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Hagan (sort of) stakes out a position

It is great that Sen. Kay Hagan addressed the Health [1] Care for America Now! rally in Washington, DC yesterday. There were rumblings that she wouldn’t show.

Since a major push for HCAN, and many health advocates, is the creation of a public health insurance option that works much like Medicare, Hagan had to address the issue. So far she has mostly avoided talking about the public option.

It turns out that she’s not crazy about the idea. According [2] to the News and Observer she said:

I support having a backstop option for people without access to affordable coverage … Some people would like that to be a public plan, while others have proposed having private, non-profit co-ops.

Hagan, apparently, wants a “balance between the two ideas.”

I appreciate that she is groping for the middle ground on the issue, but I don’t think there is a balance between having a public option and not having a public option.

Hagan is under intense pressure from powerful health care interests. Docs aren’t crazy about a public plan because it will reimburse less than private insurers, which will mean practicing more efficiently in larger group practices. Hospitals aren’t fond of the public option because they too will have to practice more efficiently by creating hospital systems with bulk purchasing power and centralized administration.

And Blue Cross and Blue Shield of North Carolina doesn’t like a public option because it will force them to compete for business. Who knows, Bob Greczyn might have to live on $2 million per year instead of $4 million. Scary stuff.

Medicare is currently undergoing reforms that will pay primary doctors more and that should help attract more physicians to practice family medicine. And a public option that pays Medicare rates would help check the overbuilding of hospitals and proliferation of small medical practices.

Of course, the public option will also benefit all of these special interests. Hospitals will have to perform less charity care if most people have insurance coverage. Doctors will have more customers if patients have decent health insurance. And the public option would likely pay on time with fewer appeals and rejections than private insurers. And Blue Cross would benefit because its sterling service would shine next to the government option — at least that is what Blue Cross claims.

All of these special interests are excited about the new customers and increased cash flow they will enjoy from health reform. But they vociferously oppose any reform that will ask them to sacrifice.

Hagan is going to have to show some leadership on this issue. She is going to have to explain to the health care special interests that everyone has to give something up in this process. And she needs to support the public option, which is what 72 percent of the American people want.

Otherwise she will take a leap for the middle ground and find that there is nothing there.