Health Care Reform: Getting Ready for Crunch Time

For health care reform, the next few weeks will be critical. Congressional committees are poised to pass legislation (to put this in perspective, this never happened during the Clinton Administration’s reform efforts in 1993-94). President Obama and his aides will become even more engaged concerning the legislative language they would like to see Congress enact. Senate moderates will begin taking sides on critical issues. In short, this is when it all starts coming together. In the next few weeks, it will become clear if Washington will enact health care reform and, if so, what it will look like.

Events will move quickly, so I’m clearing out some short items that have been lingering in my “to blog” folder for awhile. They are a random assortment of items unlikely to become stand-alone posts. Taken as a whole, however, I hope they provide some useful background to the history about to unfold.

1. Health care reform ideas are flying around the Capital in ever increasing numbers. Keeping track of them all can be a challenge. Good thing there’s the Kaiser Family Foundation’s health care reform proposal comparison tool. It makes comparing the entire plan or just particular issues across the various proposals simple.
2. One of the plans we have yet to see details on will be presented in the next few days in the Senate Finance Committee. They are working hard to construct a legitimately bi-partisan proposal, which means it has the greatest likelihood of foreshadowing the legislation likely to emerge from Congress. To get an early taste of the coming debate in that committee, check out the dialogue between Senator Charles Grassley and Senator Charles Schumer on CBS’ “Face the Nation.”
3. I’m a fan of the FiveThirtyEight.com blog. The site applies rigorous math to political topics. Very rigorous math: it’s prediction of election outcomes during the presidential primaries and the general election were eerily accurate. The site has a left-leaning bias on some topics, but overall, its posts are more nerdish than ideological. Recently it did an interesting analysis on how campaign contributions may derail a public option plan. Of course, whether Senators vote a certain way because of the contributions they receive or they receive contributions because of the way they vote is an open issue (which, to his credit, the author acknowledges). But the issue of causality does not change his conclusion: unless the several stars fall into place, a public option is unlikely to be part of the final health care reform package.
4. Need more evidence a government-run health plan is losing momentum? As noted last week, Democrats on the Senate Health, Education, Labor and Pensions Committee feel the need to dress their public plan proposal in moderate clothing. Then there’s White House Chief of Staff Rahm Emanuel making clear today the Administration is willing to accept legislation without a public plan. According to the Wall Street Journal Mr. Emanuel says “’The goal is to have a means and a mechanism to keep the private insurers honest. The goal is non-negotiable; the path is’ negotiable.”  Mr. Emanuel goes on to say creating a public plan only if the private market proves incapable of offering competition would be one acceptable solution.
5. Is a government-run plan even needed for health care reform to be meaningful? Uwe Reinhardt, an economics professor at Princeton, uses the German health care system as evidence it is not. This is not to say that the German system is an appropriate model for the United States, but it does undermine the argument that health care reform will only work if the government is both referee and player.
6. All the health care reform attention is focused on what’s happening in Washington. Some folks think this is a mistake. Instead, the federal government should simply enable states to pass their own reform plans. This would allow solutions to reflect local values and enable the best ideas to emerge over time. I disagree. States lack the levers of power necessary to reform something as complex and critical as health care reform. In a post from 2007 I cited an article by Ezra Klein describing the many failed state health care reform efforts. That doesn’t mean, however, that every health care decision needs to be made at the national level. Meaningful structural change — and the financing required to implement it – requires the federal government. Implementing those changes can be managed and administered at the regional, state or even local level.
7. The status quo is on life support. Health care costs are rising faster than either general inflation or wages. (To see for yourself, check out Tom’s Inflation Calculator). We have the opportunity today to enact responsible, meaningful reform. Without such intervention, the current system will eventually deteriorate until unwise and extreme proposals make sense. Fortunately, what’s likely to emerge from the current debate will be determined by moderates. This doesn’t mean the reforms won’t be flawed, but it does mean that there’s a chance for responsible reform sooner rather than later.
8. The advocates of a single payer system know that the status quo is unsustainable. It is why some of them will oppose whatever moderate reforms emerge from the current health care reform debate. They are like a doctor who sees surgery as the solution to every ailment. If the patient takes medication, and it works, they don’t get to cut. Similarly, if reasonable changes increase access to affordable, quality health care coverage and reduces overall spending, the need for a single payer solution vanishes.
9. Meanwhile, back at FiveThirtyEight, Nate Silver crunches some poll result numbers and points out that moderates are disappointed with President Obama’s handling of health care reform. Whether these results show President Obama needs to get more specific in describing his health care reforms (as Mr. Silver concludes) or whether he needs to focus more on pushing the right health care reform, is something to ponder.

