Going Public

The raw numbers are that Americans support a public option to compete with for-profit insurers and keep them honest, so they have to compete on price and quality instead of deny care to their consumers to make a bigger profit than the insurer next door. The poll was done in ways harmful to the public option, with negative messaging, and it didn't matter:

The poll was conducted by Lake Research Partners and it tests reactions to the public insurance option seven ways to Sunday. It asks whether the public insurance option "will have an unfair competitive advantage over private insurance because the government will set rules that favor the public plan" and suggests that "a new public health insurance plan will reimburse doctors and hospitals at much lower rates, causing many doctors and hospitals to shift higher costs onto people who buy private health insurance." It dangles that "a public health insurance plan will be another big, government bureaucracy that will increase costs to taxpayers" and warns that it might "force people into lower quality care including long waiting times and rationing of care."

It doesn't matter. In case after case after case, the public insurance option retains majority support. And the reason why probably comes in another question from the same poll. Lake Research asked "do you favor or oppose providing access to affordable, quality health care for all Americans even if it means a major role for the federal government?" The preference for federal involvement was overwhelming.

I think the answer to this is that Americans have in general lost faith in all current institutions, and are willing to believe in some new institutions, at least temporarily. The other issue is that the broken health care system cannot be hidden away. We spend more and get less, and all of us are either personally affected by that or know someone who is. So when Barack Obama says that the system has become unsustainable and needs a full overhaul, people believe him because it fits with their experience.

None of this means that Obama's answers on health care are all correct - why the hell is he talking about veterans buying private insurance to cover injuries suffered on the battlefield? - or even that the public option will survive a contentious sausage-making process, or even accomplish the goal of keeping private insurance honest in the form it comes out. The policymakers seem so concerned about it "crowding out" private insurance that they are determined to neuter its effectiveness entirely:

The centrist New America Foundation has a paper out today explaining exactly what that level playing field would look like, And, in practice, it doesn't seem too hard. The key is cleaving the public insurance option from Medicare. If the public plan can use Medicare's market share and payment rates, then it can easily overwhelm private insurers. If it's barred from acting as a quasi-national health plan, then it's just another insurance plan being run by government bureaucrats instead of insurance company bureaucrats and freed from the profit motive.

In practice, this report will probably be used by folks on the Left to trumpet the fact that the public insurance option can be run on a level playing field. And indeed, it can. But those who wanted to see the public insurer act as a soft single-payer system -- where the benefits of massive market share are used to aggressively bargain down costs -- won't be too pleased. The reason that government-run systems arguably work better is that they use monopsony bargaining power to control costs. Take that away, and the public insurance option becomes a lot of fury over what amounts to one more non-profit insurance option.

That is a public option in name only, which won't bring down costs, won't rein in insurers, and won't really do anything. Which is why it's the most likely scenario in the Congress.