Do Schwarzenegger Vetoes Signal a Push for Comprehensive Reform in 2009?

Governor Arnold Schwarzenegger vetoed a host of health care reform bills on Tuesday. Some of them were to be expected. For example, he struck down Senate Bill 840, Senator Sheila Keuhl’s attempt to create a government-run, single payer system in the state. The Governor has been on record as opposing this approach for years and has vetoed the concept in the past. His vetoes of several bills requiring medical plans to include coverage for certain conditions is also consistent with his previously stated opposition to coverage mandates.

But there were lots of surprises on the list, too. Governor Schwarzenegger vetoed legislation that would have made it far more difficult for carriers to insurance companies to rescind an insured once they’ve accepted an application for individual or family coverage (Assembly Bill 1945 by Assemblyman Hector De La Torre. No carrier practice has garnered more negative press — and bigger fines — than rescission. From a political point of view, AB 1945 was a soft ball. Yet Governor Schwarzenegger struck it down.

He vetoed legislation (Senate Bill 1440 by Senator Keuhl) to compel carriers to spend 85 percent of the premium they take in on medical care — even though this concept was contained in the unsuccessful comprehensive health care reform package the Governor was pushing for last year. The same fate befell Senate Bill 973 by Senator Joe Simitian that would have created a statewide public insurer to link together existing regional and county-based health plans even though it too was similar to a portion of the Governor’s own reform plan.

Governor Schwarzenegger’s veto of Assembly Bill 2 by Assemblyman Mervyn Dymally was especially surprising. It would have expanded the ability of the state’s existing high risk pool to help more Californians unable to qualify for coverage in the private marketplace due to pre-existing health conditions.  The program needs significant help to continue to meet its mission. He also vetoed Senate Bill 981 by Senate President Pro Tem Don Perata which would have prohibited “balance billing” by doctors and other care providers.

The Governor had his reasons for keeping these bills from becoming law. His veto message concerning AB 1945 deplored the practice of unfair rescission and listed consumer-protection provisions he would want to see in legislation dealing with the issue. But he noted that AB 1945 was “written by the attorneys that stand to benefit from its provisions” and would lead to unwarranted litigation. Similarly, he preferred a different solution to the problem of balance billing than the approach embodied in SB 981.

Vetoes of this type, over approaches to solving problems, are common. They represent legitimate policy and political differences. The Legislature, for example, considered several bills addressing recission. They could have worked with the Governor’s office to fashion a compromise that he would sign. That didn’t happen. The veto did.

But it’s Governor Schwarzenegger’s rationale for vetoing AB 2, SB 1440, and SB 973 that best illuminates what’s in store for California concerning heatlh care reform. In all three of his veto messages, Governor Schwarzenegger made clear he wants comprehensive health care reform. Piecemeal and incremental changes are unacceptable.

I’ve written previously about why state health care reform efforts usually fail. In my mind, meaningful and comprehensive reform will need to come from Washington. And while enacting such reform has been greatly complicated by the current financial crisis, it still remains near the top of the domestic agendas for both Senator John McCain and Senator Barack Obama.

If the new Congress and the next Administration succeed in enacting dramatic health care reforms, it could preempt laws and regulations at the state level. To me, this suggests the efforts of California’s leaders might best be spent in helping to shape what happens in Washington, DC. Governor Schwarzenegger apparently disagrees.

Governor Schwarzenegger’s vetoes make clear he intends to pursue a California solution. It’s not just what the veto messages say, it’s their political impact that is important. They keep pressure on lawmakers to enact substantial reform. His opponents, for example, will be unable to call for a “time out” on further changes to the system while the new laws are given a chance to work. His allies, while angry at the vetoes, will work all the harder to get their pet reforms enacted.

In some significant ways, the potential for success is greater in 2009 than it was in 2008. Governor Schwarzenegger will be negotiating with a new cast of Legislative Leaders.  He will will be working with a relatively new Legislature, many of whom will have no scars with from his previous effort. Yet, unlike in 2007 when he launched the Year of Health Care Reform, a year in which, for most of it, the Governor offered only general principals, in 2009 he can use his defeated reform legislation, Assembly Bill X1-1, as a detailed starting point.

Certainly, the task won’t be easy. It may even be impossible. The state’s finances are in shambles and health care reform is expensive.

