By Jeff Lagasse
Healthcare Finance, February 27, 2020

Physician anesthesiologists are being forced out of network as insurance companies terminate their contracts, often with little or no notice, according to a new national survey from the American Society of Anesthesiologists.

Initial results find 42% of respondents had contracts terminated in the last six months, while 43% of respondents experienced dramatic payment cuts from insurers — both mid-contract and at renewal — in some cases by as much as 60%. Some of the impacted contracts were signed less than six months ago.

The informal, non-scientific survey, which was distributed earlier this month, received responses from 76 practice groups in 33 states. It confirms anecdotal complaints that proposed surprise medical bill legislation has coincided with a significant number of insurance contract terminations and unilateral lower payment adjustments by health insurance companies.

While the timing alone suggests insurance companies are motivated by factors related to anticipated legislative changes on surprise medical bills, some survey respondents reported they were specifically told by insurers this was the case.

The responses also indicated that UnitedHealthcare was noted as the insurer most associated with these changes, but Aetna, Cigna and Blue Cross Blue Shield also were mentioned.

https://www.healthcarefinancenews.com…

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Comment:

By Don McCanne, M.D.

Patients who have been diligent in making sure that their hospitals and surgeons are in their insurers’ provider networks, often they find that the anesthesiologist is not and thus they may be exposed to surprise medical bills.

According to this survey from the American Society of Anesthesiologists there has been a relatively abrupt move on the part of private insurers to either demand payment cuts of up to 60% or force anesthesiologists out of the insurers’ provider networks. This certainly does not benefit the anesthesiologists, and it potentially exposes patients to surprise medical bills. So who does benefit? It is likely that the legislative proposals to end surprise billing that are being considered by Congress will primarily benefit the insurers. The government will control fees without need for the insurers to negotiate contracts with the providers.

This will work particularly well for the insurers if the legislation protects the patients from the surprise bills and the principle is established that the government can control fees in the private sector and not just in government programs such as Medicare and Medicaid. The insurer gets the equivalent of contracted rates without having to negotiate contracts. Arbitration has been proposed but it is administratively burdensome and costly and may result in higher fees, so the insurers do not want that. Congress has been very friendly to the insurance industry, and it is likely that this abrupt trend in contract cancellations signals the fact that the final surprise bill legislation will be written by the insurance lobbyists.

Can those politicians who keep telling us that we want to keep our private insurance plans explain to us why we would? Maybe we could find out their true motivations by checking out OpenSecrets.org.

Yes, fees would be controlled under single payer Medicare for All, but they would be determined through negotiations with representatives of the physicians, ensuring that they are fair for the physicians and fair for the taxpayers who fund the system. As it is now, we may soon find that our urgent care centers are staffed by former anesthesiologists who now work by the clock.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Phil Galewitz
Kaiser Health News, February 25, 2020

For five years, Rasha Salama has taken her two children to Dr. Inas Wassef, a pediatrician a few blocks from her home in this blue-collar town across the bay from New York City.

Salama likes the doctor because Wassef speaks her native language — Arabic — and has office hours at convenient times for children.

“She knows my kids, answers the phone, is open on Saturdays and is everything for me,” she said.

But UnitedHealthcare is dropping Wassef — and hundreds of other doctors in its central and northern New Jersey Medicaid physician network. The move is forcing thousands of low-income patients such as Salama to forsake longtime physicians.

Across the nation, business and contractual disputes are separating patients from longtime doctors. This often occurs when doctors don’t want to accept the rates insurers are willing to pay. It sometimes occurs when insurers’ business plans require having a narrower network of doctors — doctors whose practice patterns may be easier to control.

But in this case, the cause of the exclusion goes to even deeper business connections: Wassef and other doctors say the insurer appears to be trying to shift patients to Riverside Medical Group, a 20-office physicians’ practice owned by Optum, a sister company of UnitedHealthcare, both of which are subsidiaries of UnitedHealth Group. UnitedHealthcare is essentially forcing patients to transfer to doctors it controls, the doctors allege.

Indeed, several patients said the health plan directed them to Riverside when informing them their doctors were being dropped.

Lawrence Downs, CEO of the Medical Society of New Jersey, said he estimates UnitedHealthcare is trying to remove hundreds of doctors in central and northern New Jersey from its network. That is the same area where Riverside Medical operates, he noted.

