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For Michael Moore, Controversy Is Marketing

By MERISSA MARR
The Wall Street Journal
May 18, 2007; Page B1

Filmmaker Michael Moore says on his Web site that his new documentary, “SiCKO,” “will expose the health-care industry’s greed and control over America’s political processes.”

Controversy has become a key ingredient of marketing Mr. Moore’s work, and the backers of “SiCKO” hope that the new movie will stir up emotions and help generate the kind of buzz that made his last movie, “Fahrenheit 9/11,” both a topic of national debate and an unprecedented blockbuster in the documentary genre. “Fahrenheit 9/11” had a budget of $6 million and grossed more than $100 million in the U.S. alone.

Mr. Moore’s formula is simple: Pick a divisive topic and goad opponents into a public debate before the movie opens. The question is whether his new film’s subject material — health care and insurance — will deliver the kind of heat that he generated for “Fahrenheit 9/11,” a movie about the Bush administration’s actions before and after the Sept. 11th attacks. “SiCKO” makes its debut at the Cannes Film Festival this weekend and opens in U.S. theaters June 29.

Movie producer Harvey Weinstein, who has worked on Mr. Moore’s previous movies and whose company is financing, marketing and co-distributing this one, predicts his new release “will ignite the country once and for all to deal with health care.” Unlike “Fahrenheit 9/11,” he says the movie will appeal to both ends of the political spectrum, though it may be difficult for Mr. Moore to win backing from conservatives he has previously lambasted.

Mr. Moore’s critics — like Canadian documentarians Debbie Melnyk and Rick Caine, who recently released a movie that slammed his style — say that he understands the appeal of a good brawl. “Michael knows the entertainment quotient trumps all,” says Ms. Melnyk.

“Fahrenheit 9/11” had a lucky break early on when Walt Disney Co. refused to distribute it, a point Mr. Moore and company used to generate enormous amounts of free publicity for the film.

To help build buzz for “SiCKO,” Mr. Weinstein brought back the “Fahrenheit 9/11” team, including political consultant Chris Lehane. Mr. Lehane is perhaps best known as an ex-adviser to Bill Clinton; he helped the former president navigate such crises as Whitewater and Monica Lewinsky.

As was the case with “Fahrenheit 9/11,” the team is overlaying its traditional marketing campaign with an aggressive online outreach, including postings and chat on progressive sites like Daily Kos and screenings for bloggers. But this time it’s a broader push, including conservative sites. Says Mr. Lehane: “The film has the potential to appeal to a broader audience because it is not red state versus blue state, but the little guy versus powerful corporations and a broken political system.”

In a classic move to heighten the suspense of the project, Mr. Moore has largely kept a lid on the contents of the movie. Still, the drug companies have already started taking the bait. When Mr. Moore was just beginning the documentary, some of them sent out warnings to employees not to speak to the baseball-capped documentarian.

Rumors started circling in the industry after the filmmakers showed the movie to key groups such as the nurses’ union and leading health-care experts. The producers of “The Passion of the Christ” employed a similar tactic by screening their movie in advance of the opening for religious groups and stoking interest among Christians. The “SiCKO” team also plans to cross-market premieres of the film with organizations with an interest in the subject. They declined to name the groups.

The trade group Pharmaceutical Research and Manufacturers of America (PhRMA), has already prepared a press release that it is sending out when asked for comment on the movie, even though no one at PhRMA has seen it yet. In the press release, the group says Mr. Moore has a track record for sensationalism and will not make a documentary that is “balanced, thoughtful and well-researched.”

The sensitivity is perhaps understandable, given that the drug companies are still licking their wounds from the 2005 drama “The Constant Gardener,” a fictional film which portrayed pharmaceutical firms in an unflattering light. The trade group America’s Health Insurance Plans (AHIP) hired William Morris several years ago to help improve their image in Hollywood.

