Report: Public health plan would lower physician payments

The creation of a public health insurance plan “that competes on a level playing field with private insurance plans in an exchange”—a model put forth in the health plans of President Barack Obama and Sen. Finance Chairman Max Baucus (D-Mont.)—would help rein in health care costs, in part by reducing physician reimbursements, according to a new report from the progressive think tank Institute for America’s Future (IAF).


The IAF report contains these findings:

• Medicare has controlled health care costs much better than have private health insurers over the last 25 years.

• The private insurance market is highly consolidated and needs competition from a public health insurance plan to lower skyrocketing premiums.

• Administrative costs are dramatically lower under public health insurance plans, resulting in enormous savings to the system.

• The bargaining power of public health insurance plans significantly reduces provider costs.

• In a head-to-head competition, the public Medicare plan is much better at containing costs than private Medicare Advantage plans.

• Independent analyses show substantial savings can be achieved from a public health insurance plan that competes with private insurance plans.

• Quality and effectiveness innovations occurring under the public Medicare plan show that public health insurance plans have greater potential to drive the quality revolution than do private plans.

• Public health insurance plans increase choice, competition and accountability.


Click here for the Press Release (


(SOURCES: The Advisory Board Daily Briefing,, February 9, 2009; The Institute for America’s Future,, accessed February 16, 2009)