The public option for medical insurance is an important part of our desired reforms, of course. But at best it's a weak compromise, not single-payer. And the odds are that if it goes ahead, it'll be aimed at a small market share.
But what about looking at a different public option? One with more history in America. Remember the many instances of a public "City Hospital"? Many cities had public hospitals that provided care to all, at no charge. Boston's famous Mayor James Michael Curley made his support of BCH a touchstone of his terms. Today its ghost lives on in Boston Medical Center, a result of a merger with BU Medical School's hospital. Still providing some charity care, but supported by the insurance regime. Others have closed. There are still however some public clinics here and there, providing mostly limited care to the indigent.
The DVA, however, provides a complete medical care system to veterans. Not insurance, but care. The doctors work for the DVA hospitals. So while we're talking about a weak-tea flavor of public insurance, and seniors have public insurance (Medicare), why not let the public at large have something closer to the old tradition?
I suggest that the American health-care delivery system suffers from both a horrible insurance paymnent system and a horrible fee-for-service provision system that encourages high costs. So rather than set up a public insurance system, let's set up a good public delivery system. An American version of the NHS, as a voluntary option.
On the provider side, it would set up shop by acquiring existing hospitals, just as Britain's NHS took over beleaguered hospitals during WW II. How many hospitals routinely have financial trouble and would want a bail-out? They'd still continue to operate largely as they do, not rebuilt from scratch in some kind of uniform model that the right would call "Bolshevik" or something. Just "St. Mary's Hospital, an American Health Care hospital", and "Springfield General Hospital, an American Health Care hospital". Obviously this works best for non-profits, but I could see how in the future some proprietaries might want to sell out...
Doctors (both hospital and clinic based) would be on salary, no fee for service, though possibly compensated for extra hours or effort, and possibly with bonuses for good outcomes (as the NHS pays). The hospitals would be funded at a fixed level per year, not based on services rendered. No bonus for extra MRIs; no penalties for fewer MRIs. They'd be audited like anybody else to be sure that they're following proper professional guidelines. They'd negotiate with vendors as a single powerful bargaining unit for pharmaceutical prices.
People who choose the "public option" would thus need to get their primary care from an in-group provider. These providers would have very low overhead, as there would be no insurance payments to track. All common specialties would be on salary, and subscribers could go to any inside specialist, but if it were necessary to go outside for something not worth handling in-system, it could "outsource" fee-for-service medicine on a case-by-case basis. Yes, this is how HMOs once operated, but they usually ended up doing it for the money, and rarely included hospitals, or had such
widespread coverage.
I don't think that this could go ahead on a national basis without ridiculous push-back, but I'm suggesting that we start talking about it. Given the need to lower the actual cost of the health care system, both on and off budget, this strikes me as the most realistic solution. Insurance systems have their benefits, but they always get gamed by providers. This simply removes them from the equation.
This "public option" would have a fee, either as a surtax or an insurance-like fee, and unlike the NHS, at least some of the cost should not be borne by those choosing private care. But note that in the UK, private insurance and private care still exist, mostly for the high-end market. And the cost is held down, because their customers, like everybody, can still use NHS facilities. That's the extreme case that can push the Overton window in the direction of an optional public health service.