It looks like the Obama administration may be backing off its insistence on a public health plan option in the health care reform bill wending its way through Congress. I’m sorry to hear that because I believe that the inclusion of a government-run plan (like Medicare) is the most effective way to both reduce health care costs and provide adequate insurance to many of the 47 million Americans currently uninsured. And while the option that the administration has signaled it would accept in lieu of a public plan — non-profit cooperatives — isn’t the end of the world, a number of experts point to problems with such cooperatives, the biggest one being their lack of scalability. The few cooperatives that now exist in places like Seattle are relatively small, local affairs, and some question whether they could effectively scale up to compete with private insurers. White House officials raised that concern in The New York Times today, even as they acknowledged that the president might be willing to accept cooperatives in lieu of a public plan.

If this compromise is destined to happen, and I sincerely hope it isn’t, then at the very least, the administration should make darn sure there are rules around how these health cooperatives can operate. As Gooznews noted today, such cooperatives should be required to be nonprofit and their members should be allowed to join a pre-paid group practice where physicians are paid annual salaries, rather than getting reimbursed by fee for service, a far more expensive and wasteful practice. In fact, wouldn’t it be grand if all physicians in the U.S. were on salary, instead of getting paid for the number of tests, procedures and patient visits they conduct? That’s an idea whose time has come and in my opinion, it would come a lot faster if Obama stuck to his guns and insisted on a government-run health plan option.

So for all those of you who want meaningful health care reform, now’s the time to call your elected representatives and tell them what you want, especially if you live in states (like Montana, Kentucky, Missouri and Iowa) dominated by lawmakers who are determined to put the kibosh on a public health plan option.

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