Urban Institute Overviews The Public Option

Ezra Klein of The Washington Post has called this the "best overview of the public option" he has read so far, and I concur:

Getting to a Public Option that Contains Costs: Negotiations, Opt-Outs and Triggers

Robert A. Berenson, John Holahan, Stephen Zuckerman

The debate over a public option has essentially become a debate over the size and role of government in the health care system. The central argument, as we see it, should be one of fiscal conservatism—that a public option should play a role in addressing the very serious problem of health care cost containment. The current debate between the left and the right on this issue is obscuring the fact that consolidation in both the insurance and provider markets is propelling a higher rate of growth in health care costs. The consolidation of power, particularly in provider markets, makes it extremely difficult for insurers to negotiate rates for their services and contributes to rapid growth in health care costs. A strong public option is one that ties provider rates in some way to Medicare rates (though set at likely higher levels), and that is open to any individual or firm regardless of firm size. It would thus provide countervailing power to providers and help control cost growth.

We argue that a strong version is necessary because there is little else in health reform that can be counted on to contribute significantly to cost containment in the short term. Capping tax-exempt employer contributions to health insurance has great support among many analysts (including us), but it faces considerable political opposition. Proposals such as comparative effectiveness research, new payment approaches, medical homes and accountable care organizations, all offer promise but could take years to provide savings. Thus, the use of a strong public option to reduce government subsidy costs and as a cost containment device should be an essential part of the health reform debate.

We recognize that there is opposition to a strong public option. Both the House and Senate proposals are considering relatively weak versions to make the public option more acceptable. Both proposals would have the public option negotiate rates with physicians and hospitals. We see two problems with this. One is that negotiating rates is not simple and it raises difficult implementation issues; for example, with whom would the government negotiate? Further, negotiations are most likely to be unsuccessful with providers who have substantial market power. Since this is at the heart of the cost problem, a strategy of negotiations seems unlikely to be effective, as has been affirmed by cost estimates from the Congressional Budget Office.

The Senate has proposed a public option with an opt-out provision. This has the advantage of recognizing regional diversity in political philosophy by allowing states to pass legislation to keep it from being offered in their states. A disadvantage of this proposal is that it would exclude many who would potentially benefit from a public option. The states likely to opt out are likely to be those with high shares of low-income people and many uninsured.

The other alternative is to establish a strong public option but not implement it unless a triggering event occurred. The goal would be to allow the private insurance system to prove that it can control costs with a new set of insurance rules and state exchanges. The triggering events could be the level of premiums exceeding a certain percentage of family incomes or the growth in health care spending exceeding certain benchmarks. Since the public option would only be triggered because of excessive costs, however measured, we assume that a relatively strong version of a public option would come into play.

We recognize that taking a strong public option off the table may be necessary to enact reform legislation. But this will mean, at a minimum, higher government subsidy costs by not permitting a payer with substantial market power to bring cost containment pressure on the system. The outcome is likely to be that costs will continue to spiral upward. In effect, the nation would be relying on the range of promising pilot approaches to cost containment that would take some time to be successful. If they are not, we may be left with increasingly regulatory approaches, such as rate setting or utilization controls that apply to all payers. This would mean much more government involvement than giving people a choice of a low-cost public option that would be required to compete with private insurers.

(Read entire paper in PDF)

The Sotomayor Hearings: Day One

Following is the prepared text of Judge Sonia Sotomayor's opening statement before the Senate Judiciary Committee on Monday, as released by the White House:

Thank you, Mr. Chairman. I also want to thank Senators Schumer and Gillibrand for that kind introduction.

In recent weeks, I have had the privilege and pleasure of meeting eighty-nine gracious Senators, including all the members of this Committee. I thank you for the time you have spent with me. Our meetings have given me an illuminating tour of the fifty states and invaluable insights into the American people.

There are countless family members, friends, mentors, colleagues, and clerks who have done so much over the years to make this day possible. I am deeply appreciative for their love and support. I want to make one special note of thanks to my mom. I am here today because of her aspirations and sacrifices for both my brother Juan and me. Mom, I love that we are sharing this together. I am very grateful to the President and humbled to be here today as a nominee to the United States Supreme Court.

The progression of my life has been uniquely American. My parents left Puerto Rico during World War II. I grew up in modest circumstances in a Bronx housing project. My father, a factory worker with a third grade education, passed away when I was nine years old.