“It seems like they are steering patients away from small, community-based doctors to large groups that they own,” he said.

But further complicating matters, many Medicaid and Medicare managed-care programs are contracted out to private, for-profit insurers such as UnitedHealthcare. They are looking to create returns for shareholders. With surging enrollment in government programs, UnitedHealthcare has enjoyed rising profits and a stock price that has soared tenfold since 2010.

UnitedHealthcare gained millions of new customers after the Affordable Care Act led New Jersey and 35 other states and the District of Columbia to expand Medicaid and states turned to private insurers to handle the business.

The company operates New Jersey’s second-largest Medicaid health plan, with 418,000 members. (The state Department of Human Services has blocked UnitedHealthcare from enrolling any additional Medicaid members, a severe and rare penalty. That move — which is not related to the termination of doctors’ contracts — stems from complaints related to care management and discharge planning, the health plan’s call center and other issues.)

https://khn.org…

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Comment:

By Don McCanne, M.D.

Who is in charge of preserving the sanctity of the physician-patient relationship? The private insurers? No, they are in charge of the flow of funds. Under their business model the physician-patient relationship is expendable.

Think of that the next time that someone tells you that we don’t want Medicare for All because we’ll lose the right to have private insurance. (Be sure to read the last paragraph excerpted above to understand the ethical plane on which these insurers operate.)

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Laura Tollen, Elizabeth Keating, Alan Weil
Health Affairs Blog, February 20, 2020

In 2018, Health Affairs launched the Council on Health Care Spending and Value, a nonpartisan, expert working group that will, over the course of three years, develop recommendations about how the US could take a more deliberate approach to moderating health care spending growth while maximizing value. Led by Senator William Frist, MD, (R-TN) and Margaret Hamburg, MD, this group of 22 experts has begun its work with fact finding, studying the literature to identify areas of health spending—and spending growth—that are “excessive” and may therefore be appropriate targets for policy intervention. This post, the first in a series, provides a view into the council’s discussions, starting with its inquiry into administrative spending.

The Research

In 2018 testimony before the US Senate Health, Education, Labor, and Pensions Committee, council member David Cutler of Harvard University cited a range of estimates that place administrative spending at 15 percent to 30 percent of total health spending—three times what the United States spends on cancer care every year.

In a 2003 paper, Steffie Woolhandler and colleagues analyzed published data—including NHEA, surveys of physicians, employment data, and cost reports—to develop estimates of the administrative costs of health insurers, employers’ health benefit programs, hospitals, practitioners’ offices, nursing homes, and home care agencies. Their work represents possibly the broadest, most inclusive definition of administrative spending in the literature. They estimated in 1999 that the US spent $294.3 billion on health care administration, or a little more than 24 percent of total health care expenditures that year, as reported in the NHEA. The most-often cited figure from that study, however, is that “after exclusions, administration accounted for 31.0 percent of health care expenditures.” The authors explain that they arrived at this figure by excluding “from both the numerator and the denominator expenditure categories for which data on administrative costs were unavailable: retail pharmacy sales, medical equipment and supplies, public health, construction, research, and ‘other.’” In 2017, by trending their findings forward, the same authors wrote that administration accounted for $1.05 trillion that year.

A 2018 article by David Cutler also supports the idea that while the administrative workforce in health care is relatively large, spending in this area has not grown disproportionately in recent years.

So, Is Administrative Spending A Problem?

Given that administrative spending is high but does not seem to be rising faster than the rest of health care spending, is this a fruitful area for intervention to moderate spending growth? Below, we summarize highlights of the council’s discussion on this matter. This post captures the flavor of the conversation but does not represent consensus, nor should specific opinions be attributed to any individual council member.

Administrative Spending Is Literally The Price We Pay For Choice

Reflecting on the fact that OECD countries with more centralized health care decision making tend to have lower administrative spending, several council members suggested our robust administrative workforce is a substitute, in our market-driven health system, for the greater degree of government control over health care found in many other nations. In other words, our spending on administrative workers is literally the price we pay for diffuse decision making or, more pointedly, for choice.

