note: The point of developing a "capitalist" argument for the Public Option has only one point - to build greater support for the public option. You don't have to be a capitalist to make the argument. Even if your a very far left wing socialist you can still appreciate the logic of the argument and also support anything that makes the capitalist part of the economy stronger, because any general improvement that lifts overall profits within the capitalist system also lifts the tax base so that the government will have more revenues.
Marx/Engels/Lennin theory has a very technical definition of capitalism but that is not what this thread is about. So for political science purists I am using the cultural and not using the classical definition of capitalism ("an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth")
Cultural Dictionary
capitalism
An economic and political system characterized by a free market for goods and services and private control of production and consumption.
The Public Option Improves the capitalist system in the United States.
Far from being "socialistic" the Public Option will actually bring substantial improvements in competition and the capitalist system in the US.
1) Increased competiton for the consumer. All competition in the capitalist system is not the same. You can have competiton among sub contractors, producers, wholesalers and so on that take place in a way that provides no real advantage to the consumer.
The only competition that ultimately matters is the competition that occurs at the point where the final consumer makes a choice, makes a payment and returns to the market place.
The current system of health care
is a convoluted matrix of associations, almost always made by the employer with no input by the consumer and has virtually no "market mechanism" in it. You cannot establish what health care company delivers a better product (higher recovery from heart attacks or lower rates of diabetes) nor is there any way to compare price. Without a comparison of product and price no market condition exists. Creation of the Health Care Exchange will create a market platform where health insurance companies will be matched up one against another. Given the oligarchy nature of the Health Care Insurers this market will not be competitive without a Public Option to create a basis of care and a comparison of cost.
It is important to emphasize that
Health Insurance Companies (and the Public Option for that matter) in fact provide no direct service for the consumer. Reread the definition of capitalism given above. It is not simply for an increase of business but for private control of CONSUMPTION. Insureres are not involved in consumption. That is provided by doctors, clinics and hospitals. The Public Option will create greater PORTABILITY so that the consumer can enter the real market of actual health providers i.e. doctors, clinics and hospitals. (Single Payer would provide an even greater degree of portability.)
The Public Option increases, not decreases market effectiveness at the point of consumption.
2)Increased Competition for the Consumer will have an impact on innovation.By increasing the portability of the consumer and a more competitive market for the consumer (see above). The competition will switch from being competition between middle man that have nothing to do with the actual health care product and will reward innovation made by doctors, clinics and hospitals.
This is not a small issue. When the US stopped regulating telecommunications in the US and broke up the monopolies it created an unprecedented increase of competition and innovation. While there has been some over consolidation the market has also been brutal in correction. AOL had an absolutely dominant position at one point and is now a relic.
This innovation can be seen in the competition between Sony and Apple. At one time Sony had personal CD players that seemed unchallanged. Apple now produces IPODs and IPhones that will be made in the hundreds of millions. Now personal communication has revolutionized to the point that every cell phone can be a link to the internet, personal messaging, movie production unit and so on.
Now think of Steve Jobs linking up the Mayo Clinic designing a system that allows medical professionals to talk to you and interact with you without a in clinic visit, except when necessary. That type of innovation and revolution in health care is much more possible when the competition is not with paper shufflers in an insurance bureacracy but actual providers competing for consumer dollars.
The Public Option will bring consumers greater market power in interacting with actual health care providers and that will allow for greater market reward for those that are actually providing health care services. (Single Payer would do even more.)
3) Within the business community the Public Option will create a more even playing field Even though the
initial position of the Public Option will be restricted to small businesses and those without insurance,
the effects in the market will not be.Business owners will be able to use the higher performance and lower cost of the Public Option as measuring stick to demand better performance in the employer provided market.
Businesses owners that are not
initially included will eventually demand that they also have the opportunity to take advantage of the higher quality and lower costs of the public option. This will result that within the business community business will not have to worry about competiting on benefit costs but will instead worry about competing on their core business.
Currently all businesses are paying
an invisible tax by over paying for their health care insurance. Creating a more competitive market for businesses to purchase health care will have the exact same benefit as a tax break from the federal government. If health insurance providers had to compete with a robust Public Option the lower costs would ripple across the economy in the same way as a general tax reduction would. Private coporations do not automatically equate with capitalism.
Private companies have an incentive to increase profits, they do not have an inherent incentive to perfect the market mechanism.
The Public Option does three important things that help make the market mechanism more effective in the delivery of health care that actually strengthen the capitalist sysem.
1) It increases consumer power. The purchase of health care will start moving from fixed employer based associations to consumers controlling their health care dollars.
2) By decreasing the significance of the middle man and giving more power to the consumer/doctor relationship it aligns the market away from institutional relationships to consumer purchases, this has always resulted - sometimes dramatically - on innovation of the actual services provided with higher quality and lower costs.
3) The Public Option will have a profound effect on the health insurance market outside of those that will initially be able to purchase it. Businesses will use it as a guide in negotiating for lower costs and higher consumer satisfaction with their current health insurance provider.
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