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).

Progressives Accepting of Half a Health Care Reform Loaf?

Assembly Speaker Fabian Nunez has long supported a single payer health care system for California and prefers that solution to his own health care reform plan, Assembly Bill X1-1, passed by the Assembly earlier this month and awaiting consideration by the State Senate on January 16th.

Yet, he takes Governor Arnold Schwarzenegger at his word that he will not sign a single payer bill and notes that the Governor previously vetoed such legislation, Senate Bill 840. Consequently, he encourages progressives to recognize this reality and line up behind ABX1-1, health care reform that can be enacted.

The Speaker made this plea explicit in posts on several liberal blogs (that’s one, here’s another and another) last week. In his post, Speaker Nunez warned  progressives that “it would be a shame if disappointment over the chances of single payer (and I’m a supporter of single payer)  detracted from the opportunity we have to do a strong measure of good for the millions of Californians who don’t have, or are having trouble affording, health care.”

His plea for liberals to line up behind ABX1-1 seems to be having an effect. Consumers Union is on board. Several labor organizations, including the Service Employees International Union (SEIU), are backing the bill. They, and others, are finding ABX1-1 to be a very satisfactory partial health care reform loaf.

Mike Russo, Health Care Advocate and Staff Attorney for the California Public Interest Research Group (CalPIRG), does an excellent job in parsing the legislation and pointing out the reason progressives should support it: “ABX1-1 sets out an entirely new framework for health care in this state, and it’s critical to focus on making that framework the best it can be, rather than rejecting it for an unsustainable, intolerable status quo.” Whether you agree or not with his politics, his post is insightful and well worth reading.

The Left is far from united on ABX1-1. Senator Sheila Kuehl, the author of SB 840, remains opposed. So is the California Nurses Association. But the fact that proponents of a single payer scheme for California are not united against ABX1-1 is a major victory for Speaker Nunez and Governor Schwarzenegger.

And it puts pressure on Senate President Pro Tem Don Perata to push the legislation through his house. Senator Perata, however, has placed the future of the bill in the hands of the Legislative Analyst’s office. He has asked them for an analysis of the legislation’s impact on the state’s finances. If the result is a report showing the state can’t afford ABX1-1, it would be hard for Senator Perata to bring the bill forward. If the analysis shows the health care reform package would help the state’s finances, he’s pretty much pledged to get the bill passed.

But what if the Legislative Analyst calculates a budget neutral impact or even that the impact is impossible to determine? In other words, what if it’s a “tie?” In that case, having a substantial portion of the liberal community advocating for the bill is to result in Senator Perata pushing ABX1-1 through the Senate. In other words, the support of liberals breaks the tie in favor of the legislation passing. 

Whether ABX1-1 should pass the Senate is still an open question for many of us. What’s interesting about the dynamic taking place in the progressive universe, however, is how it runs counter to business as usual.. 

True believes on either end of the political spectrum often take a “purist’s” approach to issues. It’s all or nothing. In their willingness to accept what they see as a partial victory, liberals have increased the odds California will pass comprehensive health care reform legislation next month. That’s hardly business as usual.

Health Care Reform, Polls and Presidential Politics

Bill Robinson, a Palm Springs insurance agent and voracious researcher on health care reform issues, recently circulated a gem of an article concerning a seeming contradiction in how Americans view the health care system. The gist of the article,  posted in November by The Century Foundation and written by Maggie Mahar, is that Americans consistently denigrate the health care system while simultaneously claiming, by huge majorities, that it works just fine for them, thank you.

Comparing results from several polls, Ms. Mahar identifies this apparent discrepancy as resulting from Americans’ satisfaction with their own current health care coverage, but insecurity about how long they’ll be able to maintain it. With premiums rising, coverage contingent on sometimes precarious employment and, if I can add to Ms. Mahar’s list, politicians constantly claiming the system is broken beyond repair, widespread insecurity is not surprising.

At the same time, there are plenty of polls showing that people don’t have a lot of confidence in how Washington runs things, either. This creates an interesting quandary for presidential candidates. Most voters feel the system needs substantive changes, yet they don’t trust the government to make things better.

It’s no surprise then, that none of the major Democratic presidential candidates have called for a government-run single payer system. Instead they call for plans that expand the size and scope of public programs to varying degrees, but preserves the private system. There are differences between the plans: Senator Barack Obama focuses on affordability, Senator Hillary Clinton, former-Senator John Edwards and Governor Bill Richardson place more emphasis on universal coverage, with Governor Richardson distinguishing himself by avoiding the creation of any new bureaucracies.