At a high level, our system’s defining characteristic is choice. Insurers choose markets, providers, and their own priorities for quality improvement. Employers choose insurers and levels of benefits, beyond required minimums. Providers choose where and how to practice, what care to provide, and often what to charge. Patients choose everything from insurance plans to providers to procedures, and whether to obtain insurance at all—with the important caveat that many have few choices in these matters.

Each of these choices comes with its own price tag in terms of the administrative complexity needed to support it, and each type is valued differently by different stakeholders. The key question is whether there are some types of choices that are both relatively costly and add little value. For example, much of the administrative noise in our health care system—although we don’t know exactly how much—would disappear if everyone had the same benefit plan, or a variation on a standard plan, similar to the A through J variants of Medicare Supplemental benefits. Would a critical mass of stakeholders—for example, large employers and the third-party administrators who manage their benefits—be willing to give up flexibility in benefit design (and the ability to determine their year-to-year premium increases) to save administrative costs? Perhaps.

To pick another example, administrative spending would be significantly reduced if everyone had access to the same providers and treatments at standardized prices using standardized quality reporting. Would stakeholders be willing to make that trade-off? It seems less likely.

Progress on determining if such exchanges of uniformity for lower cost would be palatable depends upon a better understanding of preferences, values, and the financial cost of choice than we currently have evidence to support. But failing to act because we don’t have that evidence means the default is a proliferation of choices—and their attendant costs—without adequate consideration of their value.

Finally, some council members suggested that, while our level of administrative spending is high, we should not be too quick to label it as excessive. Not only does this spending support the choices noted above, but in some cases it may serve as an investment that results in reduced spending elsewhere in the system. For example, care coordination and integration—generally seen as desirable—require a certain degree of investment in administration and data systems. A decrease in these investments could actually result in a net increase in total spending.

But Not All Administrative Spending Adds Value

Having duly noted and discussed the tradeoffs that would be inherent in drastically reducing administrative spending, council members nevertheless agreed that there are some areas of redundancy that truly serve no purpose. One such example is costs associated with non-standardized protocols for exchange of money and patient data. Council members drew an analogy to the banking industry, where these functions are highly standardized, yet consumers still maintain a great deal of choice. Some noted that the health care industry is unlikely to pursue such standardization voluntarily, as many stakeholders have a financial interest in keeping patient data siloed.

Another example of low-value administrative spending is the costs associated with redundant quality and pay-for-performance systems. Many have noted that the sheer number of quality measures to which providers are subjected is potentially counter-productive to quality. Council members generally agreed that some standardization and aggregation in this area would likely lead to a non-harmful reduction in administrative spending.

Finally, many council members noted—as have others before them—that the piecework, fee-for-service nature of health care drives an enormous amount of administrative spending in the form of documentation, coding, billing, and re-billing. Capitation and other forms of outcomes-based payment would reduce the need for these types of activities, but only once the system has reached a point where fee-for-service represents just a negligible sliver of the overall payment landscape. Until then, it will be necessary for providers to keep the administrative infrastructures to support fee-for-service, even as alternative payment models expand.

Next Steps

The council will continue to track which of these themes recur across its investigation. The next blog post in this series will focus on the council’s discussion of research on the role of prices and market consolidation in driving spending growth.

Disclaimer: This post is intended to provide insight into the council’s deliberations but does not represent consensus of the group, nor should specific opinions be attributed to any individual council member.

https://www.healthaffairs.org…

Council on Health Care Spending and Value:
https://www.healthaffairs.org…

Members of the Council:
https://www.healthaffairs.org…

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Comment:

By Don McCanne, M.D.

In the lead up to the Affordable Care Act, Celinda Lake conducted focus groups which she claimed showed that Americans valued “choice” very highly which she interpreted to mean choice of private health plans rather than being limited to a single government program. She even named the concept “Guaranteed Affordable Choice.” Dismissed were polls that showed strong support for “a universal health insurance program in which everyone is covered under a program like Medicare that is run by the government and financed by taxpayers.” Totally ignored was the fact that the choice patients really want is that of their physicians and hospitals – choices private plans take away. The last decade has shown us that this diversion into choice has left virtually all of the deficiencies of our health care financing system in place.

