Public Plan May Split Hospitals, Docs

Setting up a moderately aggressive public health insurance plan might cut doctors’ revenue 0.5% while increasing hospitals’ revenue 2%.

Researchers at the Lewin Group, Falls Church, Va., have published those estimates and others in an analysis of how setting a new public health insurance system for working-age U.S. residents might affect doctors, hospitals and health insurers.

A team led by John Sheils have assume that the new public plan, which would compete for business with private health insurers, would offer a plan design and benefits similar to those of the plan that covers members of Congress, with $15 co-payments for in-network care and a $250 deductible for out-of-network care.

The researchers assume that the government could set up a broad plan that would be open to all individuals and employers, and a narrow plan that would be open only to individuals, small groups and the self-employed.

The government plan could choose to pay roughly the same rates to doctors and hospitals that Medicare pays, roughly the same rates that private insurers pay, or rates half-way between the Medicare rates and the private insurer rates.

The plan with the most dramatic effect would be a plan open to all individuals and employers that paid Medicare rates, the Lewin researchers predict.