There's been much made over the presence or absence of a public option in whatever healthcare bill finally ends up emerging from Washington.  Proponents regard it as the raison d'être in the battle to reform America's healthcare system, noting that it's a far cry from a true, single-payer system.  Opponents have responded by doing everything from branding it socialist to brandishing guns to drawing Hitler's moustache on Obama.  That's cool.  As a buddy of mine recently remarked, "I used to do that in my middle school textbooks."  Did Hitler ever make tepid overtures to being open to a public option, but not considering it a necessary component of reform?  Maybe I missed that history class.  Must have been busy putting a Hitler moustache on Reagan.

Anyhow, in order to discuss how important the public option really is, we need to define what we're talking about when we use the words.  However, I'm not going to do that.  I'm going to take the incredibly lazy approach of assuming that you know you ass from your elbow and that you understand that it means something like opening up Medicare to all Americans.

See?  That was a lot easier than some dry treatise on the public option.

Moving right along, why is it important?  It goes to the two lynchpins of successful healthcare reform: cost and access.  However, if we look at these two things closely, we can see that they are the same.  After all, in a market-based system cost is synonymous with access.  For instance, I have access to a Learjet in the sense that there is someone out there who is willing to sell me one.  However, I cannot afford to pay the price that this person is asking.  As it is, I remain jetless, a regrettable circumstance that I'm sure you will join me in regretting.

Price, you see, is a rationing mechanism.  I wonder if this revelation will cause those who are wringing their hands over the possibility of rationing to re-evaluate their ideological preference for market-based solutions.  Somehow, I doubt it.

So, the cost of healthcare in America is the prohibiting factor when we look at those who can't get care.  Sure, there are other issues, like too few primary care physicians, but the main prohibiting factor is that people who don't have insurance can't afford it.  In fact, most Americans can't afford to simply buy private health insurance for themselves or their famillies, nor can they afford to simply pay for healthcare out of pocket.

The reality is that cost is simply too high for everyone in America.  We're paying about twice what the rest of the world pays per capita with questionable results.  There are a number of reasons for this, but one of the most important (and most obvious) is the lack of competition in health insurance markets.  This is where the public option is supposed to come in.  The idea is that the public option would provide consumers with an affordable choice in markets that sometimes have as few as two or even one private seller due to the current regime of state-based insurance regulation.

There's been some silliness, like this bit noted by Dean Baker, about the public option ruining markets.  As Baker explains, it's just silliness that doesn't even have internal logical consistence.

So, let's take it as a given that the public option would work as a check on these markets to introduce some much needed competition, forcing them to compete instead of collude, and that this is why it is important to reform - it goes directly to controlling costs.  Is it the only way to accomplish cost control?

The answer is most certainly no.  Notably, countries like the Netherlands and Switzerland have private systems that rank just above and below, respectively, England's single-payer NHS.  However, these systems are tightly regulated, forcing a set of tough rules on private companies.  There are rules that prevent them from excluding people, rules that restrict or completely eliminate profit derived from basic care and rules that fix the price of basic care.

Now, would it be possible to implement this sort of system in the US?  Sure, it's possible, but this is the season of using the yard stick of what is "politically possible", so I'm going to use it.  It might be politically difficult to get the public option passed, but it's almost universally acknowledged that it would act as a check on costs, wingnuts aside.  Could we legislate these checks?  Yes, but how feasible is this?  Given the current climate, I say not very.

I say this because I have not much confidence in the ability of Washington to put sensible checks on private industry.  If anything, contemporary American politics is characterized by rank corruption and inept rule.  Private industry, not the least of which is the healthcare sector, dumps billions into the political system in the form of lobbying expenditures and campaign contributions precisely to make sure that American markets are regulated in a way that directly benefits them.  In fact, if you had to distill an explanation for how we got into this mess in the first place, that would be it.

The financial industry imploded and crippled the global economy last year, at least in part as a result of loosened regulations.  Are there tough new regulations in place to make sure they behave differently in the future?  Nope.  Are executives still raking it in?  Yep.  Did the very firms at the center of the cyclone post record profits after being bailed out?  You bet.

Does the deal that Obama has cut with pharma inspire confidence that government is really going to step in and regulate this industry, which will mean with all certainty that they will see reduced profits?  No, it doesn't.

I've heard some people say that they just don't think a single-payer system could work in America.  Sure, it works elsewhere, but it wouldn't work here.  I don't know know that this is true.  However, the same thing could be said of what's been done in countries like Switzerland.  Maybe that wouldn't work here either.  If it depends on tight-fisted regulation of an industry that comprises one sixth of GDP, then I have my doubts.

Will the public option work?  If you have doubts, just ask yourselves why the insurance industry is so opposed to it.