The current campaign for the Democratic nomination for president is perpetuating this false concept that the preference for choice should dominate health reform. The single payer model of Medicare for All has proven to be popular which has caused the candidates opposed to single payer to claim that Americans want to protect their choice of private health plans instead. The media has bought into this, often stating that the candidate supporting single payer will lose to President Trump because Americans do not want to have their private plans they are enrolled in through work taken away from them (though many employees do not have employer-sponsored plans and 60 million leave their employment each year – hardly a stable source of insurance). In reality, the choices any individual has are quite limited based on factors such as income, employment, age, government service, and so on.

Though we have long needed comprehensive reform, our very high health care costs and the unacceptable failures of our health care financing system have made comprehensive reform an even greater imperative. Health Affairs – the leading health policy journal – has launched the Council on Health Care Spending and Value. In their initial deliberations they have considered the role of administration in the contribution to our high health care costs – a very appropriate starting point considering our egregiously high administrative costs when compared to other nations.

The committee found that administrative costs are high, but they did not conclude that they are excessive. Why? They suggest that this is the price we pay for having greater “choice” in our market-driven system as a replacement for more centralized health care decision making relied upon by other OECD nations. What? We are receiving greater value for this profound administrative waste?

It should be noted that a disclaimer has been issued that this view does not represent a consensus of the group nor should this view be attributed to any individual council member. They are now moving on to considering prices and market consolidation.

Wait. $600 billion in administrative waste could be recoverable with a well designed system (single payer), and they are not issuing any statement that they would endorse, but are providing this release that gives the concept of “choice” enough credibility to consider accepting these outrageous costs as a tradeoff in order to be able to perpetuate the market-driven dynamics of our system? It is worth that much money to be able to rank ideological views of political economy over sound health policy science?

We have to fix our system ASAP. The advantage of this preliminary report is that we know that we do not have to wait around until this committee completes its deliberations and issues a final report. Not offering any other proposals than one of tolerating administrative waste in order to perpetuate the market role in health care disqualifies this committee from being considered a productive resource. We need to exercise our choice to move on immediately with advocacy for the enactment and implementation of single payer Medicare for All. That’s the choice that really matters.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By John E. McDonough
Health Affairs Blog, February 21, 2020

Too much time has been spent in this presidential campaign season arguing about Medicare for All. It is not because it’s a bad idea. It is because, for the foreseeable future, Medicare for All has zero political chance to become law. To begin understanding why, consider the 70-year history of legislative efforts in the US to advance toward universal coverage. And then consider the realities in the current US political environment.

Exhibit 1 details six health coverage expansion efforts by five US presidents, indicating the year of decision, plus party control of the White House, Senate, and House of Representatives. I characterize each effort as comprehensive, meaning an attempt to achieve full universality in one bill, or incremental meaning advances for discrete and previously disenfranchised subpopulations. The final column shows the outcome of the effort.

Insights leap from this table. First, over 70 years, serious, full-on presidential and congressional campaigns to enact full or near-universal health coverage—with the exceptions of President Richard Nixon in 1974 and President Bill Clinton in 1997—were during periods of unified Democratic control of the White House, Senate, and House of Representatives (aka: the Trifecta). Furthermore, landmark coverage advances in 1965 and 2010 came from US Senates with 68 and 60 Democratic members, respectively, while losses in 1950, 1974, and 1994 occurred with 54-, 56-, and 57-seat Democratic majorities, respectively. Based on this small sample, it is not just having a Trifecta that matters; it’s having a super-majority Trifecta.

Second, since 1950, windows of opportunity to advance universal coverage occur rarely.

Third, among these six efforts (no hint at statistical significance although 70 years is a good run), three comprehensive bills lost and three incremental bills passed. Except for the limited—and subject-to-appropriation—CHIP program in 1997, a substantial Democratic Trifecta was a precondition for success.

Four of the past 40 years saw Democratic Trifectas in two fleeting periods, the first two years each of the Clinton and Obama administrations, both characterized by contentious and ambitious drives to advance universal coverage, comprehensive and incremental respectively. Both drives were factors in Democrats losing their majorities in the House and Senate in 1994 and in the House in 2010. One clear conclusion: Since 1980, Trifecta control comes and goes, and goes more easily than comes.

Now, let’s examine the same results for the New Deal era: 1933–80 (exhibit 3).