Both Edges of Public Health Insurance Are Sharp

One of the more devisive issues emerging in the current health care reform debate concerns whether or not a government-run plan should compete with private carriers for individual and small group customers. President Barack Obama and Democrats in Congress have spoken forcefully in favor of this approach. Republicans have argued just as strongly against it. The role of government — should it be solely a regulator or serve as both regulator and competitor — is high on the list of issues most likely to frustrate a bipartisan solution.

I’ve written previously about the dangers of the hybrid approach, how it is likely to lead to a tilted playing field that benefits the public entry to the detriment and potential destruction of private offerings. But there are other points of view, several of them. For example, Princeton Professor Uwe Reinhardt, posting on the New York Time’s Economix articulates several reasons why the public might embrace a government competitor.

Professor Reinhardt notes that recent behavior by private health insurers has shaken public confidence in the industry. He also cites the double whammy of families facing lay0ffs in the current economic downturn and, as a result of our current employer-centric system, losing their subsidized coverage at the same time.

The long-term confidence elderly Americans have put in government-run Medicare plans, even over those of competing private health plans offering richer benefits.

But his strongest arguments in favor of a “Medicare for all,” public insurance program is its ability to beat down rising health care costs. “The providers of health care and health care products, to whom ‘national health care spending’ represents ‘national health care incomes,’ fear the market power that a public health plan might bring to the demand (payment)side of the health sector,” he writes.

Using its buying power, Professor Reinhardt expresses hope the public plan “might significantly bend down the lush, currently projected, long-run growth path of America’s health spending .”  Of course, it’s driving down the cost for enrollees in the public program at the expense of those in private plans that is of great concern to those who want to maintain a competitive system.

It’s the two-edged nature of a hybrid system that is most troublesome — and dangerous. As many of those who have commented on my previous post note, the key to meaningful health care reform is to focus on bringing down costs. Well, as Professor Reinhardt points out, Medicare-for-all can do that. But if the price of that cost control is the destruction of private insurance, why not just turn to a single-payer system in the first place? Well, of course, there’s huge problems with that approach, too, including the danger of runaway taxes.

Is there a middle ground?  Professor Reinhardt claims that an “all-American compromise that could give most sides in this fray much (but not all) of what they ask for” is possible and he promises to outline that compromise in a future post. Until he or someone else does, the debate over which side of the sword we want to face as a nation will, rightfully, be front and center.

A Hybrid Health Care System: Good Politics; Unrealistic Policy

When it comes to topics as complex as health care reform, the legislative dance generally involves two steps.  The first focuses on educating decision makers. It’s a sincere effort to learn the facts, understand the options and identify the trade-offs. Yes, there’s a political element to this phase, but there’s more often a genuine desire to learn about the issue.

The second step in the dance is when the actual language is drafted. This is the phase in which partisanship dominates, where the goal is to win, not educate. Yes, compromises will emerge, and hopefully they’ll be informed by the educational phase that went before, but this is when decisions get made. Which means it’s when political muscle matters more than the ability to educate.

We’re still in the educational step — for now. But the step is coming soon and outlines of the political phase are becoming clear. As I’ve written before, one of the key issues will be whether there should be a government-run health plan competing with private carriers for consumer’s premium.   Proponents see this hybrid approach as a way to drive down costs while keeping private health plans honest. Opponents see it as a big step to government takeover of the health insurance industry.

The Lewin Group published a study today that bolsters the argument of opponents. Entitled “The Cost and Coverage Impacts of a Public Plan: Alternative Design Options” the report attempts to quantify the impact a federal offering would have on private competitors (and on the income of providers). And that impact is substantial. The study assumes health plan offers coverage comparable to the Blue Cross Blue Shield Standard Option within the Federal Employee Health Benefit Plan (meeting President Barack Obama’s promise to offer all American’s access to the same coverage as members of Congress).  If this government competitor sets doctor and hospital reimbursement at the same level as is used by Medicare, the Lewin Group predicts over 131 million Americans would enroll — approximately 119 million of them shifting from private plans.

If the government alternative is made available only to individuals, the self-employed and small businesses the impact is significantly less, but still substantial.  The study estimates 42.9 million Americans would enroll in the government offering — 32 million of them moving from private plans.