What’s significant, however, is that the second most oft used phrase by the candidates is that “no one will have to give up their current insurance if they don’t want to.” (Still holding strong in first place is “The system is broken.”) The Democratic candidates, consequently, get to have it both ways, to a degree. They get to say they’re going to fix the current system with new regulations and public programs, but they’re going to preserve private sector involvement. This may play well in the general election, but it’s not likely to excite many of the more strident constituents of the Democratic party who will accept nothing less than a single-payer system (cue the California Nurses Association).

Republican candidates face a different challenge. They have an aversion to new taxes (or cutting back on existing tax cuts). And they don’t like turning private sector services over to the government. So they focus more on affordability with few, if any, new public programs. This addresses the “my coverage is fine” dynamic the polls identified, but it doesn’t face up to the demand for change. The result is the inverse of the Democrats’ dillema: the Republican candidates’ positions will get them through the primary season all right, but it’s going to look weak after the conventions.

As the Kaiser Family Foundation surveys and other polls have shown, health care is one of the most important issues voters expect presidential candidates to address. And as Ms. Mahar points out, the polls also indicate a nuanced understanding of the issue by voters. Since the candidate’s messages must be equally nuanced, their positions tend to clump together, with obvious differences between the parties. Consequently, the specifics of the candidates’ health care proposals are not likely to be decisive in garnering support, at least not early in the primary season. What will be more important than specifics is how their proposals reinforce their core messages.

Senator Edwards, for instance, needs to show that his plan will help the poor and middle class. Which is why he emphasizes universal coverage. Senator Clinton’s program needs to underscore her claim of competency and experience, which she does by highlighting the differences between this plan and the one she pushed in her husband’s administration. Senator Obama represents a break with the past, which means his opponents do him a favor by attacking his plan. And Governor Richardson brings to the campaign broad government experience at the state and federal level. His plan underscores this by redeploying and expanding existing public programs, not creating new ones.

The importance of the health care reform issue, and of the candidates plans, will change over time. For now, however, they are mirrors of the candidates’ themes.  Which, given the seeming contradictions in the polls, is no doubt the wisest political strategy.

A Long 10 Months

It could be a long 10 months. If California enacts ABX1-1, the health care reform compromise worked out by Governor Arnold Schwarzenegger and Speaker Fabian Nunez, we’re in for a public relations war that will start out nasty and get worse from there.

ABX1-1, the Health Care Security and Cost Reduction Act, is a framework for health care reform, bereft of funding. It will take effect only if voters approve a financing initiative supporters will seek to qualify for the November 2008 ballot. When it comes to health care reform, passions run deep. Many participants in the debate have a near religious belief in the rightness of their cause. And health care itself is an emotional issue. Taken together, these factors will tempt partisans on both sides to make bold, dramatic and emotional attacks on their opponents.

In fact, it’s already started. Daniel Weintraub, posted a story on the Sacramento Bee’s CapitolAlert web site concerning the California Nurses Association plans to march on offices of Cigna in protest of the company’s denial of a liver transplant for a critically ill 17 year old. The nurses see this as proof that ABX1-1 is fatally flawed as it fails to address the problem of denial of care. However, after being challenged for claiming the denial was made based on the cost of the transplant, the Nurses Association now admits the transplant was denied because Cigna considered it experimental and, consequently, not covered. (Cigna’s conclusion will be examined under the state’s independent medical review system.)

What’s hypocritical about the California Nurses Association protest is that their preferred solution, a state-run single payer health care system would be no better. Instead of an administrator who works for a health plan deciding whether the treatment is experimental, the decision would be made by an administrator working for the government. As Mr. Weintraub notes, “It’s misleading for the nurses to imply that their plan somehow would give every patient every treatment they requested. It wouldn’t.”

The plight of this teenager is sad. Manipulating her situation to support misleading attacks proved too tempting for the California Nurses Association to resist. That’s sad, too. Unfortunately, while they were the first to succumb to this enticement, they won’t be the last.

Note added December 21, 2007: A few hours after Cigna agreed to cover the transplant, the teenager passed away. While Cigna normally does not cover experimental treatment, the company made an exception in this case. Doctors at UCLA, where she was being treated, said patients in situations similar to Nataline’s who undergo transplants have a six-month survival rate of about 65 percent. My condolences and sympathy to her family.
 