Picking a fight with the opposition is a key component of Mr. Moore’s typical marketing plan. Depending on the response of the industry, the “SiCKO” marketers have created various tactics to fire back. That may include gimmicks such as placing logos of HMOs on tombstones in newspaper ads, according to people familiar with the situation.

Mr. Weinstein acknowledges that a shrill response from the film’s targets would play right into their hands. “If they want the movie to succeed, they should fire away,” he says.

Adds Mr. Lehane: “If someone throws a $1,000 bill at our feet, of course we’ll bend down and pick it up.” He noted though that health-industry companies are likely to rely on groups they fund and political allies to respond.

Ken Johnson, senior vice president for PhRMA responded: “No one should be surprised that Michael Moore is making baseless accusations designed to drum up publicity for his movie.” He added that Mr. Moore’s movie was not on their “top ten list of concerns.”

AHIP spokesman Mohit Ghose says they will respond to the movie once they’ve seen it, but they are already focused on improving quality access to health care and affordability.

Mr. Moore has mined other sensitivities. Details of a trip to Cuba to film part of the movie have been much discussed in the press in recent weeks. Mr. Moore took a group of 9/11 first-responders suffering from respiratory problems to Cuba, where they received treatment.

That provoked accusations that he used the workers as pawns. The U.S. government also piled in, saying it had launched an investigation into whether Mr. Moore violated a travel ban by filming in Cuba.

Shortly after receiving a letter from the U.S. Treasury Department, Mr. Moore posted a response on his Web site. People involved in the movie say the Cuba scenario has been misreported. Mr. Moore’s team declined requests to clarify the details. Mr. Lehane would only say: “People will be very surprised and provoked about the motivations for the trip to Cuba and what transpired on the ground.”

Mr. Moore uses his Web site to publicize daily reaction to his movie, including the latest stories on the “controversy.” Recent headlines include a news agency story about how Mr. Moore is hiding the copy of his movie from U.S. authorities ahead of the Cannes screening. This week, it also featured a section on former Sen. Fred Thompson, a possible presidential candidate, who jumped into the debate by criticizing Mr. Moore for going to Cuba.

Mr. Moore responded by scolding the Republican from Tennessee, citing a report about his fondness for Cuban cigars and inviting him to debate the subject of health care. In a video response, Mr. Thompson, cigar in hand, declined to meet Mr. Moore and said he should think about a mental hospital, which he claimed was where Cuba locked up one documentary maker.

Regence BlueShield's bait-and-switch

Gulp! Regence rate boost averages 19 percent for individual plans

By Kyung M. Song
The Seattle Times
May 16, 2007

Regence BlueShield on Tuesday began notifying 137,000 individual-plan customers that their premiums are rising an average of 19 percent in July in the steepest increase for individual plans this year by a Washington health insurer.

And for 16,000 of those enrollees, the rate increase will total 40 percent because they also happen to be moving into an older, more expensive age group.

The rate jump is a sharp change from last year, when Regence proposed â€” then rescinded â€” raising premiums by 5 percent. Since leaving the rates unchanged last July, Regence has gained 30,000 new customers, bringing its total individual members to 137,000.

The rate boost does not apply to people who buy their coverage through employer plans or small-group plans. But both Regence’s rate reversal last year and the size of this latest premium increase have outraged Washington Insurance Commissioner Mike Kreidler, who accuses the insurer of a bait-and-switch.

“I have serious concerns that consumers may have been whipsawed in an effort by Regence to increase market share,” Kreidler wrote in a letter sent Tuesday to state legislative leaders.

But Kreidler has no power to stop the increase.

Charlie Fleet, a spokesman for Regence, said it needed to raise premiums to cover higher claims costs.

“We offer good value to our members,” Fleet said.

http://seattletimes.nwsource.com/html/localnews/2003708848_regence16m.html

Comment:

By Don McCanne, MD

Some years insurers will hold their premiums down in order to gain market share. After their enrollment increases and their competition is diminished, they then raise premiums sharply to recover deferred profits plus provide an additional generous profit margin for current insurance sales. Wall Street dignifies this process by calling it the insurance underwriting cycle, but it is nothing more than a devious bait-and-switch scheme.

