Not surprisingly, the AMA has come out in opposition to a public plan. The reasoning here is pretty simple to understand. If a public plan was imbued with Medicare’s ability to negotiated rates, this would likely result in decreased income for doctors. I wonder though, if this can be addressed in other ways. OMB Director Peter Orszag dropped this hint the other day (subscription required):
White House Office of Management and Budget Director Peter Orszag says he expects a longtime Republican objective — revising the nation’s medical malpractice litigation system — to be a part of health overhaul discussions.[…]
[…]Doctors argue that unreasonable exposure to litigation forces them to order extra tests and procedures as protection against lawsuits, saying that such “defensive medicine” adds significantly to the nation’s health spending.
This seems like a good trade-off to me. Reduce doctors vulnerability to expensive litigation and malpractice insurance could offset the decrease in gross income that may accompany a “strong” public option like the one proposed by Senator Rockefeller. This isn’t to say I expect the AMA to agree to any such quid pro quo, but it seems reasonable in theory.
UPDATE: Igor Volsky makes a very good point over at the Wonk Room.
As Doctors for America — a grassroots organization of doctors dedicated to health reform– argues, “one of the critical features of competition between public and private plans is that in addition to competing for patient participation, plans have to compete for physician participation as well.” Indeed, if public plans institute rock bottom rates that aren’t accepted by health care providers, “Americans having a choice of private plans alongside the public plan would not opt for the latter, which would then either whither away or have to raise fees until it is competitive in the market for enrollees.”
To attract medical providers, the public plan would have to deliver timely, adequate, and efficient payments. As CAPAF Senior Fellow Peter Harbage recently pointed out, “if providers were sure that the public health insurance plan would make timely adequate payments absent the paperwork gimmicks (such as pre-authorization) used by insurers today,” they would likely participate in the program.