The Public Option Sideshow

03/18/2010 05:12 am ET | Updated May 25, 2011

The public option has taken on a mythical status. For many people, health care reform will be deemed a failure if the President signs legislation without a public option. That's problematic.

The public option was never a coherent, well-defined policy tool. Instead, it was an amorphous concept that stood as a symbol of reform and as a perceived antidote to the greed and callousness of the insurance industry. However, deputizing the public option as a health care reform litmus test ignores the other policy-changes that need to be enacted for health care reform to succeed. Right now, health care reform in the US needs substance, not symbolism. A robust public option is important, but it is not the only ingredient necessary for health care reform to succeed.

It's understandable why the public option has become the focal point of health care reform. The health care reform bill that came out of the House was 2,074 pages long! A public option is an easy reference for anyone who doesn't have three spare days to read the bill in full. A public option is easy to identify, it has a nifty title and it's intuitively likable. And, the public option was a gesture of good faith from policy-makers that paid homage to those who wanted a single-payer system like the British National Health Service.

The problem with elevating the public option to mythic proportions is that we are putting stock in a symbolic policy that never had a stable definition or a clear purpose. A public option became everything to everyone. At various points in the last year, the public option ranged from being defined as a choice of Medicare for all, to a non-profit insurer that was steered by the health secretary, to limited government run insurance plans that were to be run by each state.

Commentators highlighted polling that said that the majority of Americans favored a public option, but the polls never defined what the public option that they were referring to actually was. Because politicians knew having a public option was important to voters, they sought out ways that they could honestly say they had a public option in their bill, even if it meant overlooking other necessary aspects of reform. As a result, we got watered down public options, we got talk of triggers, we got state opt outs and we haven't seen enough progress on the issues that matter like reforming the way health care is delivered, making the insurance industry more competitive and putting in place tough regulations on insurers.

In health care reform, there are a number of ways to achieve the same goals. The public option was touted a vehicle increase competition, but we forgot that another way to do it was to repeal the 1945 McCarran-Ferguson Act that provides federal antitrust exemption for insurance companies. The public option was talked about as a tool to reduce costs. However, another (and a possibly more effective) way to reduce costs is to create a tax on high-cost insurance plans and to establish a non-political body that sets Medicare reimbursement prices. The public option was supposed to be a way to guarantee access for everyone to some form of insurance, but another option for guaranteeing access is to ban insurance companies from denying coverage based on pre-existing conditions, mandating insurance coverage for every American and regulating the insurance market much more heavily like they do in Switzerland and the Netherlands (including regulating prices for medical procedures). Finally, perhaps the most effective way to improve health care in the US is by changing the incentives in the system from providing more care to providing better care and promoting preventive medicine. A watered down public option would be a symbolic victory, but it wouldn't prompt the kind of changes we need.

Health care reform is too important to fail. We need health care reform for the tens of millions of Americans who are uninsured, for the hundreds of millions of Americans who have seen their insurance premiums go up while their incomes have gone down and for the plethora of others who need better access to high quality, safe medical care. Finally, we need health care reform for the larger economy. Commentators have said that President Obama should focus on the economy, not health care, but, in reality, health care is the economy. We need health care reform to get the budget back in order, to allow Americans to have the freedom to change jobs and so that insurance premiums don't continue to eat a higher proportion of wages year after year.

Right now, we've got a choice to make. We're coming down to the wire on passing health care reform and unfortunately, policy-making means compromise. The questions we need to be asking ourselves in the policy push for the goal line are: 1) whether getting a public option is a symbolic victory or is instead vital to health care reform?; 2) what constitutes successful health care reform?; and 3) if achieving moderate, but significant progress reforming the US health care system trumps going down in flames in the name of crafting the perfect piece of legislation? In my opinion, the perfect can't be the enemy of the good.