The Sacramento Bee
March 24, 2002
By Keith Richman
It is time to address the fundamental health care financing problems causing our access and affordability symptoms. The Band-Aid approach can no longer cover the deep wound. California needs a master plan for health care — a practical, cost-effective blueprint for the facilities, human resources and financing needed to provide quality health care to the estimated 45 million people who will call California home in 2020.
It will take strong leadership to develop the consensus needed to make significant changes. A system that spends more than $100 billion a year on vital tasks such as improving and saving lives will not easily change. The vested interests will be strong and the emotions will be high.
Yet if we want to forestall the impending collapse of California’s health care system, we must look at the big picture and make some difficult decisions about our future.
Keith Richman, M.D. is a Republican member of the California Assembly.
Comment: The California Health Care Options Project is a study of various models of health care reform that was requested by the state legislature. The study has now been completed and will soon be available for the members of the legislature. Dr. Richman will find the ideal master plan in this report when he reviews it.
One of the models studied, “Cal-Health,” is based on Dr. Richman’s own legislative proposal, Assembly Bill 32. The Lewin Group analysis of his proposal demonstrates that it would still leave five million California residents without insurance coverage, but would increase costs by about $1 billion. On the other hand, three of the proposals would provide comprehensive benefits for everyone while decreasing costs by billions of dollars.
When Dr. Richman reviews his copy of the report, we hope that he will heed his own advice and demonstrate strong leadership. We hope that he will not be deterred by strong vested interests and high emotions from doing the right thing. We hope that he will recognize the deficiencies of his own proposal and join with those that support the single payer approach. Comprehensive care for everyone at a lower cost is clearly the moral imperative.
Sumner Rosen, Professor Emeritus of Social Welfare Policy at Columbia University, responds on the problems of linking insurance to employment and the misplaced efforts of foundations. Donald Light expands on the issue and then comments on the Bush administration’s unusual approach to health policy. And Beth Capell comments on factors other than price that influence employers.
Sumner M. Rosen, Ph.D.:
It’s been clear for a long time that the employer base for health coverage will shrink irreversibly. Cost data like this tell part of the story; the more important part is the erosion of the employer-employee linkage as job tenure shortens and multiple jobs over one’s working life become the dominant pattern. Employers will continue to shrink the core and expand the periphery of the work force through downsizing, contracting out and a host of other moves amply documented in the business press. That RWJ persists in this futile effort is discouraging evidence of failure to learn from substantial and growing evidence that new initiatives are needed. The right wing virus of ideological resistance to a federal program appears to have infected people and institutions that should know better.
Donald Light, Ph.D.:
Besides trying to get free-riding employers to offer affordable health insurance, the other great white hope of foundation board members is CHIP and its extensions. They have poured tens of millions of private money into trying to make this new public patch, in the patchwork quilt of public health insurance programs, work. It would be instructive to hear from Ted Marmor and others why they think CHIP and other patches have low uptake and costly problems, while Medicare did not and does not.
Closely related to this question is another approach: just do it. Today’s NYTimes article announces that President Bush simply decided that Medicare would cover the wide-ranging, messy and costly care that patients with Alzheimer’s disease need. It’s a rather major advance for a tragic group that are an insurer’s nightmare. It’s “incremental reform” but without even the trappings of “reform.” No debate. No bill. He just did it. What are the implications of this for participants and readers of this listserve?
Beth Capell, Ph.D.:
It would be terrific if one of our academic colleagues did a state-by-state comparison on this topic.
Such a comparison would show that in California, where premiums are lower than almost anywhere else in the country, employers are substantially less likely to offer coverage, particularly to low-income workers, than elsewhere in the country where premiums are higher. This is also true within California: Bay Area employers facing higher premiums are more likely to offer coverage than Los Angeles employers whose relatively low premiums reflect a ferociously competitive market for both plans and providers.
Similarly, in California, in the early-mid 1990s when premiums were level or declining, employers shifted cost to workers and the number of uninsured remained stubbornly the same or increased–while in the late 90’s as premiums in California increased, the number of uninsured declined and employers ceased shifting costs to workers—because of the tight labor market. Again, price of premiums was not directly and simply related to levels of uninsurance or worker share of premium.
While employers may claim that price is a major factor, experience suggests otherwise. Other factors, such as the nature of the labor market and the rate of unionization, are better explanatory factors for underlying trends.
Price is merely the polite term for employer freedom to ignore the need of working people for affordable health care.