REINHARDT'S BARGAIN.

By Dylan Matthews

This wouldn't be Ezra's blog without health care wonkery, so I figured I'd note this interesting proposal by Uwe Reinhardt, flagged by Jon Cohn. Reinhardt suggests that, instead of running a new public plan like Medicare, or trying to limit its advantages in an attempt create a level playing field with private insurers, a new public plan should strike a deal with health care providers. I'll let Cohn explain:

In Reinhardt's vision, the government could promise that the new public plan would pay better than Medicare--say, by 10 or 15 percent on average. That should ease the concerns of insurers, providers, and other groups worried that a public plan wouldn't pay sufficiently high rates.

But in exchange for the higher payments, industry groups--particularly doctors and hospitals--would have to stop resisting changes in the way government pays for medical services. In particular, Medicare (along with the new public plan) would get to bundle payments, make contracts selectively, reward providers who meet quality standards, and tilt reimbursements towards primary care. These shifts have the potential (if done properly) to improve the quality of care while reducing costs in the long run.

This is good policy, but it has the potential to be very effective politics as well. To argue against this, industry groups would in essence be arguing that doctors' compensation should not be determined, even in part, by the effectiveness of the care they provide. That's a really hard argument to make to the public, and an easy one to caricature and mock. Obviously, a lot will defend on the ability of groups like American United for Change or Democracy for America to hit the airwaves with ads mocking just that argument, but the optics of this look good in theory.

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