Politics is Fun, But It’s Policy That Matters

I’ve written more than a few posts about the politics behind California’s health care reform debate (like the one earlier today). One reason is to provide some insight on why things may be unfolding the way they are. Another reason is because its fun and sometimes interesting.

But at the end of the day, it’s the substance of legislation that matters. Especially when it comes to health care reform. After all, health care represents about 15 percent of the state’s economy. In dealing with this issue, lawmakers will impact job creation, business growth, government resources and, most importantly, the pocketbook of every California family.

The desire of Governor Arnold Schwarzenegger, Assembly Speaker Fabian Nunez, and Senate President Pro Tem Don Perata to pass something quickly is understandable. There’s a lot of strong political reasons for each to reach a deal before the Legislature’s scheduled adjournment on September 14th. However, because it is understandable doesn’t make it sound. The artificial deadline results in a focus on the wrong question. Instead of asking “what package can be signed?” the meed is to ask “what legislation should be signed?”.

So long as the final version of the bill is being written behind closed doors (or in the Governor’s famous smoking tent) the focus will remain on the wrong question. It’s not that the Governor’s and Legislative Leadership’s staffs aren’t well intentioned, smart and hard working. They are all three. It’s just that good public policy is achieved through vigorous public debate. The final package needs a thorough airing it can’t get in the insular world of a few rooms in downtown Sacramento. 

Getting health care reform right is more important than passing a bill quickly. If that means calling a special session of the Legislature to allow time for robust public input, then so be it. A special session presents challenges of its own, but the result will be far more substantive than what’s likely to emerge before September 14th.

Governor’s New Health Care Reform Ally

Governor Arnold Schwarzenegger won new support for his health care reform plan today, again demonstrating that it is dangerous to underestimate his political savvy.  According to the Sacramento Bee, the California Hospital Association came out in support of Governor Schwarzenegger’s health care plan, including its fee of four percent on gross hospital revenue (Hospitals back Governor’s plan).

Yes, there are some critical caveats to the deal. For instance, the fee on private hospitals’ revenue would be permanently capped at four percent. The fee itself would be contingent on passage of an initiative, which, according to the Bee is currently planned for the November 2008 ballot. That initiative would assure the fees raised from hospitals would be put in a trust along with federal matching funds. The trust would be kept separate from the general fund. First dibs on the trust money would be to raise Medi-Cal fees paid to hospitals.  The initiative would also have to provide for mandatory cost-of-living increases on hospital Medi-Cal reimbursements.  Any money left would be required to be spent on reducing the number of uninsured in the state. Added 9/7/07: At the same time, the CHA Board voted to put a stop to charging pateients for the disputed difference between their hospital bill and their health plans’ coverage, a practice known as “balance billing.”

This is a great deal for the hospitals. By getting their state Medi-Cal fees increased, the amount the hospitals receive from the federal government increases. This mitigates some of the financial impact of the fee. Locking in the fee at four percent helps insulate them from future political decisions. And the fewer uninsured, the less uncompensated care they need to provide. So while there’s some pain in the deal for the hospitals, there’s a lot of gain, too.

For the Governor, the deal is a major political boost. Hospitals are very critical centers of influence in their communities. Which is one reason the Governor has reportedly been personally on the phone calling hospital heads across the state — especially in the districts of Republican lawmakers. Additionally, having an interest group subject to one of the Governor’s taxes endorse the plan is a major coup. Expect to hear it mentioned every time doctor and business groups complain about the fee the Governor would impose on them. Added 9/7/07: Finally, the elimination of balance billing is a very pro-consumer victory for the Governor.

The Governor’s and Legislative Leadership’s staffs continue to try to hammer out a compromise on health care reform which could be voted on before the September 14th scheduled adjournment. The support of the hospital association will strengthen the Governor’s hand in those discussions. First, he now has another ally who can put significant pressure on lawmakers where it counts — in their districts. Second, it builds momentum towards the Governor’s viewpoint. And third, it again demonstrates his strong political skills, reminding Speaker Fabian Nunez and Senate President Pro Temp Don Perata that while Governor Schwarzenegger is still relatively new to the game, he’s very good at it.