While several factors were taken into account by the study’s authors, John Sheils and Randy Haught, the most impactful driver was cost. The theory is that the federal-plan would impose Medicare reimbursement rates on doctors, hospitals and other medical care providers. This gives the public plan a 30-to-40 percent premium advantage over comparable coverage offered by private carriers. The reason: as noted by in the study “payment levels for hospital services under Medicare are equal to only about 71 percent of what is paid by private health plans for the same service.” Indeed, this reimbursement rate covers “only between 92 percent and 95 percent of the cost of the services provided by the hospitals.” 

When it comes to doctors, the Medicare reimbursement rates are about 81 percent of that paid by private carriers.  The study assumes the public plan would have a further pricing advantage due to lower administrative costs resulting from there being no need to earn “insurer profit and insurance agent and broker commissions and fees.” But the big savings comes from the reduced claims costs.

Today, hospitals and other providers make up for the shortfall in revenue received for services to Medicare patients by increasing the fees charged to their insured patients. While this hidden tax raises the costs of premiums, it impacts on private carriers is somewhat equal. Since the Medicare population is distinct from the commercial market, the playing field remains level.

If the government were to step onto the field as a player, however, the dynamic changes. Now a competitor gains the pricing advantage — and that advantage would grow over time. As the public plan attracts more members, providers will see an increasingly negative impact on their income. The severity of the impact depends greatly on whether the public plan is open to all employers or only small businesses, the self-employed and individuals. If everyone has access to the public plan, the ability to shift costs to privately insured patients is greatly reduced. Under the latter scenario, providers could more than make up for the government’s underpayment by charging higher rates to large group insureds while also benefiting from a reduction in the number of uninsureds.

The likelihood, however, is that all Americans will have access to the public plan. President Obama has clearly linked health care reform to his economic recovery efforts. Large companies (think the auto firms) need the relief offered by the availability of a public plan — especially a public plan offering a 30-to-40 percent premium advantage.

The spiral would kick in rather quickly. As the public plan attracts more members, rates charged by private plans would go higher driving even more insureds to the government offering. Eventually, the only health plan standing would be the government’s.

Some might claim that the public plan would be unable — or unwilling — to use Medicare reimbursement rates. But why? The entire purpose of the government coverage is to drive down costs. Voluntarily paying providers more than Medicare would run counter to the governing agency’s mission.

There’s some caveats to this bleak scenario. It’s a good idea to be skeptical of all studies that estimate the future impact of unknown legislation. I’m not questioning the authors motivation or scientific rigor, but studies like this are, ultimately, educated guesses based on assumptions that may not come to pass and whose unintended consequences cannot, by definition, be anticipated.

Nonetheless, the study does raise the likelihood that the coming debate over whether there should be a public alternative available in the private market is the wrong topic. The Lewin Group Study underscores how difficult it will be for the government to maintain a level playing field while it competes on that field. And once the playing field begins to tilt in its favor, the result is inevitable: eventually the public plan will be the only player on the field.

So the debate is really whether Americans want a private health care system or a public system for all. There is no middle ground. The hybrid approach won’t last — eventually it will become a public system. So while the hybrid approach is attractive politically, it’s a false choice from a policy perspective.

There’s a legitimate debate to be had over whether the government should replace private carriers. That’s the debate lawmakers should have – especially while we’re still in the educational phase of the legislative dance. Calling for a mixed system sounds nice, but it’s not really an option. And health care reform is too important to debate fantasies.

Health Care Reform: This Decade’s Crux

There’s a lot of moving parts when it comes to comprehensive health care reform. The goal is bring down the overall cost of care while increasing access to as close to universal as is possible. When you’re dealing with spending that amounts to $2.4 trillion, roughly 17 percent of the nation’s Gross Domestic Product, it can’t help be anything but complicated. (These figures are from the National Coalition Health Care’s web site). There’s so many moving parts involved and so many parties impacted by each proposal that it’s almost too much for any one person to grasp it all – assuming maintaining one’s sanity is a priority.

Fortunately the political process tends to winnow the complexity down to a few basic conflicts. Partly this is because many aspects of any reform proposal are noncontroversial (is there anyone who opposed promoting wellness?) In part it’s because the country’s 24-hour news organizations don’t handle complexity well. They next clear cut conflict to keep the commercials from running together. Pictures of Democrats and Republicans arm-in-arm singing the praises of cutting waste and fraud don’t garner viewers. Seeing them in a verbal cage match does.

One of the conflicts focused on during last decade’s health care reform debate was the creation of mandatory purchasing pools. The Clinton Administration proposed requiring all Americans to sign-up with these pools which would contract with private carriers to offer specified (meaning government determined) health plans.

