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 Response Page - Dahl & Pechacek  Interview -      

These comments are responses to the questions listed below,
which were generated in regard to the
Steve Dahl / Patrick Pechacek Interview of
10- 01-10.

The Questions:

Today's discussion covers a Civic Caucus meeting with Steve Dahl and Patrick Pechacek, directors, Deloitte Consulting. Under a plan prepared by Deloitte, Minnesota state employees choose health care providers based on four different levels of pricing. The plan produced insurance premium savings to the state of 10 percent in the first year, 2002, and more savings in subsequent years.

For the complete interview summary see:

Response Summary:  Readers have been asked to rate, on a scale of (0) most disagreement, to (5) neutral, to (10) most agreement, the following points discussed by Dahl and Pechacek.   Average response ratings shown below are simply the mean of all readers’ zero-to-ten responses to the ideas proposed and should not be considered an accurate reflection of a scientifically structured poll.

1. Health care prices (8.3 average response)  Quality of health care is not necessarily related to prices charged by providers. Higher quality care might well be offered by providers whose prices are lower than average.

2. Price-sensitive choices (8.0 average response)  Because prices for the same services vary considerably among health care providers in Minnesota, consumers who choose lower-priced providers should pay lower health care premiums.

3. Other public plans (8.5 average response)  Minnesota ought to broaden the use of a tiered system of health care premiums--now limited to state government employees--to other public employees in the state and to others for whom the state pays or provides health care.

4. Private plans (7.6 average response)  Private health care plans ought to offer a tiered system, too.


 Response Distribution:

Disagree Strongly

Disagree Moderately


Agree Moderately

Agree Strongly

Total Responses

1. Health care prices







2. Price-sensitive choices







3. Other public plans







4. Private plans







Individual Responses:

Debby Frenzel  (5)  (7.5)  (10)  (10)

Bruce A. Lundeen  (7.5)  (2.5)  (10)  (5)

1. Health care prices.  Some health care providers may have a pool of participants inclined to suffer from more expensive maladies.

2. Price-sensitive choices.  Consumers informed enough to transfer to lower-priced providers leave programs that could have improved but are left with fewer contributors.

Robert Freeman  (10)  (10)  (10)  (10)

1. Health care prices.  I would argue that is more often the case than not.

2. Price-sensitive choices.  Within reason - accounting for geographic disparity, and quality of providers.

3. Other public plans.  Hard to implement in government programs because the enrollees are responsible for so little of their premium.  An alternative model might offer incentives (e.g. a Target gift card) for choosing providers in the lowest tier.

Ray Ayotte  (10)  (10)  (10)  (10)

Ken Smart  (10)  (10)  (10)  (10)

3. Other public plans.  Long term, the full cost of health insurance should be paid by the employees rather than by the government with a corresponding tax deduction allowed for the cost of such insurance.  But even then, it makes sense for the state to offer a tiered system of health care premiums.

4. Private plans.  Private employees should also pay for their own health insurance with a corresponding tax deduction.  Perhaps this is where the state could partner with businesses and allow businesses access to the same tiered providers at same or similar cost.   Business participation would be voluntary.  There should also be a high deductible, consumer-driven, Health Savings Account (HSA) option made available.

Mike Weber  (10)  (10)  (10)  (10)

1. Health care prices.  Every incentive should be built into preventative care and all providers should be morally responsible for providing quality care rather than quantity services that many times are not needed.

2. Price-sensitive choices.  Health care cost could be immediately reduced if people needing medical service would be required to co-pay for service and be given factual information about actual cost of those services. In the health care bill if they published information about cost versus quality of service there would be a huge cost savings for consumers but of course it would be bucking the bottom line of providers and insurance carriers’ profits.

3. Other public plans.  By broadening it would help every consumer of health care.

Peter Hennessey  (7.5)  (7.5)  (2.5)  (0)

1. Health care prices.  This is just basic economics. Providers charge whatever they think consumers will pay. Consumers must judge if they get the value they expected. Over time, though, poor quality and high priced providers go out of business -- unless they are kept in business by some government-sanctioned monopoly situation, such as single-payer and other stupid schemes being set up in the latest federal health care law.

