Our Existing Public Option

Why is it universally accepted that we provide all our citizens a college education but "socialist" to universally provide health care? Why hasn't UMass, the "public option," driven its immediate neighbors Amherst and Hampshire out of business with its lower tuition?

Before abandoning the notion of a "public option" in health, can we at least look at public higher education, the closest possible analogy to the original Obama health plan?

In most of Europe, Canada, and Oceana, higher education (with a few notable exceptions, mostly business schools) is closely analogous to a single-pay health system. Institutions like the Sorbonne, Oxford, Cambridge, Trinity, and McGill were subsumed into the public system where they have low (if any) tuition and a merit-based admission system.

In America, private institutions remained private, even those (like Cornell, Stanford, and RPI) that were founded on the "service" model of our public universities.

Although we think of our public universities today as belonging to the states, they were actually the result of federal action. The Morrill Act of 1862, otherwise known as the "Land Grant College Act," provided for the sale of federal land in order to fund state universities. Fifteen years later, the Hatch Act provided federal money to fund state-university agricultural experimental stations.

Just as the Democratic health plan is the result of a perceived urgent need, so the federal government's creation of state universities was a response to a crisis -- in that case, the need for education to fund the country's agricultural and industrial expansion.

Unlike what later happened in most of the rest of the industrialized world, private universities remained private, with their governance and fee structure intact. Over the course of a century, the two systems, for better or worse, actually began to resemble each other more: certain public universities (Ann Arbor, Berkeley, UCLA, Chapel Hill) became elite institutions; many private universities became practically oriented.

Yet even the presence of extremely elite public universities did not drive private ones out of business, despite a radical difference in tuition.

The reason is simple and resonates with what should happen if the public option were adopted: private universities provided benefits that public universities did not. Some (Harvard and Yale being the most obvious examples) conferred a prestigious pedigree along with the degree. Others offered small classes and/or campuses. Others touted more individualized attention while some provided a religious-based education that is barred at public schools.

Having found that they could successfully compete for students, private and public universities settled into such comfortable cohabitation that they could actually collaborate. (Indeed, the public and private schools centered around Amherst all tout their interconnection as a selling point.)

In health today, the need for a public option is at least as great as the need for public universities in the latter part of the 19th century. And the potential for the survival of private insurance is also fairly great -- if private insurers are willing to innovate and provide a service that the public plan does not.

This is, of course, the rub; the reason private insurance companies are spending millions to defeat the public option. Private insurance companies don't want to be good capitalists and innovate. They fear competition because they are in a position where they don't need to provide a better service.

There are plenty of roles that private insurance could play. As in Great Britain, they could sell supplemental insurance, capitalizing on precisely the limitations of a public plan they currently criticize. Or they could offer plans with a broader pharmacology than a public plan might offer. They might be willing to pay for services that fall outside the public plan's purview.

But to do this, they would have to give up their current business plan: rather than denying coverage at every opportunity, they would have to find ways of providing more or better or different coverage, just as private universities did.

No analogy is precisely congruent. Most private universities are not-for-profit institutions while insurance companies are not. That does not mean, of course, that private plans could not be competitive in a blended market. Private insurers would prefer to deny coverage to anyone with a pre-existing condition, but faced with tax breaks, they are more than happy to include everyone in a union or employer-based plan. They still make money (as do those supplemental British plans, which wouldn't exist if they weren't profitable).

Even those of us who prefer a single-pay option have to admit that the public/private higher education system in the United States works pretty damn well.

Before we abandon the public option, let's remember that.

The public university system was built by the federal government in the best civic spirit. The same spirit can transform the country with a public/private health system as transformative and essential as public higher education.

Comments

[Rog49Thomas]

I have worked in business my entire adult career.

The only businessmen I have met who have been in favor of competition are those in a weak position, just starting out.

Once they have an element of success, they want to stifle competition, erect barriers to entry, and protect their profits.

After all as the Profit Adam Smith preached when there is free and vigorous competition, profits will be eroded.

He also wisely said "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."

[DesertDogAlpha]

The premise that health insurers are under no pressure to do better holds no water. When health care costs go up faster than inflation and corporate revenues, in due course the only reason a company would exist is to provide health care to its employees (indeed, this is pretty much what happened to the dumb GM and the UAW). Corporations place immense pressure on health insurers to drive costs down and this is why we have PPOs and HMOs now when they didn't exisit to any great extent 25 years ago.

So how do we pay for this new reform without increasing the deficit (oh, and as long as we're at it, how do we get social security and Medicaid on a sustainable financial footing)? When we can't, after 30 years of knowing we have a hell of problem, get the pols to fix the existing programs what comfort should we have that they'll ever have new health entitlement programs on a realistic basis?

If you favor health reform on the basis that only a few of your fellow Americans (the hated rich) will pay for it all, then you really don't favor it at all. If you are prepared yourself to pay an extra $5000 per year in taxes to help out then you might be serious.

[fittovote]

Rep. Anthony Weiner of NY framed the whole health insurance issue quite simply... “We know that insurance companies rely on a formula to provide as little health care as possible for each dollar they take in. This isn't because they are uncaring. It is because they are good business people.”