Proponents of this “managed competition” approach argued it would lower costs, allow Americans to own their coverage without regard to their employment status, and force health plans to compete on efficiency and service. Opponents saw it as a government takeover of health insurance with HMO bureaucrats being supplanted by government bureaucrats in an effort to eliminate choice, increase government spending and eventually lead to a single payer system.

That was then. Now it appears the big fight will be over voluntary health exchanges. The idea here is that, if you’re happy with the health insurance you have, keep it. If you’re not, get your coverage from the exchange. That coverage, at least for now, is promised to be comparable to what members of Congress receive.

By having a horse in the race, so to speak, the government could assure a truly competitive market. Private carriers would be able to innovate and compete as they do now, but there’s be a new player on the field (to mix metaphors). That would prevent competition based on gaming the system and focus it on price, service, and meeting the needs of the public.

To advocates like former Vermont Governor and past Democratic National Committee Chair Howard Dean (who’s also a doctor) having a government alternative in the market is critical. According to Greg Sargent in his The Plum Line blog, Governor Dean is forming “Stand With Dr. Dean” to serve as a grass roots effort to push for inclusion of a public insurance option in whatever reform emerges in Washington. “We’re saying that if the public option is not included, it’s not real health care reform,” Sargent quotes a Dean-ally as saying.

At the same time, Republicans in Congress, most noticeably Senator Charles Grassley, the ranking GOP member on the Senate Finance Committee, is saying a government competitor in the market is unacceptable. As reported in the Wall Street Journal, opponents are concerned that if the government pool becomes too large, it will “drive down reimbursements to doctors and hospitals, much like Medicare does. To remain solvent those providers would need to increase the costs they charge private carriers forcing them to raise prices. Eventually this would force private carriers out of business, leaving only the government-run plan. In other words, creating a public plan creates a slippery slope leading to a single payer system.

Whether this scenario comes to fruition or not, there is a high likelihood that rules and regulations would emerge to benefit the public plan. To continue mashing sports analogies, when the umpire steps up to the plate, he’s rarely called out on strikes. Maintaining a level playing field could be impossible when one of the participants in the game is entrusted with setting and enforcing the rules. It’s worth noting that the Securities and Exchange Commission regulates stock markets, but it doesn’t sell stocks.

Whether or not there should be a voluntary federal health insurance exchange is an important issue, one of many important issues. It is rapidly becoming, however, one of the few defining issues of this decade’s health care reform debate. There will be others, but how this one is handled will say a great deal about the political process that will shape the ultimate health care reform package. If the debate over a public plan is civil and reasoned, it holds out hope for a compromise solution that takes into account multiple views. If a solution is rammed through Congress the hopes for bi-partisan health care reform will fade rapidly.

That’s the crux of the matter.

Baucus Health Care Reform Plan an Interesting Start

Comprehensive national health care reform is coming. The only question is when and what wil it look like. There will be many reform plans put forward during this process. Some will have more substance than others. Some will be more credible than others. Some may even be practical. And a few might make America’s health care system better, not worse, than it is today.

One thing we know pretty much for certain is that a true single payer system is not coming any time soon. President-elect Barack Obama made comprehensive health care reform a central theme to his campaign. it clear throughout his campaign that he saw an important role for the private sector in the country’s future health care system. The Democratic National Platform made this approach explicit. (Irrelevant factoid: this post could well be the one and only time you ever read anyone referring to a party platform — until 2012).

What’s less certain is whether health care reform will be taken up by the Obama White House and/or Congress in the first few months of the new Administration. There are certainly a lot of influential lawmakers seeking to make health care reform an initial priority, including Senator Max Baucus, Chair of the Senate Finance Committee, and Senator Ted Kennedy, Chair of the Senate’s Health, Education, Labor and Pensions Committee. There’s more already entered in this particular derby and many more to come.

Senator Baucus’ health care reform plan is interesting for several reasons. First, any reform package will need to pass through his Finance Committee. Whether it’s his bill or another’s, Senator Baucus will have the ability to influence the final package. Understanding his starting point, consequently, takes on special significance.

Second, Senator Baucus’ plan, which he notes is not intended to be a legislative proposal, but rather a blueprint describing his vision for health care reform, devotes considerable attention to the need to reduce the underlying cost of medical care at great length. Even his discussion of wellness, preventive care, transparency, and reducing waste — standard components of any credible reform plan — goes well beyond the normal discussion. Most significantly, he goes beyond the low hanging fruit to address more controversial approaches. For example, he calls for financial incentives for primary care providers in the Medicare system and suggests funding them by reducing payments to specialists. He also endorses using medicare to test other primary care models especially those that “promote comprehensive care management and coordination, particularly for the chronically ill.”

