In thinking about the “public option” in healthcare insurance, Andrew Samwick considers a sector in which there is already competition between public and private offerings, higher education:
It struck me this morning, in reading about the continued woes of the California public university system, that higher education provides an example of an arena in which public and private options compete with each other. Are there lessons that can be drawn from this example?
I think the differences are most instructive, with two differences in finances being most critical. In the education field, the private entities compete most effectively with the public options when they build up large endowments through philanthropy. I don’t see this happening to the same degree in health care, and then only around providers like hospitals and not the insurance companies.
