More insurance reform responses

My father-in-law sent me an interesting blog post about health care reform, written from the perspective of someone at a small non-profit hospital in the Ozarks:
http://ochhealthcarereform.blogspot.com/2009/10/reform-letter-to-editor.html

Anyhow, he seems to have 3 main points:

• The much maligned public option is ironically exactly how the biggest for profit insurance agencies started out,
• government run health care (in the form of medicare) pays more than the big for profit insurance companies, and
  
• the government actually pays bills in a timely fashion, whereas the hospital in question has to get its employees to chase down the payments from the insurance company.

The first point is a misunderstanding of the public option, I believe. Creating a number of non-profit insurance companies to provide low cost insurance to the uninsured who cannot afford regular coverage was a separate proposal from the public option, at least according to the health care reporters from NPR. It is a proposal that made sense to me, but it was rejected by some Democrats and so didn't make it into the bill. I think the writer's point of view is also discredited by the number of people interviewed on NPR (in the talk shows and on the news shows) who say that the public option was the best way to get to a single-payer government-run system.

The second point is disputed in the comments, where a commentor from the Northwest says that insurance companies pay above 80% of costs, while Medicare pays 50%. This is what is frustrating about the insurance debate to me---I simply do not have the ability to judge between the two competing claims. Based on this, I'll go with what is "common knowledge," taking the author's viewpoint into consideration.

Finally, he says that the insurance companies do not actually want to pay the bills. I have some experience with this and agree. But on the other hand, Medicare paying the bills right away isn't necessarily a great thing. Peter Orszag testified this spring that Medicare's costs could be cut by 30% without cutting benefits because Medicare is so filled with "waste, fraud and abuse." Presidents have been trying for years to get rid of the unnecessary spending without much success. Also, Medicare is due to go bankrupt in just a few years---this does not fill me with trust in a government run health insurance option.

I think his main point is correct, though---he is afraid this will just be a way to get government money to the health care companies. Like the drug benefit before it, this plan seems to try to fix the problem of access but not of cost, using taxpayer money.

One other part of his post interested me, and that is the idea that his hospital is trying to do the right thing towards people in need, without any rewards from the government or financial rewards. The reason this whole reform is so hard is that the people who are trying just to do the right thing are not the people in charge of the bill and the debate.

Correction: The hospital is a for profit hospital----they just haven't made much of a profit.