To nobody's great surprise, the Obama administration has backed off its support for a public option, suggesting that state level non-profit cooperatives would do the trick just as well. That, of course, is bullshit.
Just creating fifty-one (including DC) separate cooperatives presents an organizational nightmare, especially if it is left primarily to the states. They will be too small to negotiate effectively, will find it hard to find a sufficient number of doctors and hospitals to participate, and will provide no significant savings over the privates. Essentially self-insurance plans forced to accept everybody not cherry picked by the local privates, they'll be worthless, and bound to fail.
A public option, on the other hand – nationwide, and with a very large membership – cannot be marginalized or ignored. Despite Obama administration commitments, it may be able to drag additional concessions from big pharma. It also may be able to start the move towards outcome based rather than fee for service payments.
One only can hope that Obama's bag of political tricks includes more than "compromising" with those who want him to fail. It is pretty clear that the public option will be included in the House bill, even if health cooperatives are the best that can win sixty vote approval from the Senate.
One also hopes that the administration will work, however covertly, to get the public option reported out of the conference committee. If that happens, it will take only fifty votes in the Senate to pass the final bill – most of the media seems to have forgotten that the health care bill will be considered under the reconciliation process, and cannot be filibustered.
So, like everybody else, I'll wait and see what happens. This is the big one for Obama, so maybe he'll come through.