I want a CHOICE! I want more of my health insurance dollars to cover my health care costs rather than paying for insurance company profits, executive compensation in the millions, insurance company advertising and insurance company lobbying ($1.5 million every day!). None of those things benefit my health in any way! When 1/3 of all health insurance premiums cover those non-health-care costs, that is not only wasteful; it is, I believe, immoral.

So just let me take my $5k in personal health insurance premiums and pay those instead to to a single payer system like medicare. It's not an extra tax, it's just allowing me a CHOICE of who I want to pay it to! And, by the way, it would likely be much less than $5k because I would no longer be paying for all of those non-health-care extraneous costs!

If you want to keep paying your insurance premiums to private companies whose purpose is not your well being, but rather profit, then that it is your choice. But GIVE ME MY CHOICE!

[dugswood]

If the insurance companies are spending $1.5 million a day to thwart health care reform that equates to $45 million a month. So after 4 months that would be $180 million. Couldn't that money be spent on actual health care? They are wasting money to protect profits.

[DestinationsUnknown]

THE HYPOCRICY is astounding!

Or is it just plain old ignorance?

Monday Gene Taylor D-MS at TOWN HALL- on C Span

A Blue Dog- states the ONLY WIND INSURANCE in the state of MS is GOVERNEMNT RUN INSURANCE!

All other insurance companies left state. (So much for Public Option KILLING the INDUSTRY)

If another catastrophe with wind damage occurs in their state without insurance - the Federal Government their state would be bankrupted immediately.

This is unbelievable! I guess that government takeover is ok!

All anti-HC Reform- many seniors complain about all the fraud reported and nothing done- But- they are all ANTI HC REFORM!

8 yrs of Bush- DOJ IGNORED! 8 yrs!

One person brought it up and stated the last 6 months...

Please!! Yes I am sure TRILLIONS of DOLALRS of FRAUD all happened under Obama-
Rick Scott ripped a lot of Mississippians back in the 90's!

THURSDAY, JUNE 26, 2003; WWW.USDOJ.GOV;
HCA Inc. (formerly known as Columbia/HCA and HCA - The Healthcare Company)
LARGEST HEALTH CARE FRAUD CASE IN U.S. HISTORY
Note: Hospital Corporation of America (HCA) was acquired by Columbia in 1994.

Richard Scott, "the former chief executive of HCA Inc," had formed the non-profit organization Conservatives for Patients' Rights

I guess their home insurance is ok with the only option- A PUBLIC OTION- but not HEALTHCARE!

"The ONLY WIND INSURANCE in the state of MS is GOVERNEMNT RUN INSURANCE!"

[quietfortoolong2]

It's only OK for the gov't to do it if the private sector wants no part in it because they would loose their shirts. Otherwise, it's socialism. Look at flood insurance. In many parts of the country, the gov't is the only available source of flood insurance, again, because the private sector thinks it's too risky.

But when you have a system where you can sell people insurance at exorbitant rates and then deny any claim when they try to actually use the product they've paid for, and you're also free to deny selling that product to anyone for any reason thereby reducing risk, the private sector is all over that.

The ideal insurance business model is one where the house never has to pay out. Stack the deck in favor of the house, do a lot of lying and cheating, and you have today's health insurance industry.

[DestinationsUnknown]

Funny – Monday Gene Taylor D-MS at TOWN HALL- on C Span

A Blue Dog- states the ONLY WIND INSURANCE in the state of MS is GOVERNEMNT RUN INSURANCE!

All other insurance companies left state. (So much for Public Option KILLING the INDUSTRY)

THE HYPOCRICY is astounding!

Or is it just plain old ignorance?

If another catastrophe with wind damage occurs in their state without insurance - the Federal Government their state would be bankrupted immediately.

This is unbelievable! I guess that government takeover is ok!

All anti-HC Reform- many seniors complain about all the fraud reported and nothing done- But- they are all ANTI HC REFORM!

8 yrs of Bush- DOJ IGNORED! 8 yrs!

One person brought it up and stated the last 6 months...

Please!! Yes I am sure TRILLIONS of DOLALRS of FRAUD all happened under Obama-
Rick Scott ripped a lot of Mississippians back in the 90's!

THURSDAY, JUNE 26, 2003; WWW.USDOJ.GOV;
HCA Inc. (formerly known as Columbia/HCA and HCA - The Healthcare Company)
LARGEST HEALTH CARE FRAUD CASE IN U.S. HISTORY
Note: Hospital Corporation of America (HCA) was acquired by Columbia in 1994.

Richard Scott, "the former chief executive of HCA Inc," had formed the non-profit organization Conservatives for Patients' Rights

I guess their home insurance is ok with the only option- A PUBLIC OTION- but not HEALTHCARE!

"The ONLY WIND INSURANCE in the state of MS is GOVERNEMNT RUN INSURANCE!"

[ProgressiveVoice]

Don't be ridiculous! You make far too much sense for anyone in a position to take action to listen.

Why is it government rarely sees the obvious? Years ago I worked on campus at a state university. It didn't take long before I noticed that, in every situation that required a decision or a policy change, if an action made sense, it was what they would NOT choose. It was almost as if they went out of their way to not choose a solution that made sense. I subsequently realized it was not just the university, but the entire state government. I don't see it confined to the one state either.