Third, while the market reforms included in Senator Baucus’ plan should be no surprise to anyone who listened to Senator Obama during the presidential campaign, it does provide more specificity than was offered during the election. So while it contains the expected laundry list of proposals (tax credits, guarantee issue, etc.) it’s the additional details he provides that are significant.

For example, most insurance agents who read this blog will want to know what role, if any, they will have in the government-run Health Insurance Exchange Senator Baucus would create to compete with private sector offerings. A hint is all he provides, but it’s an encouraging one. In the discussion of the proposed purchasing pool, the document states “Plans participating in the Exchange would be subject to oversight by states with regard to consumer protections (e.g., grievance procedures, external review, oversight of agent practices and training, market conduct). ” italics added.

States are to regulate agent practices in connection with the pool. That must mean Senator Baucus envisions some role for agents in connection with the pool. As noted, it’s only a hint, but it’s a welcome one.

During the debate over Assembly Bill X1-1 earlier this year, carriers and agents were able to insert language in the legislation to allow, but not require, agents to sell products offered through the purchasing pool it would have created. Whether agents can educate lawmakers at the national level that the services we provide are worth including and protecting in whatever reforms eventually emerge will be challenging. But it appears Senator Baucus, at least, is open to the idea. And the experience agents have gained in California and elsewhere should aid in this effort.

No one, not even Senator Baucus, assumes his blueprint will be adopted as is. There will be a long and contentious health care reform debate before any kind of consensus emerges. Senator Baucus’ proposal is an important contribution to the stew of ideas that is simmering in the nation’s Capital. It’s an interesting start. But only a start.

Single Payer Losing Ground

This should be the best of times for advocates of a single payer health care system in America. The environment for radical change has never been better. After years of hammering at problems in the current system, there is general agreement on the need for substantial change. When asked what single issue will most impact their vote for president, a substantial number of voters have consistently cited health care according to the Kaiser Health Tracking Polls. For example, in the August 2008 survey, 16% cited health care as their determinative issue, ranking this concern behind only the Economy (49%), Iraq (25%) and and Gas Prices 18%). Significantly, health care reform is a critical part of the economy and 24% of the respondents said paying for health care and health insurance was a serious problem. 

Meanwhile, legislation to create a single payer system has been introduced in Congress and several states. In California, the Legislature passed a bill to create a state-run health plan:(Senate Bill 840 by Senator Sheila Kuehl. (It currently is awaiting a veto by Governor Arnold Schwarzenegger).

Given all this momentum for radical change, you would think a government-run system would be a major issue in the presidential campaign, yet it’s not. Clearly, Senator John McCain, the Republican nominee is not going to support a single payer system. What’s significant, however, is that Democrats are not advocating this approach either. Neither the Democratic nominee, Senator Barack Obama. nor his chief rival through the primary season, Senator Hillary Clinton, called for a government takeover of America’s health care system. Even the Democratic Party platform rejects a single payer system.

The 2008 Democratic National Platform, Renewing America’s Promise, gives its approach to heath care reform considerable prominence. Here’s some meaningful excerpts from the document:

“Democrats are united around a commitment that every American man, woman and child be guaranteed affordable, comprehensive healthcare.”

“Our vision includes: Covering All Americans and Providing Real Choices of Affordable Health Insurance Options.  Families and individuals should have the option of keeping the coverage they have or choosing from a wide array of health insurance plans, including many private health insurance options and a public plan. Coverage should be made affordable for all Americans with subsidies provided through tax credits and other means.”

“Shared Responsibility. health care should be a shared responsibility between employers, workers, insurers, providers and government. All Americans should have coverage they can afford; employers should have incentives to provide coverage to their workers; insurers and providers should ensure high quality affordable care; and the government should ensure that health insurance is affordable and provides meaningful coverage. As affordable coverage is made available, individuals should purchase health insurance and take steps to lead healthy lives.”

“Meaningful Benefits. Families should have health insurance coverage similar to what Members of Congress enjoy.”

This is not the language of single payer advocates. Yes, the Democrats call for coverage for all Americans that is “similar to what Members of Congress enjoy.” And they want to protect Americans from “the burden of skyrocketing premiums, unaffordable deductibles or benefit limits that leave them at financial risk when they become sick.” So we’re not talking about a “hands-off” approach here.