2. Price-sensitive choices.  There is a lot assumed under this question. Is it really true that you do NOT get what you pay for? Maybe higher quality DOES command a higher price (why is a Toyota more expensive than a Yugo? is there even a Yugo anymore?). Who is to decide? Can the customer willingly pay a higher price for higher quality? Does the insurer or that State have the right to demand higher quality at a lower price (as they do now under Medicare, thereby driving doctors out of the business and thereby denying people the quality service they need)? Do patients really choose a doctor only on the basis of cost? Does the insurer make an effort to seek out and do business with lower cost providers? Do they make sure the quality does not suffer? Do they measure quality the same way the customer does? Do they make an effort to provide this information to the subscribers? Do the subscribers really have a choice? Many plans have "preferred" and "out of plan" rates, with a sickening habit of putting your favorite doctor in the "out of plan" category. And government has this sickening habit of setting up de facto monopolies, by licensing certain insurers but not others, definitely not out-of-state ones. How do you expect to reduce costs if you inhibit competition? Who is a better judge where to reduce costs so as to remain competitive (or stay in business, even), is it the guy running his business, or a government hack who most likely has no business experience at all and most certainly has no personal interest in the success or failure of the business or the satisfaction of the customer?

3. Other public plans.  Whoa, horsey! What the heck is this nonsense about government employees having their own plans? What ever happened to "what's good for the goose is good for the gander"? Maybe if government officials and government employees had the same choices that they prescribe for the rest of us peons, many things would be a whole lot better.  (1.) The State has no business paying for anybody's health care, let alone set up programs open or preferential to some and denied to others.   (2.) The State's only obligation is to prevent crime. Otherwise it must stay out of the free market.

4. Private plans.  To begin with, there should not be a distinction; no "public" or "private" plans. There should only be plans that people can buy into, regardless of their employment status or who their employer is. Government has no business setting up and paying for separate plans for employees (and another one for welfare clients), and employers have no business choosing and paying for plans for their employees (again making unreasonable and unfair distinctions between officers, full time employees and part time employees). Your house, car and other insurance do not depend on whom you work for; why should medical insurance?   As to the details of the plans, let the free market devise whatever scheme works. People are individuals. Their needs vary. Their idea of what it takes to meet those needs vary. Their resources vary. Their preferences vary. There is no "one size fits all," or even "a few sizes fit most." Government has no right to mandate what is in a plan and how a plan should be structured. Government brings no more information, intelligence or good will to the table than any business man trying to set up a viable business, or customers trying to decide if they want to do business with one provider or another. If some people lack the time or intelligence to absorb the required information and make practical choices, then right there is a business opportunity to help them with this for a small fee. There are plenty of examples already in place; Deloitte Consulting is one. Of course the trouble with their services is that when they do it on behalf of the State, not the individual employees, they are in fact imposing choices on employees as a group. What is wrong here is that there is nothing special about health care that should require government interference in the market, except of course the fact that it fulfills the politician's and other power monger's ultimate dream, the power of life and death over the entire population.

Dave Broden  (10)  (10)  (10)  (10)

1. Health care prices.  Cost and Quality must be viewed as independent variables. Far too often services and capabilities make (the) statement that more money is directly proportional to cost. Well thought out analysis suggests the opposite or definitely (that the two are) independent. Focusing on quality and capability first will always find a better way. If focus is on cost a different answer results

2. Price-sensitive choices.  As long as there is a quality criteria. Obviously there has to be an incentive to go with the lower price or higher quality. Incentives will work if value and benefits are linked.

3. Other public plans.  Tiered plans, if well structured, are incentives to management by the individual and also provide strong cost control opportunity. Expanding to all is a wise decision.

4. Private plans.  Many private plans do already in various forms and types of coverage. Again, the use of well-planned incentives that can be easily understood by the consumer and measureable by the user and service provided will definitely add quality and control cost.

