It’s Not a Question of How, But of Political Will
Thank you for your kind invitation to participate in this dialogue. We [Insure the Uninsured Project] support all approaches that will increase coverage of the uninsured so that all 6.5 million uninsured Californians have coverage for basic health services. We don’t pick sides. We support individual mandates, employer mandates, single payor and incremental reforms to cover all children, working families and individuals who lack coverage. We are all one lost job or one serious illness or accident away from becoming uninsured.
The big question is how do we get from here (6.5 growing to 7 million uninsured) to there (coverage for everyone) in the midst a severe economic downturn that highlights the need for major reforms yet hamstrings our financial capacity to pay for care. Starting locally, programs like Healthy San Francisco need to be spread. They bring together clinics, public hospitals and public health plans into an organized system—an organized safety net delivery system for the uninsured. At a minimum, these efforts can provide a primary care doctor, an organized delivery system and electronic medical records.
California needs to ask the Obama Administration for a broad federal waiver that would do the following. Through this waiver, we could offer coverage to up to 3 million of our 6.5 million uninsured.
1. Consolidate all our state and local programs for low income Californians into a single system. This will include linking county and state physical and mental health care programs and covering all the uninsured with incomes up to 200% of the Federal Poverty level ($40,000 for a family of four).
2. Match all our state and local funds.
3. Tax hospitals and use the proceeds to increase their Medi-Cal rates to Medicare levels, and use DRGs (diagnosis related grouping) and pay for performance to get hospitals’ payment and quality incentives coordinated in a proper fashion. This has already been done successfully in several states, beginning in Massachusetts over 25 years ago.
4. Require that everyone in the state’s public programs enroll in the managed care plan of his or her choice. It has worked better than fee for service medicine for families; we will need specialty managed care and risk adjustments and special higher cap rates for those with certain kinds of medical conditions. On Lok and the Health Plan of San Mateo are excellent local models.
5. Adopt an interoperable basic electronic health record (EHR) system and require that every licensed provider and each health plan in the state transition to it. Kaiser’s EHR has already shown promising results.
At the federal level, my choices for health reform are whatever form of universal coverage President Obama and a bi-partisan sixty vote Senate majority can agree on. Let’s be clear from the start that we are going to need a bi-partisan Senate vote with support from both business and labor.
Personally, I prefer the ideas in the Senators Wyden and Bennett bill, an exemplary bi-partisan proposal. Wyden-Bennett covers everyone for a basic set of benefits, with benefits similar to FEHBP (Federal Employees Health Benefits Plan). It shifts the employer role from paying premiums to paying a tax. An individual pays a share of their premium and picks a private plan, a doctor and the coverage he or she wants; there are subsidies for those who cannot afford coverage. Everyone must have coverage—there is an individual mandate. There are regional or state based exchanges through which you buy your coverage on a guaranteed issue basis; you cannot be denied coverage regardless of your medical condition. If you want more extensive coverage, you, the consumer, pay the extra cost.
I prefer this approach for a few reasons. First, it avoids all the intersection issues and resulting administrative expenses between public and private coverage, between individual and employer coverage, and between four major types of public coverage. Think of your friend who lost a job, had COBRA coverage until it ran out and then tried to buy individual coverage and finally applied for public coverage for his family. Second, there are lots of workers who do not fit the mold of the full-time, full-year employee of a large company for which our employment-based system is best designed. Think of your family members now working several part time jobs to get by. Third, it redistributes the $300 billion in federal and state tax subsidies for private coverage to those employees and individuals that need them most. These tax subsidies are concentrated with high wage earners in high income tax brackets – not the lower wage working families who have the biggest affordability challenge with the costs of coverage.
My biggest concern is cost containment to assure long-term affordability. We need to eliminate the 30% or more of utilization that is inappropriate and wasting money. We need to get rid of the over-priced and poor quality care treatments and procedures and reduce the far higher than needed administrative costs for plans and providers. These costs need to be removed from taxpayer’s back and from corporate books so the economy, the budget deficit and job creation can rebound.
This is doable but is hardly going to be easy. It’s more a function of political will than of how to do it. We’ve had it pretty close to right a couple of times in California, but the big mystery remains: how do you do health reform right and in a way that the public and many of the stakeholders will accept and support? As a citizen, I’m going to be supportive of whatever President Obama and Congress come up with, and hope all of you will send them your good ideas and be supportive of the reform that emerges this summer. We might not reach perfection, but we’ll get something much better than what we have.
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Although pay for performance, electronic record keeping, and consolidation of the fragmented system are in general worthy goals that will most likely improve the quality of healthcare, they do not reduce the costs of healthcare. If you want to look at a great example of how mandates fail, just look at Massachusetts, with a burgeoning healthcare budget now twice it’s original estimate and still no universal coverage, and a bureaucracy on top ot the system (the Connector) that adds an additional 4-5% in overall costs.
The only way to really reduce and control costs is with some variation of a true single-payer, an improved and de-privatized Medicare for All perhaps being a decent model to strive for. You are right, all is missing is the political will, and I believe this will does reside with the people. We need to lead our leaders in the proper direction. The stakeholders are unlikely to go along with anything that reduces their stake, we are unlikely to change them, so we must go around them.