But we’re also not talking about a single payer system. Advocates of SB 840 claim as one of its chief benefits the elimination of health insurers and HMOs. That’s a long way from the platform’s call for “keeping private health insurance options” available.

There will be robust debate in Washington concerning health care reform. As I’ve written previously, a bipartisan coalition of Senators is waiting for the new president with their own health care reform package. Single Payer advocates are not going away. They will throw their proposals into the mix, but this won’t change the reality: the Democratic nominee and his party’s platform have rejected the single payer approach.

So here’s the question: if single payer advocates can’t win when the political stars are so strongly aligned in their favor, will they ever win?

My take is that the stars are realigning in such a way to make the answer a resounding “no.” Over the next two-to-four years there is a real possibility that Congress and the new president will pass meaningful, comprehensive health care reform. That’s another two-to-four years in which the cracks in existing single payer systems around the world will deepen, broaden and become more apparent. Faced with a new alternative to what will increasingly be seen as a nonviable approach at hand being rolled out, single payer advocates won’t go away, but they won’t be successful either.

Speaker Nunez on Health Care Reform 2008

According to Assembly Speaker Fabian Nunez, there’s no chance of California passing comprehensive health care reform before 2009 — if then. But that won’t stop the legislature from pursuing more narrowly focused  changes to the state’s health care system.

Frank Russo, who publishes the California Progress Report blog, was among those who talked to the Speaker following a press conference on Tuesday at the Sacramento Press Club.  Mr. Russo describes Speaker Nunez as being “quite animated” discussing the headlines that day concerning Blue Cross of California asking physicians to confirm the disclosure of pre-existing conditions on members’ applications (a practice Blue Cross has now discontinued). He quotes the Speaker as blasting the carrier and then promising, “No comprehensive health care package, but reforms to help improve the current health care system—absolutely.”

This is further evidence Senate Bill 840, Senator Shiela Kuehl’s legislation to establish a single payer system in California, is going nowhere this year. The Speaker again promised to subject the measure to the same level of scrutiny Senator Kuehl, as chair of the Senate Health Committee, gave to the Speaker’s comprehensive health care reform package, Assembly Bill ABX1-1. And if by some miracle — or political calculation — SB 840 were to be passed by the legislature, Governor Arnold Schwarzenegger would be certain to veto it.

Instead of comprehensive reform, I expect lawmakers to introduce several elements of ABX1-1. Setting a medical loss ratio target was an aspect of ABX1-1 that resonated with lawmakers — and will be looked at even more favorably in an election year. Bills addressing rescissions and establishing premium rate regulation mechanisms are also certain to emerge. There will be others. Few of these bills, however, are likely to become law. First, not all will pass. If money is a bill’s chances fall to near zero. Second, Governor Arnold Schwarzenegger will look closely at those that do make it through the legislature. During the health care reform negotiations that led to ABX1-1, he demonstrated a firm understanding of how the elements of ABX1-1 related to one another. He will likely be skeptical of a modular approach to reform, reasoning that without the checks and balances contained in ABX1-1, the consequences of a specific reform could do more harm than good.

There’s a good chance California won’t take another shot at comprehensive health care reform even in 2009. The timing will depend a great deal on who wins the White House in November. If a Democratic becomes president, California lawmakers will likely wait to see what progress on health care reform the new Administration can make. If a Republican wins, however, Democrats won’t wait. They’ll assume whatever reforms come out of Washington will be insufficient. The wild card in the timing? Governor Schwarzenegger. He’s termed out of office in 2010. He may want to finish what he started in 2007 while he can.

In either case, health care reform is not going away. Only the location may change.

Speaker Nunez to Put Single Payer Under ABX1-1 Microscope

Few pieces of major legislation in recent years have been subjected to the scrutiny Assembly Bill X1-1 received last week. ABX1-1, the compromise health care reform bill proposed by Governor Arnold Schwarzenegger and Speaker Fabian Nunez, was the topic of an 11 hour hearing by the Senate Health Committee on January 23rd and a thorough analysis of its finances by the Legislative Analyst’s Office. Indeed, it was the LAO report that opponents on the committee cited most in justifying their position.

Now other health care reform proposals are about to go under the same microscope. Speaker Nunez has promised nothing less. And first in line is likely to be the single-payer legislation, Senate Bill 840, championed by Senate Health Committee Chair Sheila Kuehl.