Everyone Lives in Glass Houses

America’s health care system encourages a hunt for scapegoats. It’s expensive and bureaucratic. Some people don’t have it and those who do fear losing it. While there’s a lot that works in the current system there are also real problems with it. And those problems are challenging — just ask Governor Arnold Schwarzenegger and the Legislative Leadership who have been trying, so far in vain, to “fix” what they call California’s “broken system” for eleven months now.

Where’ there’s problems like these, Darth Vadar must be near at hand. That’s just the way we think in this country. So it’s not surprising that some folks sincerely believe the biggest problem with America’s health care system is for-profit insurance and pharmaceutical companies. This group would include, among others, Michael Moore and Physicians for a National Health Program. Those who believe profits is the root of all health care evil point to the fines imposed by the California Department of Managed Health Care on Blue Cross of California, a subsidiary of for-profit WellPoint, Inc. for recinding coverage as proof.

Yet non-profits have demonstrated an equal ability to earn fines. Just ask Blue Shield of California and Kaiser, to name two (for rescission and patient dumping problems, respectively). So some scapegoat the entire industry and conclude only the government can manage health care.

If so, how do you explain the more than half a billion dollars apparently misspent by the State Compensation Insurance Fund? That’s the findings of an audit, released today by California’s Insurance Commissioner, Steve Poizner. According to the Los Angeles Times, Commissioner Poizner’s report showed that over the past 10 years, the government-run workers’ compensation insurance company spent in excess of $500 million “for outside marketing help that often provided ‘minimal services ….’”

The Times article describes the “scathing” audit as painting “a picture of an obscure rogue operation with more than $22 billion in assets, little oversight, minimal public checks and balances, and indiscriminate spending with little attention until recently from top state officials ….” The State Fund, responding to the report, admitted to “serious shortcomings” in the way it managed its responsibilities in the past.

What does an agency managing workers’ compensation have to do with health care reform? First, it demonstrates that even state agencies managing insurance operations can do wrong. This undermines the conclusion of those who claim the profit-motive is the root of all health care evil.

Second, lawmakers tend to use the State Fund as a template for managing state health care programs. Like the State Fund, the Managed Risk Medical Insurance Board is a five person state board which operates out of the limelight and with relatively minimal oversight. Unlike the State Fund, there’s not been a single whiff of scandal in the way MRMIB operates its programs, which includes Healthy Families, Access for Infants and Mothers, and the state’s high risk insurance pool. I know some of the board members. They are trustworthy individuals of high integrity.

The point here, however, is not the virtuousness of MRMIB versus the State Fund. Nor is it that one state agency’s misdeeds means no state agency can be trusted any more than the questionable actions of a particular carrier means that health plan is thoroughly corrupt. On the contrary. Like humans, state agencies can do great things — and bad things. So can insurance companies, whether they’re for-profit or not.

The first point here is that no one — and no entity — is perfect. All of them operate in glass houses. People and organizations make mistakes. These are to be punished and corrected, not ignored. But they shouldn’t damn the entire organization and its kind. After all, Darth Vadar is fictional character. Scapegoating accomplishes nothing. It only distracts from the real issues we need to address.

Upcoming Medicaid Cuts: A Single Payer Warning

If the debacle over funding for the State Children’s Health Insurance Plan (SCHIP) wasn’t enough, here’s another reminder why ceding control of health care decisions to the government can be hazardous to your health — especially if you’re not powerful or well connected. Washington is cutting yet more Medicaid funding and, as a result, services to California’s most vulnerable residents are at risk.

The Sacramento Bee reports at least $15 billion in Medicaid funding is being cut by the feds, $4 billion of that from Targeted Case Management programs. According to the article, written by Aurelio Rojas, Targeted Case Management programs are used by counties to serve “pregnant women and infants, the elderly who cannot care for themselves, the mentally disabled, foster children and adult probationers who receive substance abuse treatment.”

The federal dollars are used to match expenditures by state and county governments. Because of the nature of the programs, it’s not yet possible to project the impact on California’s Medi-Cal program (Medi-Cal is the state’s version of Medicaid). However, the Bee reports state officials as predicting it will be a “substantial amount.”

The cut to Target Case Management programs has been delayed by the current Congress, but that repreive is scheduled to end next year.  Governor Arnold Schwarzenegger has written California’s congressional delegation asking them to help extend the maratorium and to try to reverse the cuts. Whether that will happen is unknown, but there’s certainly no guarantee.

