By
David Lazarus
So we learned from President Bush’s budget this week that the new-and-improved Medicare prescription drug benefit won’t cost Americans less than $400 billion over 10 years as originally proposed, but instead nearly twice that amount.
A pig in a poke? Quite possibly.
A lousy health care system? Definitely.
Boston University researchers released a study this week concluding that about half of all health care spending in the country is squandered on administrative waste, excessive pricing and fraud. Yet Californians may soon have an alternative, at least if a state lawmaker succeeds in her latest effort to introduce universal health care.
State Sen. Sheila Kuehl, D-Santa Monica, told me Thursday that she plans to unveil her California Health Insurance Reliability Act on Feb. 23. It will be Kuehl’s third stab at getting a universal-care bill through the Legislature. But this time things are a little different.
For one thing, disenchantment with the existing health care system continues to grow among both ordinary people and businesses saddled with skyrocketing insurance premiums.
Meanwhile, advocates of universal coverage have brought a new level of seriousness to their cause by hiring a prominent political operative, Andrew McGuire, to spearhead fund-raising and lobbying efforts. Less money, more coverage. And most importantly, a new report by the Lewin Group, a well-regarded health care consulting firm, finds that a system along the lines of what
Kuehl is proposing would reduce health care spending in California by $8 billion next year alone.
It also would provide coverage for the nearly 6 million uninsured people statewide and result in lower costs for virtually all California companies now providing insurance to employees. “This is an independent report proving that we can achieve universal coverage in California while reducing health spending,” Kuehl said. “It’s a very important development.”
It’s not a slam dunk, though. Kuehl acknowledged that almost as soon as she introduces her legislation this month, the insurance and drug industries will unleash all their political firepower to protect their interests.
“When they do, I plan to raise questions about the obscene profits these companies are making,” Kuehl said. “I love a good fight.” Her bill would create a so-called single-payer health system in California– the first in the nation (although similar efforts are under way in other states). Single-payer systems have existed in Canada and other nations for decades.
Under a single-payer system, any California resident could be treated by any doctor at any hospital anywhere in the state. Commissioner to oversee. The state’s medical resources would be overseen by a newly created health commissioner, who would ensure that money is spent wisely.
According to the report issued last month by Virginia’s Lewin Group, funding for a California single-payer system could come in part from an 8.2 percent payroll tax for employers. The tax would replace all current health care benefits paid for workers, dependents and retirees. Lewin estimates that this change would result in a 16 percent average saving in 2006 for all employers now offering health
benefits.
Meanwhile, salaried workers would pay a 3.8 percent payroll tax that would replace all existing insurance premiums, deductibles and co-pays. According to Lewin’s projections, this would reduce the $2,788 expected to be paid by the average California family next year for health services and insurance by about $340 per family.
Exact funding breakdowns in Kuehl’s legislation are still being tinkered with. Industry likely to oppose “If people can get past industry’s propaganda, I think they’ll see that this is really good for them,” said McGuire, who was hired several weeks ago to serve as executive director of Health Care for All — California, a
grassroots organization backing universal coverage.
McGuire’s past political efforts have included campaigns for gun control and safer cigarettes. He also serves as head of San Francisco General Hospital’s Trauma Foundation, which seeks to prevent serious injuries. “If people in the corporate world get religion and realize this is in their best interest, we could really have a chance,” McGuire said of Kuehl’s bill.
That may be true for many companies, but not for the health insurance business, which would be effectively decimated by creation of a single-payer system. Bill Wehrle, acting president of the California Association of Health Plans, which represents about three dozen HMOs statewide, said people should be wary of single payer.
“There could be some amount of administrative savings under a single-payer system,” he acknowledged. “It all depends on what trade-offs people are prepared to make to get savings.”
Long waits in Canada
In Canada, for example, Wehrle said the country’s single-payer plan has resulted in longer waits for treatment and lower pay for doctors. “We think higher quality at lower cost is achieved when you have competition in the private sector,” he said.
Perhaps, but a poll this week by Research America, a Virginia nonprofit organization focusing on medical issues, found that nearly two-thirds of respondents believe most Americans are not getting the health care they need.
And a study last month by the Kaiser Family Foundation revealed that 63
percent of adults believe that lowering the cost of health care and insurance should be a top priority for political leaders.
Kuehl said her bill stands a good chance of passage in the state Senate. The Assembly might be rougher sledding as the legislation’s tax components are scrutinized by various committees. As for what California’s unabashedly pro-business governor might do when presented with a single-payer bill to sign, that’s a whole other matter.
“We have to show him the data on who would save money here,” Kuehl said.
“Eight billion in savings is a lot.” It is. And with the stakes this high, an open mind on everyone’s part isn’t too much to ask for.
David Lazarus’ column appears Wednesdays, Fridays and Sundays. He also can be seen regularly on KTVU’s “Mornings on 2.” Send tips or feedback to
dlazarus@sfchronicle.com.