Supporters of ABX1-1 held a press conference on Tuesday to affirm their commitment to enacting comprehensive health care reform for California. During his turn at the microphone, Speaker Nunez referred to ABX1-1 as a “road map to getting the right type of health care that we need, to be a bridge between those who want government run health to those who want the private market to dictate the pace of how health care is delivered.” He pledged to continue to pursue this type of reform.

At the same time, he made clear his intent to hold proponents of competing systems — and specifically single-payer proposals — to the high degree of scrutiny to which ABX1-1 was subjected. It’s worth noting that among ABX1-1’s most vehement opponents was the California Nurses Association. They insist the only health care reform worth enacting is one that eliminates the health insurance industry and turns health care over to the government.

“I think it’s time … to have an honest conversation about single payer,” the Speaker said. “We cannot create the false sense of hope that we can do something better if it hasn’t been tested, vetted and put through the same type of scrutiny that our effort has been put through. And I intend to put each and every proposal that seeks to cover health care for everybody through that same process, because I think it’s only fair. And because I also believe that we need to be comparing any proposal not to some wishful thinking of what we might be able to do two decades from now, but to the world we live in today.”

In the past Speaker Nunez has supported SB 840. In introducing his own reform package early last year, Assembly Bill 8, he commented that while he preferred a single-payer solution he accepted Governor Schwarzenegger’s promise to veto it. Yet now he seems intent on demonstrating that SB 840 presents an even greater financial risk for the state than did ABX1-1. And that shouldn’t be hard to do.

Sacramento Bee columnist Daniel Weintraub recently commented on similarities in the risks posed by SB 840 and ABX1-1.  “[T]he single payer plan, to be financed primarily by a 12 percent payroll tax, would have run up a deficit unless its managers could have slowed the growth in health care costs to below the level of the growth in wages — an extremely unlikely prospect. To control those deficits, the commission to be put in charge of health care would have been empowered to cut benefits and levy co-payments on consumers. Hardly a risk-free undertaking.”

ABX1-1 was subjected to extraordinary scrutiny. What’s surprising is that such vetting is extraordinary. Major legislative initiatives — especially on issues that touch the lives of Californians as profoundly as health care reform — should be put under an ABX1-1-like microscope. This kind of detailed evaluation is, after all, what legislators are supposed to do. If some popular proposals are found to offer nothing more than a false sense of hope, so be it. Better to learn that now than after it’s enacted.

More significantly, it’s this approach that will help lawmakers find responsible ways to address challenging and complex issues. Ways that few might consider perfect, but that the majority can conclude with confidence, is an improvement to the status quo.

Let the scrutiny begin.

A Single Payer Advocate’s Perspective on ABX1-1

Some people support a government-run health care system out of political expediency; others from a sincere belief it’s the right thing to do. While I disagree with this conclusion, I respect the passion and beliefs of sincere advocates like Stephen Schear. Mr. Schear is a founder of Health Access and author of Proposition 186, the single payer initiative defeated by California voters in 1994.

Mr. Schear is also a supporter of Assembly Bill X1-1, the health care reform package pieced together by Governor Arnold Schwarzenegger and Assembly Speaker Fabian Nunez. He has posted an open letter on the California Progress Report blog to California single payer advocates who oppose this legislation.

Most readers of this blog oppose single payer schemes. Yet Mr. Schear’s letter is worth reading regardless of your opinions. First, because he describes how ABX1-1 could lead to a government-run system. Second, because the issues the questions he raises need to be considered by anyone concerned about and committed to meaningful health care reform.

Too often in this country we refuse to listen to those with whom we disagree. Former Senator John Edwards has made ignoring “these people,” which seems to be anyone he chooses to attack on any given day, a centerpiece of his presidential campaign. Which may be one of the reasons he’s quickly becoming an also-ran in the Democratic primaries.

What Senator Edwards fails to understand is that hearing the other side can add depth to our own opinions and strengthen our own resolve. And it can remind us that the other side isn’t some objectified enemy we can label as “these people.” On the contrary. These people are real people we disagree with. That’s not only a very important distinction from the Edward’s perspective, it’s very much OK.

Sheila Kuehl on ABX1-1

Assembly Bill X1-1, the California health care reform package worked out by Governor Arnold Schwarzenegger and Assembly Speaker Fabian Nunez, will receive its first Senate hearing on January 16th before the Senate Health Committee. (Update as of January 14, 2008: It appears the Senate Health Committee will take up ABX1-1 on January 23rd, not the 16th). This hearing will focus more on the policy issues underlying the legislation. While the financing scheme underpinning the bill will no doubt be debated, that topic is more in the purview of the Senate Appropriations Committee, which will hear the bill later, assuming the Health Committee moves it forward.

