The Future of Healthcare in California
by State Senator Leland Yee
The single biggest issue that the State Legislature will address in 2007 is California’s healthcare system. The most significant problems with our current healthcare system are the exorbitant cost and the operational inefficiency. These factors work to exclude many average working people from having access to essential care. Without affordable healthcare, families are forced to depend on emergency rooms for basic health care and struggle with exorbitant bills, while our entire economy suffers. This has created a growing crisis for patients, healthcare providers, and taxpayers alike.
The Problem
Currently, at least 6.5 million Californians are uninsured, and many more do not have adequate insurance. This means that more than 1 in 5 Californians do not have access to preventative care, medical advice and basic treatments, and do not have a safety net if they become seriously ill or gravely injured. These people are average working people whose employers do not provide healthcare and who don’t make enough money to pay for an individual policy for themselves and their families.
This is due in large part to the rising cost of health care. Health insurance premiums have risen 87 percent since the year 2000. In the same time period, wages have increased by only 20 percent. Even those with health insurance are often surprised to find that their policies do not cover a large portion of their costs. Even with these high costs, people with pre-existing conditions often cannot qualify for coverage, even for issues as minor as having asthma when they were a child. It is a startling fact that a full half of all personal bankruptcies in the U.S. are due to health care costs.
With so many uninsured or underinsured Californians we are jeopardizing the health of our residents and the viability of our economy. Lower productivity and lost income tax revenue are among the consequences of having unhealthy California residents. If the breadwinner of a family without health insurance gets injured, the entire family will suffer. It is a shame for any of us to live in a society where someone who needs treatment will not receive it, even though there is a hospital with all the right supplies right down the street.
Our Resources
The problems we have with our healthcare system do not stem from a lack of funding. Californians spend $186 billion a year on healthcare. This is more than enough to cover the needs of every Californian.
The problem is that currently 30 percent of every healthcare dollar is spent on administration. There is paperwork for purchasing and maintaining your insurance, paperwork and processing when you arrive at the doctor’s office, more paperwork when your doctor’s office files with your insurance company. Much more paperwork — and the possibility of extra costs being passed on to the patient — if your insurance provider and your doctor disagree about what treatments were actually covered in your insurance policy.
All the other advanced countries in the world are able to provide all their residents with quality care. The only reason the U.S. seems unable to manage universal coverage is because of our excessively inefficient system.
Proposals
This legislative session, many proposals have been brought forward to address these problems.
Insurance market reforms could help to shape the insurance industry and provide better care for a more affordable price. However, these reforms are a piecemeal process and it is difficult to achieve the desired solutions by applying band-aids one at a time to a system with so many holes. Insurance market reforms can help to solve some problems in the short-term, but they do not solve the underlying problems with our system.
Governor Schwarzenegger suggested requiring every Californian to purchase health insurance as is now required in Massachusetts. However, this proposal does not solve the problem of exorbitant premiums and incomplete policies. It would leave many Californians still suffering from a lack of access to preventative care and uncovered in case of severe injury or illness.
The President pro Tem of the Senate and the Speaker of the Assembly have also proposed solutions. Both proposals involve shared responsibility between employers and employees. These proposals, like the others, unfortunately don’t fully address the problem of the unnecessarily exorbitant cost of healthcare.
Despite the high cost of healthcare, the U.S. healthcare outcomes rank at the bottom of all industrial nations. Clearly, there is a problem with our healthcare system, not with who is paying for it or who’s required to have it. We have the money and the resources to fully serve every Californian, and yet even those who have current health insurance are not fully covered and face excessive costs.
The Solution
Single-payer health insurance is the only solution on the table that will address all the underlying problems with our system. Single-payer healthcare means that one entity — the state of California — would be responsible for providing healthcare to its citizens. This eliminates the majority of the paperwork and administrative inefficiencies. It eliminates the power that the drug companies have to charge small medical facilities exorbitant prices for life-saving medicines.
Single-payer healthcare is financially smart. Instead of using 30 percent of every dollar on administration, the state can require that 95 percent of each dollar be spent on care. Instead of wasting billions on paperwork, universal healthcare will save Californians $25 billion a year by simplifying the process.
Single-payer health insurance means that the State of California can leverage economies of scale to provide greater access for all. Costs can be kept low because California will be one large pool of people able to negotiate competitive prices for medical services and life-saving medicine.
Single-payer healthcare means a healthier economy. With this system, California can invest heavily in health education and preventative care. While health providers may benefit from having more sick patients to see, the State would be interested in keeping everyone as healthy as possible to prevent unnecessary illness and injury. And when a person does become ill or injured, there won’t be any questions about what their insurance policy covers or whether they can afford care — every person will be treated.
I am proud to be a co-author of Senate Bill (SB) 840, which will establish a universal, single-payer healthcare system. The Universal Healthcare Act will provide every California resident with healthcare. In a state with such abundant resources, it would be a shame to provide anything less.
California has always been a leader in ideas and progress. It’s time to lead the way once again. Please join me in advocating for the rights of all residents to have access to our healthcare resources.
Sincerely,
Leland Y. Yee, Ph.D.
Assistant President pro Tempore
California State Senate