What a difference a political era makes! In contrast to the New Deal era, our modern neoliberal era, kicked off by President Ronald Reagan, is characterized by a decided preference for divided government. Since moments of Democratic Trifecta control have been so fleeting, that demands responsibility to be mindful and strategic when those opportunities arise.

What are the prospects for Democratic majority control of the US Senate in 2021—and for a supermajority with at least 60 Democratic votes needed to avoid death by filibuster? According to the non-partisan Cook Political Report and the University of Virginia’s Center for Politics’ “Crystal Ball,” If Democrats beat the odds and win a Senate majority, they will at best have a 1–2 votes majority. While impeachment and economic uncertainty could upend that balance, hopes for a Democratic supermajority are close to zero, and hopes for a slender Democratic majority are 50–50 at best.

Going for the gold ring of Medicare for All with a slender Democratic majority may guarantee repeating the 1950 and 1994 experiences, squandering another rare moment of Trifecta control. Meanwhile, groups such as the Urban Institute and the Commonwealth Fund have crafted sophisticated and smart reform proposals to achieve near-universality short of Medicare for All. Many of their proposals could be enacted by Congress using the budget reconciliation process that only requires 51 votes for Senate passage. Plausible pathways to universal coverage exist without the “burning down the house” risks of Medicare for All.

Just about anyone I know who supports the public purpose behind Medicare for All (I’m one of them) also supports action on other urgent, compelling matters affecting the nation’s health and well-being, including climate change, immigration reform, voting rights, campaign finance reform, tax reform, education policy, infrastructure, gun policy, and so much more.

If Democrats can further advance toward near-universal coverage without the life-or-death struggles of Medicare for All, they just might achieve meaningful and historic progress even as they preserve political capital to make progress on other compelling and urgent policy needs. They might even figure out how to hold Trifecta control in Washington for more than two years.

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Published Comment:

By Don McCanne, M.D.

When you have the right policy and the politics are wrong, you don’t change the policy to comply with the dysfunctional politics, you change the politics instead.

On policy, the single payer model of Medicare for All automatically includes everyone under an efficient model of financing care that recovers hundreds of billions of dollars in administrative waste (Annals of Internal Medicine 1/7/20), while removing financial barriers to care. Instead it would be funded with equitable progressive taxes that each of us could afford. Because of the administrative savings and other efficiencies we could actually spend less than we do now (PLoS Medicine 1/15/20). In rejecting the single payer model because of the alleged lack of political feasibility, the default model is an incremental approach that builds on our current programs, including ACA, and maybe adding a public option. Such an approach fails to recover the profound administrative waste, fails to establish stability in individual coverage, will still perpetuate uninsurance and underinsurance, and will perpetuate provider networks that limit choice and access to care.

And those private insurers that we would lose under single payer? Seven investor-owned publicly traded health insurers now control almost a trillion dollars of our health care spending. In the last year their revenue increased by 31% whereas their profits increased at double that rate: 66%! Their combined membership is 165 million – half of the U.S. population (Modern Healthcare 2/18/20). The primary obligation of publicly traded corporations is to maximize profits for the shareholders even if doing so is not in the best interests of patients. We should strive for a system dedicated to patients, not to passive investors.

And political feasibility? Over three-fourths of Republicans and Democrats rank “taking steps to lower the cost of health care” as “extremely” or “very” important – the top priority of Americans – according to the latest Politico/Harvard poll. The political barrier exists only because people still do not understand the vast superiority of an improved Medicare that covers everyone over the expensive, administratively wasteful, dysfunctional multi-payer system we have.

As more people understand that a single payer system will always be there for them and their loved ones, the support grows, and that support is what will create the political feasibility that too many claim is lacking. Telling people that they want to keep their insurance they get through work should not be used to dictate policy when over 60 million people leave their jobs each year (BLS).

Instead of bemoaning the divisive politics that impedes progress, the policy community, with the help of the media, should be informing the public about this great opportunity we have to provide affordable care for everyone by merely taking our revered Medicare program and fixing it so it works better and then expanding it to cover everyone. If a critical mass of the people clearly understand this concept, the political barrier would melt away.

https://www.healthaffairs.org…

PNHP advocates for health care justice for all in the form of the single-payer model of an improved Medicare that covers everyone. As an organization we do not support any political candidate nor any political party.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Stan Dorn and Rebecca Dorn
FamiliesUSA, February 21, 2020

Executive Summary

For more than a generation, Democratic and Republican administrations alike held to two core commitments: Children should have the health insurance they need for a good start in life; and immigrant families should be encouraged to seek essential benefits for which they qualify, including health care for their U.S.-citizen children.

