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Although the national debate over health-care reform has only just begun, the first battle lines are being drawn over whether there should be a Medicare-like “public” insurance plan to compete with private insurers in a restructured market.

The public plan has already become a political litmus test for the Democratic left, which sees it as the only antidote to a private market that can’t be trusted to deliver quality, affordable health care, and for the Republican right, which sees it as the Trojan horse for a government-run health-care system that will raise taxes and ration care.

The first thing to note is that this is hardly the most important issue in health-care reform. It is possible to design a system that could control costs, improve quality and increase access to care without giving everyone the chance to sign up for a government-run health-insurance plan modeled after Medicare. It’s also possible to design a system that includes a public option.

The other thing to note is that if by “public option” you mean the current Medicare fee-for-service plan — a plan that makes no attempt to manage and coordinate care and pay for that care on the basis of the quality of the outcome — then a public option would be an awful idea and move the system in exactly the wrong direction.

This is not to say that a well-designed public insurance option couldn’t become the model that private competitors would be forced to emulate. It could.

One thing we know about private health plans is that they spend anywhere from 12 to 30 percent of what they take in on non-medical costs: marketing, taxes, reserves, underwriting and profit. In Medicare, these “administrative expenses” run about 5 percent.

That doesn’t mean that a public plan for the non-elderly would have the same cost advantage. Unlike Medicare, a new public plan hoping to attract paying customers would have to spend some amount on marketing. And like any insurer, it would probably want to invest in systems and medical staff to discourage doctors and hospitals from ordering up unnecessary tests and procedures. At the same time, under most reform scenarios, private insurers would be able to reduce administrative costs by eliminating their considerable underwriting expenses.

Bottom line: The administrative-cost advantage of a public insurance plan wouldn’t be as big as Medicare’s, but it could still be large enough to help drive down premiums in a competitive insurance market.

The better argument for a public option is that it could provide some serious pricing discipline for a market that suffers from runaway medical costs.

Rapid consolidation has given big hospital chains so much market power that they can effectively dictate prices even to the largest insurers, which know that they cannot compete for subscribers if they don’t have the major hospitals in their networks. And in a similar fashion, pharmaceutical companies can virtually dictate prices to insurers for patented drugs if they are the most effective means of treating a particular ailment.

But while hospitals and drug companies often have more negotiating leverage than insurers, it is also true that insurers don’t go out of their way to compete on the basis of price. The market in most regions is dominated by two or three big players that have learned they are better off raising prices in tandem than getting into price wars from which only the customers emerge as winners. Rather than compete on price, insurers compete to attract the healthiest patients.

That’s why advocates of a public option believe a government insurance plan is needed to bring more robust price competition to the market, using its size to extract lower prices from providers and passing those savings on to consumers. Medicare already effectively dictates the prices it is willing to pay to doctors and hospitals, and there are very few providers who choose to opt out of the system. A public insurance plan for the non-elderly could simply piggyback on those lower Medicare prices.

The problem with this arrangement is that Medicare is so powerful that it can get away with paying only 80 to 85 percent of actual costs, forcing doctors and hospitals to overcharge private insurers to make up the difference. Private insurers fear that if they were forced to compete against a public plan with that kind of cost disadvantage, they would be driven out of the market. And doctors and hospitals warn that, without private insurers to overcharge, they’ll wind up out of business, as well.

Uwe Reinhardt, a Princeton University economist, has a simple fix for this screwy pricing system. Reinhardt suggests that, once a year, each hospital or physicians group come up with a list of prices for individual procedures, or bundles of services, that it is willing to offer to any and all insurers, regardless of size. After reviewing the offers, Medicare and private insurers can then announce what price they are willing to pay and give providers one last chance to adjust their offers accordingly. After that, everyone would be free to do business with whomever they choose on the basis of the posted bids.

There is, of course, a name for such an arrangement. It’s called a free market — in this case a market open to multiple buyers and sellers with regular bidding and transparent pricing. More to the point, it is a market that would work whether there was a public insurance option or not.

Like it or not, fixing our overpriced, under-performing health system will require substantial new government involvement in the markets for health insurance and medical care. Beyond that, however, there remains plenty of room for healthy debate on what form that government involvement should take.

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This just in from Pocatello, Idaho, one of the places in which I grew up, and where I graduated from Pocatello High School, or “Poky,” as we called it.

It seems Jeb Harrison, who teaches history and economics is now selling space on every test, handout and worksheet that readsMOLTO’S PIZZA 14″ 1 TOPPING JUST $5 in bright red, inch-high letters printed along the bottom of every page. This is, indeed, a practical lesson in economics.

Maybe some people have heard of this in-school advertising happening elsewhere, because it’s becoming common. I thought it was amusing as well, but to read about it taking place at my alma mater was almost too much.

School officials were reportedly not wild about the idea — and it may even violate a few rules — but Pocatello High School Principal Don Cotant relented.

The 12,000-student school district is looking at a shortfall of up to $10 million next year because of expected cuts in state funding. A tax increase was voted down last month, and school officials have frozen spending on field trips, teacher training and basic supplies such as paper.

