fall short of what would otherwise be required.

And with the insurance industry, the concessions offered represent far less change [4] (let alone meaningful change) than the proposed public health insurance plan. And, as with our six-year-old negotiator, they know it [5].

A closer look at the insurance industry's plan reveals a potentially huge loophole that could short-circuit genuine reform.

The insurers are saying that they'll treat all people fairly in return for a government requirement that everyone buy their product.

Yet if you read the fine print in their plan, it turns out that they're reserving the right to charge different prices for different levels of coverage -- a practice that would effectively keep us where we are, with sick (or potentially sick) people paying more for insurance.

The loophole was included -- "hidden" is a more apt word -- in a letter sent to prominent senators from a pair of industry leaders: Karen Ignagni, president of America's Health Plans, an industry group; and Scott P. Serota, president of the Blue Cross Blue Shield Assn.

"Benefit design" (which sounds about as innocuous as "unlawful combatants" and "aggressive interrogation techniques"), however, would mean that as much as things changed, they would stay pretty much the same.

That's insurance-speak for offering bare-bones coverage at relatively low prices and more complete coverage at higher prices -- basically the same sort of system we have now.

...The danger, however, is that younger, healthier people would probably gravitate toward the cheaper basic policies, while older people with more health issues would feel compelled to buy the more comprehensive plans.

"It's a very potent way of segregating sick people from healthy people," said Karen Pollitz, a research professor at Georgetown University's Health Policy Institute. "It's essentially a way of continuing to charge more based on people's health."

Which is exactly what the insurers are saying they won't do in return for that much-desired government mandate.

Negotiations and concessions, whether over health care reform or homework, come down to how much one party can still get away with. And the insurance industry has gotten away with a lot in the long, long history of health care reform in this country, which goes all the way back to the inclusion of health care in the Progressive Party platform.

You can see, at various points along the timeline above, insurance companies opposed from the beginning any efforts to provide Americans with affordable, quality health insurance. Though the Clinton plan was the most recent attempt at universal health care in the U.S., what's happening now bears more resemblance to 1977 than 1994.

That's the last time the health insurance industry made a "voluntary effort" [6] to control costs, after President Carter proposed tougher cost controls. The result was the Hospital Cost Containment Act of 1977 [7], passed without cost controls, and a "voluntary effort" that didn't last very long.

More than a decade before the Clinton experience, then-President Jimmy Carter called for legislation to impose cost controls on hospitals as a way to rein in rising medical expenses. The industry came forward and said don't bother with legislation, we will cut costs voluntarily. "Congress never passed cost controls and six months later there was no sign of voluntary cost controls," recalled Robert Blendon, professor of health policy and political analysis at Harvard.

Health care spending soon surged again, and kept rising until 1993-1994 when — again threatened with real change in policy — the industry behaved itself just until the threat passed, and went back to business as usual.

The health care industry had more thirty years, and at least two obvious changes to change practices and policies that served profits more than patients, and put the health and lives of many Americans at risk. In 1977 and in 1994, they engaged in the kind of behavior a child does when he moves his vegetables around on his plate, and claims he's eating them.

After two of the insurance industry's previous "voluntary efforts" to control it's own costs:

• 47 million Americans — including 9.4 million children — still have no health insurance,
• insurance costs outpace income eight-fold [8]
• health care costs top $8,000 per person [9]
  
• about half [10] of the 1.5 million bankruptcies filed every year [11] are due to medical costs
• we spend $2.3 trillion on health care now, and almost half of it does nothing to improve health [12]
• 54% of Americans report haveing skipped medical care [13], filing prescriptions or seeing a doctor, because of costs
• private insurers overcharged Medicare [14], to the tune of billions of dollars
• the uninsured pay $30 billion for health care [15] and overwhelming our emergency rooms [16]

Instead, they gave us more behavior like this.

And more stories like these.

Karen Ignani [19], top lobbyist for health insurers, recently said to a congressional panel:

"We are not asking people to trust us," Karen Ignagni, the president of America's Health Insurance Plans, told a key congressional panel on Tuesday. "We are asking people to trust government."

It's a good thing the insurance industry isn't asking us to trust them. They've done next to nothing to warrant our trust. Asking us to trust the government is a new twist, in that sense. But the government is only as effective as the tools it has to work with. The insurance companies vague promises to change, and an expressed willingness to subject itself to tighter regulation aren't encouraging.

Like other influential corporate lobbies, or any six-year-old, without specific (verifiable and quantifiable ) requirements in place, little change is likely to happen. And the fact that, when a majority of Americans support public plan, the industry has even the slightest bit of leverage on that element of health reform — given its past and recent behavior — suggests that it wields more than enough influence to de-fang any serious regulations before they even come to a vote, let alone take effect. (The ongoing saga of Wall Street bonuses and executive compensation ought to be a sufficient lesson.)

The issue of health insurance reform is too important and the number of people facing loss of insurance too great to accept, let alone celebrate concessions that are short on specifics and largely due to a desire to avoid a policy change that would require greater change in behavior, and on a permanent basis.

Voluntary concessions are too often a tactic to avoid real and lasting change, while giving the appearance of having changed. Without a real change in policy, that inherently includes consequences for proscribed behavior, the temptation is to slip back into some semblance of the old behviors. Especially if they're profitable, which in this case they are.

Health insurers are now doing a good job of seeming to make the kind of changes they could have made for the past 30 years or so, but didn't. Like I said before, sometimes an apparent change in behavior suggests that such change was possible all along, though it didn't happen until there was a real chance things might change. And sometimes it indicates that a real change in behavior depends upon a real change in policy.

It took the threat of a public health plan to get insurers to even appear willing to make changes they could have long since made by now. That doesn't so much indicate their willingness to change on their own, if past behavior teaches us anything, as it makes clear that real change from insurance companies is most likely if we make a real change in our health care system. That change is a public health plan.

The insurance companies know it. And they know that Americans know it [20].

A new poll conducted by Lake Research Partners on behalf of Health Care for America Now (HCAN) found there is “intense and widespread voter support” for the choice of a public health insurance plan as part of comprehensive, national health care reform even when voters hear the sharpest insurance industry attacks such as a public health insurance plan would lead to lower quality health care, more expensive health care, or big government. In paired statements supporting and attacking a public health insurance plan, a majority of voters choose the statement backing a public health insurance option every time.

For example, 62% of voters believe a public health insurance plan will spend less on profits and administration and force private insurers to compete while only 28% of voters believe the attack that a public health insurance plan would be a “big, government bureaucracy.” 60% believe that if private insurers are really more efficient than government, then they won’t have any trouble competing with a public health insurance plan. Only 23% believe a public health insurance plan would have an unfair advantage over private plans.

While recent polling has shown consistent broad support for comprehensive health care reform, this poll specifically addressed whether people want a choice of a public health insurance plan. The answer is an overwhelming yes: 73% of voters want a choice of a private or public health insurance plan, including Democrats (77%), Independents (79%), and Republicans (63%).

Another, more recent, poll released by Consumers Union (non-profit publisher of consumer reports) shows that 66% of Americans support having a public plan as part of health care reform [21]. We've seen it all and heard it all before. It couldn't be clearer: No public plan. No change.