There are no market forces at play here, just the politics of the federal budget. There’s no doubt far more than $15 billion in pork, waste and funding for out-dated programs in that budget, but it’s pregnant women, infants, and the elderly who cannot care for themselves who are taking the hit. Yet single payer advocates want to turn our health care system over to the this government — or its state counterparts. Do they think that every president from now on will be liberal? That Democrats will hold a majority of Congressional seats forever? Or do they labor under the misconception that governments: 1) always do the right things; or 2) at least do fewer wrong things than private (especially for-profit) entities. If so, there’s little evidence this is the case.

Instead here’s yet another example of a government program facing mounting  financial problems that attempts to address the problem by whacking away resources from those who need it most. I doubt advocates of a single payer system would say this is the “right” thing. At least private insurance companies are subject to regulation by state agencies. Bad things happen, but they get addressed. Between market forces and government oversight the system tends to right itself. But when it’s the government itself doing something like what’s happening with Medicaid, it’s just business as usual.

Everyone knows that government programs tend to spiral away from their original purpose toward a state of non-reality enabled by a host of barnacle-like interests. It’s Political Science 101 — just look at the Farm Subsidy program. Does anyone think a government-run health care program will be any different? Would voters hold incumbents accountable at the ballot box? Not likely.

Supporters of the effort to pass Senate Bill 840 (Keuhl), which would eliminate private health insurance companies and put virtually all health care for nearly all residents of the state in the hands of government bureaucrats, often describe their proposal as offering “Medicare for everyone.” Whether that’s a good model or not is for a later post, but what amazes me is that they never seem to consider even the possibility that they’ll be delivering what’s happening to Medicaid today, instead.

Failing to Address Health Care Costs Just Puts Off the Big Accounting

Bill Robinson, a health insurance agent in the Palm Springs area, sent me an interesting article last week. The article reiterates a key, but too often overlooked, truth about health care reform. Until lawmakers tackle the rising cost of health care, all the debate over health care coverage will eventually amount to little.

Take even the most extreme reform: a single payer system. Supporters claim that eliminating health insurance companies, agents and the rest of the private health care sector will provide enough money to support a government-run system providing everyone with virtually unlimited health care. They’re wrong, but for now, let’s give them the benefit of the doubt. What is likely to happen in, say, 10 years? Consider that cost of $1,000 worth of medical care in January 1997 cost over $1,470 in December 2006 according to Tom’s Inflation Calculator and it’s clear even single-payer advocates are going to have to come up with a boffo second act. A one time saving just doesn’t cut it.

Which brings us to the article Bill sent from Financial Week, “Cost of health-care system bugs employers”. The article points out the motivation for business executives to be fully engaged with health care reform. Of the $1.9 trillion in total health care spending in 2005, $694 million was spent on private health insurance premiums. Employers paid for $462 million of this, fully two-thirds. It’s a bottom-line issue for employers of substantial proportions.

Which is why folks like Andrew Mekelburg, Verizon Communications’ vice president of federal government relations complains that the presidential candidates are focusing on health care coverage, not health care costs. “Until you fix the system we’re all going to pay more,” complains Mr. Mekelburg. He notes that the health care system lags other areas of the economy in leveraging technology to increase efficiency and improve results.

Many of those interviewed in the article agree that achieving universal coverage is important. But as Helen Daring, president of the National Business Group on Health, puts it, “It’s ironic: the main reason people do not have coverage is because they can’t afford it….Politicians say, ‘we’ll get the coverage in first, and we’ll worry about the costs later,’ but you’ll never be able to do the cost part later.”

And that’s the crux of the matter. The reforms being debated in Sacramento and elsewhere are important. Some are necessary. Yet most miss the point that it’s constraining the cost of the underlying care that drives everything. Worse, some of the solutions being put forward could make things worse. Consider the pay-or-play approach of Assembly Bill 8, the approach favored by the Legislative Leadership. Ted Nussbaum, a consultant on health care coverage to large companies, offers this warning. “They have to prescribe the amount we spend. ‘You spend X% of your payroll on health care.’ … And when you set the amount it takes out the incentives for employers to come up with more cost-effective care. … [A mandate] leaves no room for innovation and flexibility and creativity.”

This is common sense. If the government creates the floor for spending on a specific item, why would anyone fight to make the cost of the item less expensive?

The debate today turns on who gets coverage and who pays for it. This debate needs to expand to include a discussion on how much we all pay. Until that happens no reforms, not even the most radical, are going to do more than put off the big accounting that is coming. And the longer we wait, the tougher corralling cost will be.