The Trump administration has reversed both of these longstanding commitments. Instead of assuring parents that they can safely seek help for their families, the administration’s public charge rules, which become effective on February 24, deny lawful immigration status when families seek or obtain nutrition assistance, housing, or health care for which they qualify. That is one important reason why, for the first time in decades, children are now losing rather than gaining health insurance.

This report is the first to analyze Census Bureau data documenting recent health insurance changes for U.S.-citizen children with immigrant parents. We find that, while children with and without immigrant parents lost insurance from 2016 to 2018, U.S.-citizen children with immigrant parents experienced particularly great harm:

• Losses in the coverage provided by Medicaid were nearly four times as high for U.S.-citizen children with immigrant parents as for children with native-born parents.
• Increases in the proportion of children without any insurance whatsoever were nearly twice as high for U.S.-citizen children with immigrant parents as for children with native-born parents.

We also find that 7.8 million U.S.-citizen children with immigrant parents rely on Medicaid to obtain necessary health care. They comprise 22% of all children covered through Medicaid. The administration’s immigration restrictions slated to take effect on February 24 will have the foreseeable effect of causing many of them to lose health coverage.

Numerous parents understandably fear that continuing to participate in Medicaid could risk the entire family’s future by jeopardizing their immigration status. Trusted community groups need resources to educate families about the technical details of these new immigration rules. One critical detail involves the ability of families to safely obtain health coverage for their children. But for a fully effective solution that protects all of these 7.8 million children, Congress must reverse the Administration’s unprecedented and harsh immigration restrictions.

Conclusion

An iconic American invitation inscribed at the Statue of Liberty’s base asks the world to send our country “your tired, your poor, your huddled masses yearning to breathe free.” The administration’s new policies sound a very different theme. They deny lawful immigration status based solely on immigrants’ economic prospects, punishing families if they use public benefits for which they qualify. Not only are these policies harming immigrants, they are inflicting collateral damage on some of America’s youngest citizens.

U.S.-citizen children are already being pulled out of essential health programs, as their immigrant parents, concerned about impending restrictions, seek to protect their families’ ability to remain together in the United States. This damage will likely worsen when the administration’s harsh public charge policies become operational on February 24, 2020. Strong public education efforts are essential to shield as many children as possible from harm, but a fully effective solution requires stopping the administration from continuing to implement punitive immigration restrictions that abandon decades of bipartisan consensus.

https://www.familiesusa.org…

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Public Charge Update

Immigrant Legal Resource Center

After a ruling by the U.S. Supreme Court on January 27, 2020, the Department of Homeland Security can now implement their new rule relating to the “public charge” ground of inadmissibility. DHS announced that the rule will go into effect on February 24, 2020.

https://www.ilrc.org/public-charge

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Comment:

By Don McCanne, M.D.

“U.S.-citizen children are already being pulled out of essential health programs, as their immigrant parents, concerned about impending restrictions, seek to protect their families’ ability to remain together in the United States.”

That says it all. The current administration has established policies, including intimidation through the public charge rule, that are chasing U.S.-citizen children out of health care programs to which they are entitled. Many of them are ending up with no health insurance at all.

Standing by makes us complicit. Can we really do that?

Do we need to be reminded that the single payer model of Medicare for All would cover all residents, including all children?

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

Office of California Governor Gavin Newsom, February 19, 2020

The California Dream is for all.

To that end, there are 1.6 million fewer Californians living in poverty today than in 2011—a full quarter of the nation’s decrease.

But no amount of progress can camouflage the most pernicious crisis in our midst, the ultimate manifestation of poverty: homelessness.

That’s why I’m devoting today’s remarks to this crisis.

Let’s call it what it is, a disgrace, that the richest state in the richest nation—succeeding across so many sectors—is failing to properly house, heal, and humanely treat so many of its own people.

Every day, the California Dream is dimmed by the wrenching reality of families, children and seniors living unfed on a concrete bed.

Military veterans who wore the uniform of our country in a foreign land, abandoned here at home.

