'Public Option' or Co-Op? Experts Sound Off

"The abject, 50-year failure of the private sector to contain costs and broaden the base of those covered has been so obvious, complete and certain for a half-century, that a 'reformed' system without a public option is almost certain to continue that failure," said Duncan.

But not all doctors agreed that Americans would lose out if the White House dropped the public insurance plan option.

"The public plan, I fear, has come to be viewed as a gimmick, one that would save money by paying lower prices to doctors and hospitals. Doctors and hospitals don't want that, and private insurers agree with them," said Alan Sager, professor of Health Policy and Management at the Boston University School of Public Health.

"The public plan in the House bill is already too weak to have much effect on costs, since it isn't an option for most of the privately insured population," said Joe White, the Luxenberg Family Professor of Public Policy at Case Western Reserve University.

Alternatively, White said an "all-payer rate-setting would provide savings for all the employer-sponsored insurance, so would have much greater immediate effects."

Yet doctors and public health experts also saw the potential loss of a public health insurance plan as a gain for health insurers more than anything else.

"Nobody will benefit from dropping the public option except for health insurance companies," said Blumenthal. "The fact that the public option is now on the chopping block is not a reflection of public opinion -- it is a reflection of the power of health insurance lobbyists."

Others say the public option for health insurance had so little potential to begin with that by dropping it, the nation would not really lose anything at all.

"Nothing will be lost. The public option would have been a nightmare to design and administer," said David Dranove, the Walter McNerney Distinguished Professor of Health Industry Management at Northwestern University.

Dranove, however, wasn't a fan of the alternative co-ops either. According to Dranove, state experiments with non-profit co-ops that would have been a testing ground for a federal option have failed to get off the ground.

"Every state has tried to run something akin to a nonprofit co-op, albeit usually with an emphasis on serving small business or high risk enrollees. Total enrollments nationwide are about 200,000,"said Dranove. "Enough said about their success."

What Is a Co-Op?

Essentially, a nonprofit insurance co-op is a company owned by its members -- the same people who are insured by the company.

Whereas private insurers must answer to the investors who own stock in the company whether the investors get their health insurance from the private company or not, a nonprofit co-op answers its members.

Few details have emerged about the nonprofit co-ops discussed in the Senate Finance Committee, but it is generally assumed that the government would spend the money to get the co-ops started and then turn them over to the members.

But for many doctors waiting to hear the end result of reform discussions, the devil is in the details.

"It's somewhat difficult to comment on the specifics of the 'co-op' option until we see the details. A critical issue will be whether the co-ops will be nationally based, state-based, or both," said Dr. Tim Carey, at the University of North Carolina in Chapel Hill.

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