Those facing a 40 percent premium increase are not only aging, but many of them have developed significant medical problems. By making premiums unaffordable for this high-cost sector, many will have to drop their coverage. This advances Regence’s business plan to selectively insure the healthy. This totally defeats the very purpose of health insurance: preventing financial hardship for those with medical needs.

A national health insurance program would accomplish this crucial goal by automatically including everyone.

Moore in The E.R.

By Jeffrey Kluger
Time Magazine
Thursday, May. 17, 2007

Here’s something that won’t surprise you: Michael Moore has some gripes about how things are going in this country — and he wants to share them with you. The filmmaker behind such blistering hits as Fahrenheit 9/11, Bowling for Columbine and Roger & Me, Moore, 53, is back with Sicko, his soon-to-be released take on the U.S. health-care industry.

The movie, screened for TIME, is double-barreled Moore, a mix of familiar numbers (47 million uninsured Americans, the ever rising cost of care) and chilling moments (the 18-month-old baby who dies of a seizure when she’s denied emergency-room access, the husband and father with kidney cancer whose insurer won’t pay for a bone-marrow transplant). Together, they will have many moviegoers angry enough to gouge holes in their armrests.

But it’s not always clear how fair Moore plays. His romanticized take on Canada’s single-payer health-care system is a few data points shy of a controlled study, and his decision to shoot part of the movie in Cuba made him the subject of a federal investigation, which may be precisely the p.r. gold he was after. Still, the film will surely get people talking, which is just what Moore wants — and just what he did in a wide-ranging conversation with TIME.

TIME: A portion of your audience is pre-sold on your politics, but another portion is undecided. Is your finger-in-the-eye style the best way to change minds, or does it give people a reason to tune you out?

Michael Moore: I’ve already moved the needle on some things. In March 2003, I stood up at the Oscars and said we’re being led to war for fictitious reasons, and I was booed. Only 20% of the country agreed with me. I should have learned my lesson and gone away quietly. Instead, I made Fahrenheit 9/11. I did that because I believe that the majority of Americans are not only persuadable but that they have a generous heart and ultimately want to do the right thing. Now I am in agreement with 70% of the country about Mr. Bush. So it took a while.

TIME: With Sicko, do you think you picked an easy target? After all, you can’t find a whole lot of people who are happy with their HMO.

Michael Moore: This film does cut across party lines. Everybody gets sick; everybody has had a problem with insurance or the prescription drugs they’re supposed to be taking or an elderly parent who needs care. On the surface, it does seem that the only people who are going to be upset are the executives of insurance and pharmaceutical companies.

TIME: So if there’s no argument that the system is broken, why use your energies to start one?

Michael Moore: Because what’s even more broken is the fact that our Congress and White House are bought and paid for by these two industries, which rival the oil industry in terms of money and influence. They have a vested interest in maintaining their control. But they’re not dumb. They know which way the wind is blowing and that this is the No. 1 domestic issue with Americans. Their job now is to try to control it so that universal health care is run through them, so that they can still skim the money, make the obscene profits and keep their investors happy.

TIME: Of the declared presidential candidates, down to the Dennis Kucinich level, say, who do you think has the best health-care plan? Including Kucinich? We could include him.

Michael Moore: Then Kucinich, but he doesn’t go far enough. He supports what he’s calling a single- payer nonprofit plan, but from my read, it would still allow [private] entities to control things, as opposed to the government. What’s wrong with the government? The right wing and the G.O.P. have done a wonderful job brainwashing people that government doesn’t work, and then, as Al Franken says, they get elected and proceed to prove the point. [Laughs.]

TIME: So you think Washington could handle a program this big?