LGBTQ youth fleeing abuse and rejection from their families and communities.

Faces of despair. Failed by our country’s leaders and our nation’s institutions.

As Californians, we pride ourselves on our unwavering sense of compassion and justice for humankind—but there’s nothing compassionate about allowing fellow Californians to live on the streets, huddled in cars or makeshift encampments.

And there’s nothing just about sidewalks and street corners that aren’t safe and clean for everybody.

The problem has persisted for decades—caused by massive failures in our mental health system and disinvestment in our social safety net—exacerbated by widening income inequality and California’s housing shortage.

The hard truth is we ignored the problem.

We turned away when it wasn’t our sister, our brother, our neighbor, our friend.

And when it was a loved one, help wasn’t there.

Most of us experienced homelessness as a pang of guilt, not a call to action.

Back in 2005, when we started our point-in-time counts, there were over 188,000 homeless people in California—35,000 more than we have today. Even at that peak, the state didn’t treat it with the urgency required.

It became normalized.

Concentrated in skid rows and tent cities in big urban centers.

Now it’s no longer isolated.

In fact, some of the most troubling increases have occurred in rural areas, in small towns, and remote parts of our state.

No place is immune.

No person untouched.

And too often no one wants to take responsibility.

I’ve even heard local officials proclaim in public: it’s not my problem.

Servants of the public too busy pointing fingers to step up and help? That’s shameful.

After all, every homeless Californian, living on a boulevard of broken dreams, is a casualty of institutional failures—a person who’s fallen through every possible hole in the safety net.

Homelessness impacts everyone, but not equally. Some communities have been hit much harder.

Urban renewal and gentrification broke up communities of color and throttled their abilities to move into the middle class.

These are systemic issues rooted in poverty and racial discrimination.

Black Californians comprise 8 percent of Los Angeles County’s population—but 42 percent of its homeless.

And a recent poll found that nearly half of Latinos in the state are afraid that they or a family member could become homeless.

The State of California can no longer treat homelessness and housing insecurity as someone else’s problem, buried below other priorities which are easier to win or better suited for soundbites.

It is our responsibility.

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In the 1940’s and 50’s, our nation began the trend toward “deinstitutionalization.”

Not a single policy, but a series of policies.

Outrage over conditions in institutions—as well as the creation of new medications to treat mental illness—sparked a movement to treat people in their communities, rather than locking them away.

California passed the Short-Doyle Act in 1957 to fund community mental health services.

The federal government, too, pursued this worthy goal.

President Kennedy envisioned a system in which, in his words, “the reliance on the cold mercy of custodial isolation will be supplanted by the open warmth of community concern.”

State mental hospitals were closed. But the promise of community mental health was never fully realized.

The states were burdened with the responsibility but provided little in the way of support.

Laws were changed that made it harder to compel mental health treatment. Governor Ronald Reagan signed the Lanterman-Petris-Short Act in 1967, designed to end the inappropriate lifetime commitment of people with mental illness.

And critically, in 1975, a U.S. Supreme Court decision, O’Connor v. Donaldson, ruled that “mental illness alone cannot justify a state locking a person up against his will.”

All of these changes, coincided with safety net cuts, block grants, and tightened eligibility standards of the 80’s and 90’s, along with wholesale razing of skid rows and SROs—which for so many was the only housing option.

The cumulative impact made county jails the de facto mental health institutions.

Patients and their families were left with inadequate options to get the mental health care they needed.

In a politically polarized world, liberals and conservatives blame one another for these failures.

Historically speaking, both are right.

It’s time to stop pointing fingers and join hands in a transformational solution.

This year, we have proposed CalAIM, a once-in-a-generation reform of our Medi-Cal system, based on the obvious, but long-ignored principle, that physical health and brain health are inextricably linked.

After all, 10 million Californians—1 in 4—suffer from some type of behavioral health condition. It’s not a narrow issue, nor a new one.

The deeper truth is that our healthcare system has been designed to treat some of our parts, not the sum of our parts. That must change.

This landmark proposal calls for leveraging Medi-Cal as a tool to help California’s most vulnerable residents: the homeless, our children, and people cycling in and out of the criminal justice system.

This is about integrating care. Targeting social determinants of health and expanding our Whole Person Care pilots statewide.