But there’s a legacy to be attended to. Plus, the Governor does not like to lose and the defeat of ABX1-1 was both visible and painful. His vetoes are a clear signal of where he’s headed. Expect 2009 to be the Year of Health Care Reform. Again.

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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.

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.

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.

Canadian Waiting Lists Getting Longer Dispite More Money

As part of my irregular perusal of Canadian media, I came across an interesting article by George Jonas in the National Post. The article reports on a Frasier Institute study showing Canadians waited on average 18.3 weeks for non-emergency surgery in 2006, about half a week longer than in 2005. This despite the provinces  spending more tax dollars to reduce unacceptable waiting times.

Mr. Jonas can’t understand Canadians’ tolerance of this, although he notes it “gives new meaning to the word ‘patient.'” He has no problem, or hesitation, in describing the predictable result of this situation, what he calls a three-tier medical system. The first tier is the traditional provincial health plan available to everyone, the “second tier is called the ‘inside track’ and the the third, the United States. Anyone who thinks that wealthy or well-connected Canadians stand meekly in line and wait 18.3 weeks to see a specialist doesn’t live on this planet. The well-connected jump the queue, while the rich hop on a plan … and get themselves looked after in Cleveland, Austin, Phoenix or Rochester.”

Mr. Jonas laments Canada’s lack of private health insurance. “No one can guarantee health, but people should be able to buy therapy. Making therapy a government monopoly, and then doling it out on whatever basis — first-come-first served, lottery, status, connections or some murky bureaucratic set of priorities — combines iniquity with inefficiency.”

Recent events in the debate over changes to California’s health care system will embolden single-payer advocates to push their legislative package, Senate Bill 840 (Kuehl) even harder. They’ll be out in force at the Assembly Health Committees hearing on the Governor’s bill currently scheduled for October 31st. Maybe someone will ask them about the three tier Canadian version of their proposal. I doubt it, but one can always hope. 

In the meantime it’s kind of fun to read both Californian and Canadian newspapers. In the former, liberals are seeking Canadian-style health care reforms; in the latter conservatives are seeking private coverage such as available in the California. Perhaps we could bring them together in one room, sell tickets and finance health care reform with the proceeds.

OK, perhaps not, but it would be entertaining. And maybe even enlightening.

Carpe Diem — or at Least Seize the Special Session

There are actually two special sessions in Sacramento right now: one on water; the other on health care reform. For reasons due to the timing of potential initiatives, water is the first focus. And from what I hear it’s not going well.

But that’s legislation under the bridge (sorry). In a few weeks the Legislature will turn it’s attention to health care reform in earnest. There will be tremendous pressure to do something. After the budget fiasco, the failure to address reapportionment, perhaps inaction on water, Governor Arnold Schwarzenegger, Speaker Fabian Nunez and Senate President Pro Tem Don Perata need a victory of some kind to salvage the reputation of the the 2007 Legislative Session. This is especially important for the Legislative Leadership who will be asking voters to approve a change to term limit laws on the February ballot. If the initiative passes Speaker Nunez and Senator Perata will likely remain in their positions for several more years. If it fails ….

So health care reform might be the last lifeline left to our heroes. Which means something is likely to emerge from the special session. What’s not known is what.

Many observers I’ve talked to are increasingly pessimistic that comprehensive reform will move forward. They think some insurance market reforms may pass, specifically the requirement that 85 percent of premiums be spent on health care services. But when it comes to insuring more Californians, they consider expansion of Healthy Families eligibility to cover more children is the only likely accomplishment (this would be ironic since approximately $66 million promised for enhancing Healthy Family and MediCal outreach programs was cut from this year’s budget).

This may sound reassuring to those who are concerned lawmakers, in their great need to pass some health care reform legislation will pass bad health care reform legislation. Certainly there’s a lot to be worried about. The 85 percent heatlh care services mandate, as currently proposed, will likely increase premiums and decrease competition, especially in the individual and small group market segments. A requirement that carriers accept all applicants, regardless of their risk profile passes, without an effective mandate for individuals to purchase coverage before they’re on their way to the emergency room, individual insurance premiums will skyrocket and carriers will flee the state. The purchasing pool could become a black hole, sucking up more of the marketplace than is healthy for the state’s economy or the private marketplace. And that’s just the start. There is plenty to fear from getting health care reform wrong.