Which it is nearly certain to do. However, that doesn’t mean the Health Committee hearing will likely be an easy time for sponsors of ABX1-1. That’s because Senator Sheila Kuehl chairs the Health Committee.

Senator Kuehl is intelligent and politically savvy, a potent combination. She won’t frustrate Senator President Pro Tem Don Perata’s plans for ABX1-1. If he insists the bill move out of her Committee, it’s will in all likelihood move out of her Committee. But that doesn’t mean Senator Kuehl will give the bill a free ride. Expect tough questions and an insistence on thorough answers.

In anticipation of the January 16th hearing, I thought it would be interesting to explore Senator Kuehl’s views on ABX1-1, the Health Care Security and Cost Containment Act as it is officially known. To get straight to the bottom line: she doesn’t like it.

Senator Kuehl has written extensively over the past year on the Governor’s health care reform efforts. As the most ardent advocate of a government-run, single-payer system, Senator Kuehl was predisposed against the public-private sector approach advocated by the Governor to begin with. And she approves of little of what’s contained in the bill that emerged, or in the way ABX1-1 was fashioned.

Process: Back when it looked like the legislative leaders and the Governor might produce a bill before the regular legislative session ended in mid-September, Senator Kuehl posted a statement on her web site warning “[t]he prospect of legislative staff, sitting behind closed doors, hastily crafting a 100-page health reform ‘compromise’, to be pushed through the legislature with little or no public input over the course of the next 14 days, is deeply irresponsible.  Frankly, given the example of the energy deregulation bill, we ought to know better. “

As it turns out, it took a special session and several more months of negotiations to work out the compromise that became ABX1-1. And while there was extensive consultation with the public and stakeholders, it was only avialable in printed form hours before the Assembly passed the legislation on December 17th.

No one can seriously claim the bill was thoroughly vetted by Assembly Members prior to that vote. Given her previous statements, it’s clear Senator Kuehl will want to make sure it receives the review legislation this complex — and this important — deserves.

Policy: The vetting will no doubt be thorough. There’s not a lot in ABX1-1 Senator Kuehl likes. In an essay posted on her site shortly after the Assembly vote, Senator Kuehl makes it clear she’s underwhelmed with the bill’s scope and unhappy with its approach to addressing health care in California. “The press has described the bill in breathless prose as a ‘giant leap’ for health coverage.  Unfortunately, this is not quite the case, depending on who you are and how and where you work…. [S]ome of the provisions of the bill [are] actually harmful to regular, working-class and middle-class families.  And it provides less help than advertised for poor families, as well.”

She objects to the characterization of the bill as “providing” health care coverage to residents, noting that it’s more accurate to say “Californians would be required to buy insurance with no caps on premiums, no regulation of the cost of insurance or medical expense, no maximum deductibles, and no floor on how little coverage you can buy and satisfy the legal requirement.”

She laments the failure of the bill to define the minimum coverage Californians must have. And how the bill deals with recission of policies by carriers. And how insurers would still be able to maintain provider networks. And how medical assistants working in retail clinics would be subject to less supervision by Nurse Practitioners and Physician’s Assistants.

In short, she finds a lot not to like in the bill.

Senator Kuehl supports creation of a single payer system for California not out of political calculation, but from deeply held beliefs that it’s the right approach for the state and the nation. She knows that if ABX1-1 becomes law it will make it harder to pass her bill, introduced in the past two legislative sessions as Senate Bill 840, to succeed.

As I’ve noted previously, many progressives who support SB 840 seem willing to accept ABX1-1 as a partial victory. Senator Kuehl and a significant number of her strongest supporters are not. Senator Kuehl was one of the few Democrats in the State Senate to vote against AB 8 last September, the health care reform plan sponsored by Speaker Nunez and Senator Perata. Based on her writing, she’s doesn’t think ABX1-1 is much of an improvement.

Meanwhile, her allies, the California Nurses Association are actively campaigning against the bill. They’ve gone so far as to include snippets of a speech by Senator Barack Obama — without his or his campaign’s permission — in radio ads opposing ABX1-1.

None of this means ABX1-1 won’t make it through the Senate Health Committee. It is all but certain to do so. What it does mean is that, at long last, ABX1-1 will have a thorough, rigorous and comprehensive vetting. Whether you support or oppose the bill, that can only be a good thing.

(Note: A January 14th editorial in the San Diego Union provides more insights into Senator Kuehl’s concerns about ABX-1-1. My thanks to agent Bill Robinson for pointing this out).