W. D. (Bill) Hamm  (0)  (0)  (0)  (0)

1. Health care prices.  If this were true why, would we have "Cadillac Plans" for the rich and upper Middle Class? Why are you so sadly and ignorantly trying to make us believe cheaper health care is better healthcare? This is just a thinly veiled attempt at window dressing on rationed healthcare. You get to pick and choose from the best of the best but we have to pay extra for varying "Quality" healthcare. How stupid do you really think we are?

2. Price-sensitive choices.  Does this mean that we rural folks should spend our day driving halfway across the state to save your ridiculous system $15. This is the kind of efficiency transfer you are talking about. Most of us only have one provider for miles around. Is this part of your plan to further push us off our land?

3. Other public plans.  I strongly suspect this Government Employee group is predominantly metro base where this may actually have some merit because of the variety of options. Applying this logic to a state wide population without careful examination of its effects is derilect.

4. Private plans.  We of the 62% want a healthcare system that meets the following criteria: (1) We want a "Patient Based" proactive wellness based system that is first and foremost concerned with what is in our best (interests) for our health. All other considerations take a back seat. (2) We want a system that protects our healthcare workers from financial harm by participatory "Quality Control" with a built in (patient included) overview system that forces all medical professionals to participate in self-help and self-improvement programs. This effort would be internally controlled. (3) We want a system that does not allow the Insurance Companies to make one red cent of profit off our health ever again. In addition to this, we do not want to ever see any “Public Employee” controlled Socialist style bureaucracy “bloating” costs of any such healthcare system. In short, we have as much loathing for any scheme of Socialistic central control, (Single Payer Healthcare), as we do for Insurance Company greed.  Does such a program exist? The answer is yes it has very successfully since 1962 as a Co-op structure providing healthcare for 17% of what we now pay. I have spoken of this on this site before, a Co-op structure used by the Basque Cooperative Corporations. The fact is “White Collar Public Employees” are only concerned with swelling their ranks at our expense, and the profit-minded Insurance Companies and their agents only see us as a money machine, so we will never hear about any other viable options, and especially not any better ones. What we have now, and what this is, has nothing to do with what we need or what is best for us or for our health. Bean counters who have found a way to create a level of inefficiency beyond belief.

Dennis L. Johnson  (10)  (7.5)  (10)  (10)

1. Health care prices.  Health care plans for state employees should be the same as those for all state residents, at the same available cost tier options. Policies should be written across state lines, and there should be a privately published national "Consumer Reports" magazine, supported by subscriptions, to provide ratings and information regularly for Health Care Consumers about Plans, Hospital care, and other Health Care services.  And roll back Obamacare! 

2. Price-sensitive choices.  Agree but not by regulation but by information provided as above.    And roll back Obamacare!   

3. Other public plans.  Should be extended to the General Public as well so that Unionized employees will not bargain their way to a system more costly and and more desirable than that available to the public.    And roll back Obamacare!

4. Private plans.  See question 3    And roll back Obamacare!

Bob White  (10)  (10)  (10)  (7.5)

Wayne Jennings  (10)  (10)  (10)  (7)

Paul and Ruth Hauge  (9)  (8)  (8)  (8)

Lyall Schwarzkopf  (7)  (9)  (9)  (9)



The Civic Caucus   is a non-partisan, tax-exempt educational organization.   The Core participants include persons of varying political persuasions, reflecting years of leadership in politics and business. Click here  to see a short personal background of each.

   Verne C. Johnson, chair;  David Broden, Charles Clay, Marianne Curry, Bill Frenzel, Paul Gilje,  Jim Hetland,  Marina Lyon, Joe Mansky, John Mooty,  Jim Olson,  and Wayne Popham 

The Civic Caucus, 01-01-2008
8301 Creekside Circle #920,   Bloomington, MN 55437.
Verne C. Johnson, chair, 952-835-4549,       Paul A. Gilje, coordinator, 952-890-5220.

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