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Analysis: Elizabeth Warren throws down the gauntlet

Elisabeth Rosenthal, Kaiser Health News on

Published in Health & Fitness

Joe Biden, Sen. Kamala Harris, Mayor Pete Buttigieg, et al.: Does your public option -- a government insurance policy that anyone may buy -- resemble Sanders's enhanced Medicare, or current Medicare or Medicaid, which is far more bare bones?

Voters need to know.

There's another obvious reason the candidates have been so close lipped on specifics: To calculate how to pay for any of the plans, the candidates have to say how they intend to bring down prices -- for hospital stays, drugs, procedures, devices, doctors' visits, surgeries. Americans often pay two to 10 times what patients pay for these items in other developed countries.

Those prices will have to come down to make any plan viable without breaking the bank. To really assess any plan, we'll need that kind of information.

Warren has courageously stepped into that fraught territory, with numbers that have very likely sent shock waves through the healthcare industry.

For example, to make her financing proposal work, she suggests paying most hospitals on average 110% of current Medicare rates. She suggests Americans should pay no more for drugs than 110% of the average international market price. That may be eminently reasonable, but is it achievable?

 

When Montana negotiated rates directly with hospitals for its state employees, it settled on a deal in which the state agreed to pay an average of 234% of Medicare rates. And it still saved money.

Setting lower prices is going to bring out strong opposition. Remember, patient (or taxpayer) savings mean loss of income for one of America's most profitable industries, whose lobbyists spent more than half a billion dollars last year and which is flush with dark money to distribute in Congress.

To get the ACA passed, President Barack Obama gave up on a number of price-lowering ideas to get buy-in from the healthcare industry and its friends in Congress. These included jettisoning the idea of a public option and allowing Medicare to negotiate drug prices.

The Republicans -- whose "plans" have been largely proclamations of better, cheaper healthcare without any strategy -- will be quick to label any of the Democratic plans as a government takeover of healthcare, or socialism.

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