Candace

Talmadge

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September 15, 2008

Real Reform: California Tiptoes Again Toward Single-Payer Health Care

Too bad Massachusetts didn’t take a page from California’s health care reform playbook.

Awaiting a signature, or, more likely, another veto from California Gov. Arnold Schwarzenegger is the second incarnation of legislation that would establish single-payer health care in the Golden State. This means real reform instead of the boondoggle giveaway to the health insurance industry masquerading as such in the Bay State.

Small wonder MassCare received tons of national media attention right out of the starting gate, while this bill, the genuine article, is all but ignored. S.B. 840, the California Universal Healthcare Act, terrifies the health insurance and pharmaceutical industries that spend so many television advertising dollars and make such hefty campaign contributions.

This bill and its predecessor were authored by state Sen. Sheila Kuehl. It’s about time someone stood up to the well-funded special interests that have such a costly stranglehold over this nation’s health care.

S.B. 840 is a major departure from the current model of health care financing – the model that consumes almost one-third (at least 30 percent) of annual health care spending in this country. This financing model is not set up to ensure profits for private health insurance underwriters. It is designed to fund actual health care in the most efficient manner possible.

It does so by eliminating all private insurance risk pools in the state and putting every California resident, including illegal aliens, into one big pool – young or old, healthy or chronically ill. The bigger the pool, the more people exist to contribute to paying for the costs, meaning less money is required from each person to make the system work. (That’s why a national pool would work even better to spread risks and costs.)

According to the state’s Legislative Analyst Office, if the governor signs the bill, single-payer health care would actually begin on Jan. 1, 2011, and the transition would be challenging, to say the least. In fact, there are more questions than answers at this point. This is complex legislation with lots of moving parts. In addition to centralized financing, the bill also establishes a new state agency headed by an elected commissioner to administer the funding via new contracts with physicians, hospitals and other covered health care providers.

In a letter to Schwarzenegger, Kuehl points out that by establishing centralized financing and administration, the bill will help encourage faster and more widespread adoption of electronic medical recordkeeping, a cost-saving technology that also lowers preventable medication and other often deadly errors. The bill also grants the commissioner authority to negotiate payments for drugs and durable medical equipment and to encourage adherence to evidence-based standards of care.

Centralized funding should help level out disparities in health care quality between the state’s affluent and poorer communities. Unlike the present funding system, which rewards pricey acute care, the central administration will also emphasize primary and preventive care as another means of keeping costs in check. In other words, while most private insurance balks, this system will pay for the preventive tests that detect disease in the early stages when it’s cheaper to treat (and more likely to be successfully treated).

The new health care commissioner will also have to negotiate with the federal government to incorporate federal funding for programs like Medicare and Medicaid (Medi-Cal in the state). There’s no guarantee this will run smoothly. The LOA also notes that retired state employees might sue to prevent the tax revenues that currently fund their health care diverted into the centralized system.

According to the LOA, the economic impact of the bill is uncertain. No one can predict what will happen to jobs in the state after the private health insurance industry goes away and the new payroll tax of 8 percent (11.5 percent for the self-employed) goes into effect.

Some obvious consequences: California employers would no longer need to provide health care coverage to workers. This potentially could result in savings for the businesses that already pay for this kind of benefit while imposing greater costs on companies that do not. But this bill also grants California employees the freedom to ditch jobs or even be laid off and not worry about losing access to health care. That kind of peace of mind is priceless and well worth additional payroll taxes.

In short, S.B. 840 is a big gamble. But the risk of doing nothing is even higher – just more of a patchwork system that doesn’t work for those who most need it and costs billions of dollars more than necessary. Just how unhealthily miserable and impoverished from outrageously high health care costs do we need to be to do something about it?

© 2008 North Star Writers Group. May not be republished without permission.

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