Pete Stark: "Medical Unicorns"

Why are co-ops a non-starter in the health care reform debate? Because they won't work. On Thursday Pete Stark blasted them:

there is no real example of either the regulation [of health co-ops], or how you would establish them, or where they would get enough people to have a purchasing base. So you might as well talk about unicorns.

From a paper released Thursday,

a public health insurance option could also lead to a more transparent market. As long as insurers conceal provider prices, price competition in provider markets is unlikely. As long as coverage protocols and utilization data are concealed, quality competition among plans is unlikely. The coverage protocols and provider payment rates of the public option, on the other hand, would be open to the public. And data on the utilization of health care services under the public plan would be available for expert analysis and reporting, just as Medicare data are now.

Finally, the public option is necessary as a backstop against risk selection. It takes more than simply prohibiting risk selection to stop it. Even with risk adjustment and strong non-discrimination rules, private insurers are likely to find a way to dodge people whose costs are expected to be high in order to protect profitability. The job of the public option, on the other hand, is to accept, not to avoid, risks and to be accountable to the public, not shareholders.

What mcjoan said:

That's what all the fuss is about, why this has become the key element of a proposal for so many people. We want the damned reform to actually work. Co-ops won't make it work, they just aren't going to be robust enough to do the job. Insurance reform is really good, and we very much need that, too, but it isn't going to be enough either. For one thing, does anybody seriously believe that our government could set up a strict regulatory scheme that insurance companies would actually follow? That'd be a first.