There’s also much to fear in doing little, or even worse, nothing. There are real problems in today’s health care system. Insurance reforms are a part of what’s needed. It’s not the only part needing a fix, far more important is the need to deal with escalating health care costs.  Yet politics being what it is, the focus now is on the insurance industry. If not changes emerge from Sacramento, the demand for “doing something to stop the evil insurance companies” will continue unabated. Doing something, if it’s done right, will enable politicians, the media and the public to focus on deeper and more serious problems.

Another reason to do something right now is to deflate the momentum of building behind single payer alternatives like SB 840. There is likely to be an initiative next year to bring a Canadian-style system south to California. It will be much easier to defeat — as it should be for a host of reasons — if voters perceive lawmakers as addressing their health care worries.

Finally, it’s important to do something constructive on health care reform because it’s the right thing to do. In unveiling his reform package, the Governor state, “The status quo can no longer be everyone’s second choice.” He’s right. The issues have been on the table long enough. What we need now is to address those issues and then move on. What will be interesting to watch is whether the way lawmakers seek to address health care reform is aimed at scratching their political itch or in enacting constructive, meaningful public policy. We’ll know in a few weeks.

The Curtain Goes Down on Act I. Now Comes Act II.

As predicted, the Legislature passed Assembly Bill 8 (Nunez). The Senate vote was 22-to-17 vote and in the Assembly it moved forward on a 45-31 vote. (Significantly, there will apparently be no vote this year on Senate Bill 840 (Keuhl), the single payer proposal). Governor Arnold Schwarzenegger immediately announced he would veto the bill and pledged to call a special session to iron out an acceptable health care reform package (his full statement is below).

None of this is surprising. Nor should it be taken as a failure of the Administration or Legislative Leaders — although that’s how many reporters will no doubt describe it. Lawmakers and their staffs worked hard to reach a compromise before the regular legislative session adjourns this week, but time, the complexity of the issue, and the press of other issues made that impossible. What’s impressive is how close they came. Which sets the stage for a productive special session.

Not that anyone’s asked but my wish list for the special session:

• Detailed language on what each side (the Governor and the Legislative Leaders) are proposing.
• Time for interested parties to digest this information
• Meaningful public dialogue on the proposals with all parties keeping an open mind on how to achiee their common goals.

In short, while some backroom negotiating is inevitable, there’s been too much of it concerning AB 8. It’s time for the process to open up. What the Governor and the Legislative Leadership need to do is be very clear on their health care reform goals while not getting too locked into how those aims are achieved (the Governor makes a good start in this direction in his statement). By sincerely listening to alternative approaches, it may be possible to reach a workable and meaningful compromise. It’s happened before. Let’s hope it can happen again.

Here’s the Governor’s statement on health care reform in full:

Gov. Schwarzenegger Issues Statement Regarding Health Care Legislation

Gov. Arnold Schwarzenegger today issued the following statement regarding Assembly Bill 8, by Assembly Speaker Fabian Núñez and Senate President Pro Tem Don Perata:

“I applaud all the hard work that has gone into efforts to reform California’s health care system, but I cannot sign AB 8 because it would only put more pressure on an already broken health care system.

“First and foremost, AB 8 does not cover everyone. Any reform that leaves millions without health insurance and fails to address our dangerously overcrowded emergency rooms simply maintains a broken system. I have said from the beginning of this debate that coverage for all Californians is critical to reducing health care costs for everyone.

“AB 8 does not protect consumers because insurers would still be allowed to deny coverage, leaving Californians vulnerable to loss or denial of coverage when they need it most.

“I also believe that AB 8 is financially unsustainable. I have always said that I would not sign a health care bill that puts the vast majority of the financial burden for reform on any one segment of our economy. AB 8 unfortunately does that by requiring businesses to pay at least 7.5 percent of their payroll into a state fund or on health care services for employees.

“I believe we can find agreement on a financially sustainable reform plan that shares responsibility, covers all Californians and keeps our emergency rooms open and operating. The historic agreement reached this past week on the use of hospital contributions for coverage demonstrates that a more balanced approach is achievable.

“We have made tremendous progress on this issue during the past session and have found considerable common ground.

“That is why I intend to call a special session of the Legislature so that we can finish the job of truly reforming our health care system. I know that legislative leaders are willing to get the job done.

“We must keep working until we achieve the kind of historic solution that all of us and the people of California want.”