Michael Moore: Ask anyone on Social Security if their check comes on time every month. Like clockwork. And it comes through the so-called dilapidated U.S. mail. My dad’s check literally will come on the same day every month. The government has been quite good and efficient at creating a number of systems. If I tell people the administrative costs for a private health plan–advertising, p.r., executive pay–are 20% and ask them what Medicare’s administrative costs are, they’ll guess 50%, 60%. The fact is, for Medicare/ Medicaid, it’s 3%. The last figure I read for Canada’s [government] system is 1.7%.

TIME: Your movie paints an almost utopian picture of the Canadian system. You do show some American critics arguing that there can be long waits for treatments north of the border, and you refute them simply by interviewing a handful of happy, satisfied Canadians. Pretty unscientific, no?

Michael Moore: Canadians as a whole are pretty happy with their system. Yes, it’s a flawed system, and the main flaw is that it’s underfunded. The [in-depth] answers exist in articles and essays, and I’ll have them up on my website.

TIME: You also speak rhapsodically about the French and Cuban systems and travel to Cuba, where you interview Che Guevara’s daughter. France, Cuba, Che. Are you going out of your way to annoy the right?

Michael Moore: I give people more credit than the media and the political machine running this country do. The story line is: France, bad; France, cowards. What crime did France commit? We wouldn’t have had this country without their support in the Revolution. They gave us that statue that sits out in New York Harbor. They responded immediately after 9/11. And they remain eternally grateful for what we did during World War II.

As for Cuba, yes, when I’ve got a film crew there, they’re going to show us their best. But there’s a reason the World Health Organization ranks their health-care system [among] the best in the Third World and that people from Latin America come there for their health care. There’s also a reason Cubans live on average a month longer than we do. I’m not trumpeting Castro or his regime. I just want to say to fellow Americans, “C’mon, we’re the United States! If they can do this, we can do it.”

TIME: What was the hardest thing about making this movie?

Michael Moore: Getting insurance. How do you convince an insurance company to insure a film about insurance? I finally found this guy who’s got a little company out in Kansas City. I think he’s the only Democrat who owns an insurance company.

TIME: Do you think people will accuse the movie of inaccuracy?

Michael Moore: I offered $10,000 to anybody who could find a single fact in Fahrenheit 9/11 that was wrong.

TIME: Have you had to pay anything?

Michael Moore: No, of course not. Every fact in my films is true. And yet how often do I have to read over and over again about supposed falsehoods? The opinions in the film are mine. They may not be true, but I think they are.

TIME: How do you entertain people at the same time you’re trying to get them to think about hard things?

Michael Moore: When I’m shooting a movie, I’m always in an invisible theater seat. I respect the fact that people have worked hard all week and want to go to the movies on the weekend and be entertained. But the struggle for me does not come between politics and entertainment, because I know that if I succeed in making an entertaining and funny or sad film, that the things I want to say politically will come through very strong. If there ever is a struggle, making a good movie will always supersede the need to be noble.

TIME: Yet you don’t shy from showing some pretty stark scenes in your movies. Anything you’ve ever decided to cut because it was just too unsettling?

Michael Moore: In Bowling for Columbine, we used the videotape in the cafeteria, but I’m not going to show students being killed. In Fahrenheit 9/11, I felt that the media had shown the images of the planes flying into the towers more than enough, so the screen goes black for over a minute during the attack. So I’m always thinking about this sort of thing.

TIME: After taking aim at so many big targets, who do you plan to go after next?

Michael Moore: I don’t know. I’m going to wait and see how people respond to this. After that, I think it’s time for a romantic comedy.

Regence BlueShield’s bait-and-switch

Gulp! Regence rate boost averages 19 percent for individual plans

By Kyung M. Song
The Seattle Times
May 16, 2007

And for 16,000 of those enrollees, the rate increase will total 40 percent because they also happen to be moving into an older, more expensive age group.

“I have serious concerns that consumers may have been whipsawed in an effort by Regence to increase market share,” Kreidler wrote in a letter sent Tuesday to state legislative leaders.

But Kreidler has no power to stop the increase.

Charlie Fleet, a spokesman for Regence, said it needed to raise premiums to cover higher claims costs.

