The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

Health Care Reform Lemonade

Posted by Alan on November 11, 2007

They tell me that in golf (I wouldn’t know, believe me), what separates good from fair players is not how far they drive the ball, but how well they recover from a bad shot. Because everyone makes bad shots now and then.

In politics it’s pretty much the same: making lemonade from lemons. In 1992, Governor Bill Clinton was hammered by a host of damaging news stories just before the New Hampshire primary. Instead of winning the state, he came in second.  For some that would be the end of the road. Bill Clinton, however, celebrated the results, proclaiming himself the “Come Back Kid” and no one cared that Senator Paul Tsongas had come in first. 

The Democratic Leadership and Governor Arnold Schwarzenegger may be close to a compromise on health care reform. But as Dan Walters in the Sacramento Bee warns, “If health care … is worth doing, it’s worth doing right. It’s time for those involved to step back, take deep breaths and stop this madcap rush to do something just to say they did something.”

Substantial differences exist between Speaker Fabian Nunez and Senate President Pro Tem Don Perata on one side and the Governor on the other. And they’re playing with fire. If they fail to find the right balance between, to cite one challenge, requiring everyone to obtain health care coverage and a way to make coverage affordable, they could create a mess which will leave the state’s health insurance market in shambles. (And it won’t do much for the careers of some ambitious politicians, either), There are several issues on which a delicate balance must be struck and they’re performing without a net. Taking the time to get it right is of paramount importance.

But what if they can’t? What if, after all the press conferences, proclamations, negotiations, time, money, special session, raised expectations, near misses and pain there’s no deal? What’s the recipe for lemonade in that scenario?

My recommendation is that they pluck three lemons to work with.

1. Constrain Medical Costs
Every health care reform plan on the table includes provisions to control health care costs.  The approaches laid out by Democrats, Republicans and the Post-Partisan Governor overlap and, where they don’t, they often compliment one another. For example, most call for leveraging technology. Most include ways of promoting healthier lifestyles and preventive care. There’s some differences, but not much. It would take a week or two to fashion these ideas into a single, meaningful bill — one that would pass overwhelmingly and cost very little.

2. Capture Federal Medicaid Funds
California has one of the lowest Medicaid reimbursement rates in the country. This is wrong on many levels, but perhaps most significantly because the Federal Government matches a percentage of what the state pays. By underpaying for Medi-Cal (the state’s Medicaid program) California is failing to obtain from Washington what the state is due. This situation is so absurd the California Hospital Association accepted the Governor’s proposal to tax hospitals four percent of their gross revenues so long as the money is first used to fully fund Medicaid reimbursement. For most hospitals in the state the combination of increased reimbursement and federal funds more covers the revenue tax. If comprehensive health care reform is out-of-reach, capturing these federal funds is still possible. And the federal matching funds would help the state reduce the growing deficit.

3. Keep Our Promise to the Uninsured
Expanding affordable health care coverage for all Californians is the goal, but if it’s out-of-reach for now, let’s at least keep our promise to those already eligible for existing state programs. Nearly one million Californians — about 15 percent of the uninsured in the state — are eligible for Medi-Cal and Healthy Families, yet fail to enroll in those programs.  CAHU’s Healthy Solutions reform plan makes several low- and no-cost suggestions on how to improve outreach programs. Better yet, the Governor and Democratic Leadership should propose restoring $66 million in funds cut from the budget this summer, which was to be used for enrolling more children into Healthy Families. Given the state’s budget situation, it is only prudent to identify the source of new spending. I nominate eliminating the tax loophole benefiting out-of-state yacht purchases. I don’t know how much revenue this would generate, but every penny should be devoted to enrolling children already eligible for Healthy Families. Given that direct a trade-off — reducing the cost of boats for rich yacht owners or providing health care coverage to poor children — even the most fiscally conservative legislator would be hard pressed to claim helping out-of-state yachts sellers is a better use of funds. A bi-partisan spending bill would be a sight to behold.

It would be terrific if meaningful, workable, fair and affordable health care reform can come out of Sacramento in 2007. But it may be the only result will be, as Dan Walters described the state’s 1996 electric utility reforms, “a monumental pile of unintended consequences.” Enacting meaningful cost containment, capturing federal funds and keeping existing promises made to the uninsured would be no small accomplishment. Lawmakers could rightly claim a partial victory. It would address serious problems and lay the groundwork for more comprehensive reforms down the road. That’s a lot more than lemonade, that’s sound public policy.


One Response to “Health Care Reform Lemonade”

  1. Sam Smith said

    As we speed towards the first volley in the Assembly on Wedenesday, I can already hear the drone of the sound bites and one upsmanships. Perhaps a little green tea in the lemonade would be helpful?

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