Health care and housing can no longer be divorced. After all, what’s more fundamental to a person’s well-being than a roof over their head?

Doctors should be able to write prescriptions for housing the same way they do for insulin or antibiotics.

That’s the aim of CalAIM, transforming Medi-Cal as we know it, backed by a $695 million budget request to make this real.

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We need a new approach.

In the budget I just submitted, I proposed a new California Access to Housing Fund, and, with it, a whole new way of investing in homeless solutions.

We have a clear purpose for this Fund: paying for what works.

Gap financing for innovative housing models like hotel/motel conversions and securing vacant units wherever we can find them.

Stabilizing and expanding board and care homes.

And preventing homelessness in the first place through rent subsidies and rapid rehousing to help people one job loss, one illness, away from homelessness.

With this first-in-the-nation statewide housing fund, we can braid together state and philanthropic dollars, as well as health care, mental health, and social services—paying for housing, not overhead, by capping all administrative costs at 10 percent.

Nimble and flexible to evolve from best practices to next practices.

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Look: not one city, not one county, not even one state can shoulder this responsibility alone. This is a national crisis.

Federal decision-making contributed to this moment and our federal government has an obligation to match its rhetoric with specific, constructive, and deliverable results.

California has and will continue to extend its hand of partnership to Washington, seeking to jointly address this issue.

Honestly, this partnership should be a given.

But empty words and symbolic gestures won’t mask a 15 percent across-the-board cut to HUD’s budget.

I’m old enough to remember when HUD was in the housing business. And I’m hopeful it will be again.

After all, homelessness isn’t a blue or a red issue. It’s an everyone issue—a blight on the soul of America.

It’s time for California to say yes to housing. We cannot wait.

So this is the challenge before us and those are the tough choices we must make.

Overcoming adversity and tackling intractable problems are as ingrained in California’s character as our sun-kissed coast and our bread-basket valley.

With homelessness, I know it can be done because I’ve seen successes along the way.

15 years ago, when I was Mayor of San Francisco, in the face of long odds and stiff opposition, we established Project Homeless Connect to bring local government services directly to people. It has been wildly successful and adopted in 250 other cities.

Last year, I went back to Homeless Connect and spoke with a man named Richard Oliva.

Four years ago, Richard was homeless, drug addicted and seeking medical help at one of Connect’s neighborhood fairs.

Thanks to this program, Richard got clean, obtained disability support and ultimately moved into subsidized permanent housing.

This time, he was back—but as a volunteer.

For three years now, he has been passing out free reading glasses to people in need.

While I was there, Richard hugged me with tears in his eyes and said, “thanks to this program, I have a home of my own.”

Richard’s story reminds us that there are no lost causes in our California community.

It’s an enduring California value that every Californian has value.

So when critics tell you homelessness can’t be solved, introduce them to Richard, and the thousands of others like him who are a living testament.

I don’t think homelessness can be solved.

I know homelessness can be solved.

This is our cause. This is our calling.

Let us rise to the challenge and make California stand as an exemplar of what true courage and compassion can achieve.

Let’s get to work.

https://www.gov.ca.gov…

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Comment:

By Don McCanne, M.D.

Housing is a crucial factor in personal health and public health. Homelessness cannot possibly be eliminated through charitable, voluntary effort. It requires public policies administered through the community on all levels. We can’t do it alone, but we can do it together.

The same goes for our health care system. Voluntary, charitable efforts cannot and do not fill the voids in our health care delivery. We are already spending more than enough to meet the health care needs of all of our residents, but we cannot expect to achieve equitable allocations of our health care without guiding public policies. It’s not that we don’t understand how to do it – single payer Medicare for All would fix this problem for us – it’s just that we have to decide to go ahead and do it.

Homelessness provides the visual and olfactory stimuli that should spur our public stewards into action. Too bad that there is a lack of transparency of financial hardship and human suffering that is so prevalent as a result of the dysfunction of our health care financing system. But then, since before now we seem to have been unable to overcome the inertia preventing us from assisting the homeless in moving from their miserable subhuman accommodations into facilities that at least provide the bare basics, will we actually be inspired to move forward with the plea of Governor Newsom for us to get to work – not only for the homeless but also with his perpetual plea to provide health care for all? What will it take?

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