Much of the debate about health care reform has centered on whether or not to have a public option. Simultaneously some are arguing that it would be very inefficient, but at the same time be cheap enough to put private insurance companies out of business. On the face of it that seems absurd, but one reasonable objection I've heard is that a government system would be subsidized in a way that would give it an unfair advantage. Another expressed concern is that a public option's sheer size would give it bargaining clout to negotiate lower drug prices. I don't feel that's a valid objection as not only is that a good thing, but also private companies could in theory band together in their purchasing. I believe that the public option should be a non-profit business set up by the government, but then run as a separate entity. Its charter would direct its policies, but it would not have the onerous requirements of being a government agency. It should be allowed to fail if it performed badly, although initially it would require some public investment to become established. To further reduce the temptation for it to be bailed out and to add more competition, in theory multiple non-profits could be set up although that should probably be considered only after the first one was successfully in operation. I am developing a system for blending public and private activities in general and will post about it once it's more fleshed out.
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