“We offer good value to our members,” Fleet said.

http://seattletimes.nwsource.com/html/localnews/2003708848_regence16m.html

Comment:

By Don McCanne, MD

A national health insurance program would accomplish this crucial goal by automatically including everyone.

U.S. health care ranks last again

Mirror, Mirror on the Wall: An International Update on the Comparative Performance of American Health Care

By Karen Davis, Ph.D., Cathy Schoen, M.S., Stephen C. Schoenbaum, M.D., M.P.H., Michelle M. Doty, Ph.D., M.P.H., Alyssa L. Holmgren, M.P.A., Jennifer L. Kriss, and Katherine K. Shea
The Commonwealth Fund
May 15, 2007

Despite having the most costly health system in the world, the United States consistently underperforms on most dimensions of performance, relative to other countries. This report — an update to two earlier editions — includes data from surveys of patients, as well as information from primary care physicians about their medical practices and views of their countries’ health systems. Compared with five other nations — Australia, Canada, Germany, New Zealand, the United Kingdom — the U.S. health care system ranks last or next-to-last on five dimensions of a high performance health system: quality, access, efficiency, equity, and healthy lives. The U.S. is the only country in the study without universal health insurance coverage, partly accounting for its poor performance on access, equity, and health outcomes. The inclusion of physician survey data also shows the U.S. lagging in adoption of information technology and use of nurses to improve care coordination for the chronically ill.

The findings indicate room for improvement across all of the countries, especially in the U.S. If the health care system is to perform according to patients’ expectations, the nation will need to remove financial barriers to care and improve the delivery of care. Disparities in terms of access to services signal the need to expand insurance to cover the uninsured and to ensure that all Americans have an accessible medical home.

http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=482678&#doc482678

Full report:
http://www.commonwealthfund.org/usr_doc/Davis_mirrormirrorinternationalupdate_1027.pdf?section=4039

Comment:

By Don McCanne, MD

To really understand this report, you do need to read it in full. Based on the performance measures surveyed, of the six nations studied, the United States does have the least equitable and most expensive system, and places last in overall ranking. Clearly, the American health care system is NOT the best in the world.

The opponents of single payer national health insurance will be quick to point out that Canada’s ranking is next to last, drawing the spurious conclusion that single payer would be the worst model for us to adopt. That is why, if you wish to be prepared to respond to it, you should read the full report. Many of the deficiencies noted have little, if any, relationship to the method of financing health care.

No country could possibly have a perfect score on every parameter. But it is important for the stewards of each health care system to identify their deficiencies and then adopt policies that would rectify them.

More importantly, many of the major deficiencies noted in the United States are specifically due to our highly flawed system of financing health care. We will always be at the bottom until (1) we remove financial barriers to care by providing comprehensive health insurance for everyone, and (2) we reinforce our primary care infrastructure, ensuring an accessible medical home for everyone.

Then we really could have the best health care system in the world.

Marsha Gold on Medicare Advantage and the market

Medicare Advantage In 2006-2007: What Congress Intended?

By Marsha Gold, senior fellow at Mathematica Policy Research
Health Affairs
May 15, 2007

This analysis shows that MMA (Medicare Modernization Act) has succeeded, at least in the short term, in expanding MA (Medicare Advantage) options nationwide and making MA more available in rural areas. The policy question is what value to place on this.

Much of the gain, especially for beneficiaries in areas with limited prior choice, has been achieved through expansion of the least-managed of MA options. Although the industry responded to congressional interest by offering R-PPOs (regional PPOs), firms offered PFFS (private fee-for-service) plans more extensively, and enrollment has gravitated toward this arrangement. We cannot tell from the information available how much this reflects beneficiaries’ preferences versus the ways in which firms have marketed these options.