On her own, my mother raised my brother and me. She taught us that the key to success in America is a good education. And she set the example, studying alongside my brother and me at our kitchen table so that she could become a registered nurse. We worked hard. I poured myself into my studies at Cardinal Spellman High School, earning scholarships to Princeton University and then Yale Law School, while my brother went to medical school. Our achievements are due to the values that we learned as children, and they have continued to guide my life’s endeavors. I try to pass on this legacy by serving as a mentor and friend to my many godchildren and students of all backgrounds.

Over the past three decades, I have seen our judicial system from a number of different perspectives – as a big-city prosecutor, a corporate litigator, a trial judge and an appellate judge. My first job after law school was as an assistant District Attorney in New York. There, I saw children exploited and abused. I felt the suffering of victims’ families torn apart by a loved one’s needless death. And I learned the tough job law enforcement has protecting the public safety. In my next legal job, I focused on commercial, instead of criminal, matters. I litigated issues on behalf of national and international businesses and advised them on matters ranging from contracts to trademarks.

My career as an advocate ended—and my career as a judge began—when I was appointed by President George H.W. Bush to the United States District Court for the Southern District of New York. As a trial judge, I decided over four hundred and fifty cases, and presided over dozens of trials, with perhaps my best known case involving the Major League Baseball strike in 1995.

After six extraordinary years on the district court, I was appointed by President William Jefferson Clinton to the United States Court of Appeals for the Second Circuit. On that Court, I have enjoyed the benefit of sharing ideas and perspectives with wonderful colleagues as we have worked together to resolve the issues before us. I have now served as an appellate judge for over a decade, deciding a wide range of Constitutional, statutory, and other legal questions.

Throughout my seventeen years on the bench, I have witnessed the human consequences of my decisions. Those decisions have been made not to serve the interests of any one litigant, but always to serve the larger interest of impartial justice.

In the past month, many Senators have asked me about my judicial philosophy. It is simple: fidelity to the law. The task of a judge is not to make the law – it is to apply the law. And it is clear, I believe, that my record in two courts reflects my rigorous commitment to interpreting the Constitution according to its terms; interpreting statutes according to their terms and Congress’s intent; and hewing faithfully to precedents established by the Supreme Court and my Circuit Court. In each case I have heard, I have applied the law to the facts at hand.

The process of judging is enhanced when the arguments and concerns of the parties to the litigation are understood and acknowledged. That is why I generally structure my opinions by setting out what the law requires and then by explaining why a contrary position, sympathetic or not, is accepted or rejected. That is how I seek to strengthen both the rule of law and faith in the impartiality of our justice system. My personal and professional experiences help me listen and understand, with the law always commanding the result in every case.

Since President Obama announced my nomination in May, I have received letters from people all over this country. Many tell a unique story of hope in spite of struggles. Each letter has deeply touched me. Each reflects a belief in the dream that led my parents to come to New York all those years ago. It is our Constitution that makes that Dream possible, and I now seek the honor of upholding the Constitution as a Justice on the Supreme Court.

I look forward in the next few days to answering your questions, to having the American people learn more about me, and to being part of a process that reflects the greatness of our Constitution and of our nation. Thank you.

***

The Washington Post has coverage of the live blogging from the hearings themselves.

Drudge Report Cover Slanders Obama

Today on The Drudge Report we see the latest example of bias and slander against the president by means of using a misleading photo of Barack Obama above the title of the wbsite.

ABC has the whole video, in which you can see what truly transpired.

Yahoo News is where the link provided by Drudge leads you, but the headline "The Second Stimulus" has nothing to do with the article on Yahoo from which this image originated from.

Mike Drudge knows exactly what he is doing by only posting that photo above and then linking into an article that not enabled with the video version thus the 'whole story.'

It is clear to me, and everyone who did more than giggle at the cover piece, that Drudge will use any excuse to slander and degrade the image of President Barack Obama. Even at the cost of his own credibility.

Todd Venezia of The Washington Post managed to squeeze the truth of the matter into the very last paragraph of his piece.

It was in fact Sarkozy taking a look at the young lady's behind, and not Obama. But such facts mean nothing to people care to do nothing but demean Obama's character with their every breath.

The only person affliated with FOX News to accurately report on this issue has been Greta Van Susteren. Further enforcing the concept that FOX News is a network mainly dedicated to this style of misleading coverage of news events and utterly biased content.