The Great Sell-out.

Posted December 10, 2009

It's Oaklandish -- the great liberal caterwauling about the death of the public option and the claims that Obama has sold out to big insurance and pharma. To humiliate a liberal, film this stuff and replay it in ten years.

If this is a sell-out, count me a buyer. Last night's Senate deal killed Harry Reid's the public option, which deserved to die. It was bad economics and bad politics.

The Congressional Budget Office confirmed that the public option would have covered fewer than 2% of Americans – and would have been more expensive, since subscribers would have been sicker. That Pelosi and Reid let the liberal wing of the Democratic Party become obsessed with the public option was dumb, since the votes were never there to pass it in the Senate. Shame on them both — they took their eyes off of the prize and nearly upset the most important domestic reform in forty years.

Fortunately, Harry Reid ask people who are more sensible than he is to go off and work it out. As a result, Americans went to bed last night with universal health care coverage seemingly within reach. We should get ready to party in our freezing streets — we are on the verge of an absolutely stunning political achievement.

Not only that, but the compromise stuck by five liberal and five moderate Democratic senators last night was in most respects an improvement. The main goal of health care reform has always been to give every citizen access to health coverage. Bonus points for separating it from employment (truly a silly way to give people health care coverage). Last night's compromise goes a long ways towards removing health care from employment (something most employers, especially small ones, don't mind at all). And we could do more. For example, the house bill does not enable people with employer-based coverage to use the public exchanges. Employers and liberals should embrace an amendment offered by Ron Wyden to use the money that their company spends on private benefits to buy coverage from the public exchange if they prefer.

This is the reform that Bill and Hillary could not achieve: near-universal health care coverage, a ban on the use of pre-existing conditions to deny coverage, and a national major medical policy to limit out-of-pocket costs as a percent of income to end health care bankruptcy. On top of this, people can buy into Medicare at age 55.

Liberals should ice the bubbly and get ready to pop the corks — (my friend and former boss, an expert in this field, is surely right when he cautions me to "wait until the morbidly obese lady sings"). Despite the inevitable imperfections of any democratic legislation, this is huge progress that would have been unthinkable in the darkest hours of the Bush era. When we sober up, we should recognize that we kicked the can down the street on cost control — but with so few elected liberals able to grasp the fundamental importance of this problem, this goal has been out of reach from the start.

Oddly, it may be easier to control costs than it has been to win the fight for universal coverage. The cost measures that matter benefit hugely from information technology, best practices clinical technology, and management technology. They may also benefit from improved structure of health care markets, but it is far from clear that Congress can deliver that.

What Congress can do is mandate universal coverage, ban insurance company exclusions, and guarantee that no family will go bankrupt over health care costs. That we have not given ourselves this protection has always made America a savage in the eyes of much of the civilized world. (Note: the following piece reports on Atul Gawande's suggestion that the government can also use the Agricultural Extension Service as a template for testing and learning how to control costs).

This week, Congress took a decisive step towards fixing the problem. It will very likely be the biggest progressive victory in my lifetime. The glum faces in Berkeley are testimony not to bad times, but of the ignorance and blinkered perspective of too many Bay Area activists.