It doesn’t surprise me that a tax increase was voted down. Even as a kid one could see Pocatello voters didn’t give a darn about educating students, despite talk to the contrary.

In some ways, Pocatello is similar to Woodland, albeit there’s no university here — and by here, Imean in Woodland itself. (I know we have a university in Davis, but that’s Davis). There are a lot of farmers in both Pocatello and Woodland. The difference is that here, farmers I have met recognize the need for education. Many younger growers even have advanced degrees in agriculture and economics.

I’ll hand it to Harrison. I wish we would have come up with the idea in the 1970s, when I was at Poky. We needed the money. We were always out selling magazine subscriptions, cookies, or something to raise funds for programs. It was a drag.

If we could have sold ads over the slides on our trombones in the marching band it might have paid for our uniforms, which also could have been leased out with advertising on the fronts and backs. In place of the white plumes extending from our red caps, here could have been flags flying for “Jack in the Box.”

Our debate team always needed money as well. I gladly would have worn a T-shirt advertising “Buddy’s Bar &Grill” when debating. “Buddy’s” was a great place to go for pizza and beer. Wait, was that in high school, or college? I’ll have to check my ID from that time to see if it was fake. That might explain why I had trouble in some classes.

Of course the Bannock Indian Tribe offered low-cost cigarettes and other tobacco products, then as it does today. So the “Smoke Shop” could have helped sponsor space as well. Maybe it can do so today. Hey, don’t knock the idea. If Pocatello is going to vote down a tax to fund schools, then tobacco advertising should be fair game.

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by Trey Granger

This story is part of Earth911’s “Green Eight” series, where we showcase eight ways to green your life in various areas.

Regardless of economic conditions, travel during November and December increases, often up to 23 percent during the Christmas and New Year’s breaks. Whether you’re visiting friends and family by plane, train or automobile, here’s eight ways to travel green this holiday season:

1. Ride the Rails . . . and Bus Routes

Wondering what’s the greenest form of travel? Actually, traveling by bus or train consumes the least amount of carbon per passenger. In the winter, travel by other means is subject to road closures and weather delays. Plus, trains and buses will usually drop you downtown for easier access to the city you’re visiting.

2. Enjoy Paperless Travel

No matter how you decide to travel, there is potential for lots of paper use. You’ve got tickets and boarding passes, baggage claim receipts and even directions to your lodging. But in this technological age, is all this paper necessary?

• Wait to print boarding passes at the airport, where less paper is used (and refuse the “ticket jacket” if offered).
• Enter important addresses into a portable GPS unit to take on your travel, so you won’t need to print directions.
• Ask if travel receipts can be emailed to you instead of printed (except luggage, of course).

3. Prepare Your Car

If you’re one of the 91 percent of people who opt for the holiday road trip, pre-trip car maintenance can optimize your gas mileage. This includes checking your motor oil and tire pressure, as well as removing unnecessary baggage that will weigh down your car. A 15-minute car preparation can help prevent a two-hour car breakdown in cold weather and more money spent on gas.

4. Reduce Airplane Waste

Think about how much waste you go through on an average flight. There’s peanut and food wrappers, aluminum soda and beer cans, disposable headphones, newspapers and magazines and the aforementioned paper travel documents. Other than the headphones and wrappers, it can all be recycled, and chances are your airport has recycling bins.

Keep this in mind before the flight attendant comes around asking for your trash. You can also bring your own headphones and packed lunch, or tuck your newspaper into the seat in front of you for the next passenger to read.

5. Monitor the Thermostat

News flash: winter weather is cold! Since you’re not footing the energy bill on vacation, it’s tempting to turn up the heat at a hotel or a friend’s house (which your buddy probably won’t appreciate). But over a year, two degrees of temperature increase equals 2,000 pounds of carbon dioxide emissions. Consider a reasonable room temperature and request an extra blanket for your bed if you need it.

6. Recycle in Your Hotel

You would think that spending $3.00 for a soda at the hotel mini-bar would entitle you to a recycling bin for the can or bottle. Since this is unlikely, bring along a separate bag for recyclables (paper, metal, plastic) that you’re bound to use in the hotel room. Then use Earth911 to find nearby recycling locations on-the-go, or ask the hotel to recycle them for you when you check out.

7. Refill Travel Containers

Security measures and space requirements may have you traveling with compact containers for shampoo, toothpaste and other toiletries. Instead of continually buying new travel sizes at the store, refill the same compacts from a larger container prior to travel. For most liquids this can be accomplished with a funnel, and you’ll also save money by buying larger sizes.

8. Shop and Ship Online

You’re likely exchanging gifts at your holiday destination, so travel raises the important issue of how the gifts will arrive. Packing them in the car will reduce your gas mileage, and packing them in your checked luggage reduces space for clothes. Plus, if you use an extra bag, that will probably cost extra with your airline. If you decide to shop at your destination, you’ll likely face last-minute lines, higher prices and limited availability.

Shopping online lets you avoid much of this hassle, and believe it or not retailers have adapted some pretty good green shipping ideas. Plus, if your flight gets grounded because of snow, little Timmy will still get to open that bicycle on Christmas morning.

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