Perspectives on current MA trends are largely in the eye–and orientation–of the beholder. If one believes that all choice is good and competition brings prices down, MMA has clearly been successful in expanding choice and competition. Because higher payments are driving the market, beneficiaries who enroll also benefit because benefits, even in the more limited plans, probably compare favorably against those of Medicare alone for not that much more premium. It could be that once attracted to MA, enrollees can be moved to more managed products, as some firms have indicated that they want to do.

If one tends to believe less in the market, some aspects of current trends are a concern. Most narrowly, the current expansion is fueled by MA payment rates that exceed what traditional Medicare now pays. At least in the short run, this means that Medicare pays more for each beneficiary that is attracted to MA. The added fiscal burden on Medicare is especially high for PFFS plans, because firms are benefiting from “floor” payments. Although individual enrollees may gain, beneficiaries as a whole may be harmed if higher payments add to the fiscal stress on Medicare, making the program less viable in the long run. Choice also makes demands on beneficiaries’ time, is challenging for many not familiar with the issues or those with cognitive limits, and adds the risk that coverage will be unstable if the forces that facilitate firms’ development of PFFS plans also make it easy for them to exit MA.

Do the benefits exceed the risk? Although people will differ in their calculations, I suggest that the answer could well be negative. The additional PFFS plan choices essentially allow firms to “piggyback” on Medicare’s existing investment and policies and do relatively little to improve care management because they are precluded from doing so by both Medicare and their own reservations. To the extent that PFFS enrollment grows, Medicare’s risk pool is fragmented, and the program’s purchasing power with providers is diluted.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.26.4.w445v1

Comment:

By Don McCanne, MD

Paying these private, fee-for-service Medicare Advantage plans 119 percent of the costs of the traditional Medicare program, and then pretending that this represents market competition, is utter nonsense.

This account by a highly respected and very credible authority should lay to rest forever the debate over the wisdom of this program. These wasteful private plans need to be dumped, and our legislators need to move forward with genuine health financing reform.

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

Health care plan veto won't stop lawmaker

Kuehl calls state-run program ‘gold standard,’ works to gain support

Tom Chorneau
San Francisco Chronicle, Sacramento Bureau
Tuesday, May 15, 2007

Sacramento — The debate over health care reform in California has focused on proposals from the governor and legislative leaders aimed at expanding private insurance coverage to more residents.

But there’s another idea — one with the support of legions of enthusiastic voters and a majority of the Legislature: Replace private insurance with a system managed by the state, the so-called single-payer system.

“Single-payer is the gold standard; it’s the right answer,” said state Sen. Sheila Kuehl, D-Santa Monica, author of SB840, which has already been vetoed once by Republican Gov. Arnold Schwarzenegger.

The idea, borrowed from health care plans used in many parts of the world including Europe and Canada, would provide universal coverage, including dental and vision, to all Californians.

Supporters contend that by cutting out the private insurance companies — their profits and overhead — costs will actually fall. They say the dollars now spent by workers, employers and government in California — estimated at about $186 billion last year — would be more than enough to pay for the universal service.

But Schwarzenegger and many Republican lawmakers oppose putting the state in charge of the system. Thus Democratic leaders, some of whom also support Kuehl’s bill, are working out a compromise with the governor that would leave the existing system dominated by private insurance in place.

Kuehl said she’s skeptical about what may emerge from closed-door negotiations.

There had been expectations that she would push her bill along and on to the governor’s desk later this summer as a popular alternative to any other deal that might be worked out. But Kuehl said she wants to keep her bill around another year even though she knows it has virtually no chance of ever getting Schwarzenegger’s signature.

“I don’t want it to be vetoed this year,” Kuehl said. “I want it to be vetoed in 2008, if he’s going to veto it — when we’ve got a national election going on and it gives me a whole other year to build support for it.

“People might say, why are you doing this if we passed that other bill? And I’ll say I still think this is the better answer,” said Kuehl. “This is will not go away because someone passed a half-assed bill.”

Although recent statewide polls show weak support for the concept, Kuehl’s bill has strong backing in the Legislature. Last year, the same bill passed out of the Assembly with a near-unanimous vote among majority Democrats and in a similar fashion in the Senate.

This year, the bill has 41 co-authors including Senate President Pro Tem Don Perata, D-Oakland, and Assembly Speaker Fabian NÃºÃ±ez, D-Los Angeles.

Still, Schwarzenegger remains opposed, dismissing the notion that government can efficiently run a health care system.

“We have watched what they have done to the health care system in the prisons,” said Schwarzenegger during a speech before the California Medical Association just last month. “And what did the government do? The prison health care system has been such a disaster that the federal court had to take over that system.

“Now they want to tell us they want to use that same system and provide health care for 37 million people — now, think about that,” he said. “What do they think, we are crazy? No, it’s not going to happen.”

More to the point, argued Chris Ohman, president of the California Association of Health Plans, is that single-payer does nothing to rein in the escalating cost of care, which he said has been increasing far faster than the rate of inflation in recent years.

“The cost issue precipitates an affordability issue, which in turn creates a coverage issue,” he said. “The concern we have with single-payer is that it doesn’t address the causes of medical cost inflation.”

Single-payer supporters say insurance companies’ profits are among the fastest-growing components of health care costs. Ohman said that overall, his members’ profits are similar to other industries.

Kuehl’s bill would require workers to contribute about 4 percent of earnings to the funding pool and employers to contribute about 8 percent. But if costs exceed available funds, critics point out, the state would be forced to either cut services, impose co-pays or deductibles, or raise taxes.

Kuehl said health care costs have generally tracked closely to the rise in income taxes so the need for new money would be unlikely. Besides, she argues, the existing system is already on a runaway track.

“What have you got now that’s rational? Nothing. We are now all completely at risk,” she said.

Looming on the horizon, too, is the specter of a single-payer ballot initiative — something that the California Nurses Association and some of the big labor unions have talked about in the past. Currently there is no measure in the works to put the proposal on the ballot, but that could change quickly.

The Service Employees International Union, which is a strong supporter of Kuehl’s bill and a potential sponsor of a ballot measure, is looking for compromises as part of a group that includes insurers like Blue Shield and Health Net, as well as providers like Kaiser and Catholic Healthcare West and groups including the teachers union and the medical association.

Despite her passionate support for single-payer for many years, Kuehl acknowledged the challenges it faces and conceded the time might not be right.

Indeed, a Field Poll conducted in late 2006 found increasing anxiety among voters over health care costs and strong support for the idea that government should be responsible for providing access to care.

Still, 52 percent said they favored reforming the existing system while 24 percent said they would support a new government-run program.

“I’m one of the major spokespeople of single-payer, and I’ll continue to be that,” Kuehl said. “I’ll do that next year, I’ll do it after I’m termed out, until we get another governor or an initiative.”
Comparing proposals

Here’s a comparison of some features of Gov. Arnold Schwarzenegger’s health care plan and the single-payer proposal from state Sen. Sheila Kuehl.

Who’s covered?

Governor’s plan aims at expanding coverage to 6.5 million uninsured residents. Kuehl’s plan would establish a new system for all California residents.

How do the plans work?

The governor’s plan requires all Californians to get coverage from a private insurer or from an existing government program. Kuehl’s plan would replace private insurance with a single-payer system managed by the state.

Cost

Governor’s plan requires that individuals have a minimum policy with a $5,000 deductible and out-of-pocket maximum of $7,500 per person. Employers with 10 or more workers must offer coverage or contribute 4 percent of payroll into a purchasing pool.

Kuehl’s plan imposes a payroll tax of 8 percent on employers and 4 percent on workers.

Key criticism

Governor’s plan would tax doctors, hospitals and other providers to help pay for new coverage. Insurance companies would also be required to accept any applications, regardless of preconditions. Kuehl’s plan might require new taxes to pay for services if planned sources of revenue cannot keep pace with medical inflation.

E-mail Tom Chorneau at tchorneau@sfchronicle.com.

Health care plan veto won’t stop lawmaker