Guest Blog | Brian Klepper | January 07, 2008

Business As Usual

California's Reform Proposal

In the world of health reform wonks, all eyes are on California at the moment. His Republicanism notwithstanding, Governor Schwartzenegger has developed a generous $14 billion bill that would extend universal coverage to all Californians by 2010.

Now that the plan is set, the special interests are lining up. Most of the health care groups - the physicians, hospitals, the health plans (with the interesting exception of Wellpoint) - are supportive, fully aware that if more money can be found for health care, they'll be the recipients. Also in the mix are two prominent unions: SEIU (the Service Workers' International Union) and the American Federation of State, County and Municipal Employees. They are both key supporters, each with health care workers who would benefit from the deal.

Now it comes out in the LA Times that the Governor's ally in the reform package, Assembly Speaker Fabian Nuñez, sweetened the deal for these unions's members with millions of dollars in workers' training and benefits. Over at The Health Care Blog, where I also write, SEIU Executive Vice President Mary Kay Henry, posted a piece called "As Goes California, So Should The Nation," hawking the reform proposal, but conveniently leaving out that SEIU's members will get special benefits in the deal.

I got calls from several reporters this week asking about the prospects for real reform in California. Alas, as much as I would like to see it, it seems very unlikely. California's reform proposal is all about universal coverage, and almost - not quite, but almost - absent meaningful cost controls. It finds new money from purchasers to pay for the care, but extracts virtually no concessions from the health care sector on how that care will be supplied or delivered. It will remain impossibly expensive. A couple making $54,000/year - more than the subsidized 400% of poverty - will be required to come up with $12,000 for health care, or more than 1/5 of their income. Pretty onerous.

None of this is lost, of course, on the business sector, which has not yet begun to flex its influential muscles. Assuming that the reform proposal is pushed out to a referendum, it will become a battle of the propogandists. My bet is on the businesses who comprise 6/7 of the California economy, and who will feel that the cost is too lopsided and too excessive, that too little has been asked of the health care sector and that no disciplines have been demanded.

The jury's still out, but I can't believe that meaningful reform will win out in California. Because, in the end, the ways that it is playing out is unchanged from the core of the problem itself. There is little consideration of how best to provide health care, but who will win the biggest purse. And that approach never really solves problems.

(Brian Klepper is a health care analyst and commentator based in Atlantic Beach, FL. He can be reached at bklepper@gmail.com. Opinions expressed by Health Commentary guest bloggers do not necessarily represent the views of Health Commentary.)

by Brian Klepper

Comments

January 08, 2008

Piecemeal approach won't work

Excellent points, Brian, but a state reform plan absent a national healthcare plan is doomed to fail.

In the Jan. 8 LA Times, it's reported that California is facing a $14 billion budgetary deficit. California doesn't even have enough funds to set aide $1.2 billion to pay for lifetime healthcare promised to state employees.

I agree that the healthcare sector has to start carrying some of the burden, but as long as the insurance industry has a stranglehold on the finances of healthcare, reform will never happen.

Reform has come to come from the top (viz., the federal government). Proposals from Republican presidential candidates miss the mark completely. The country desperately needs leadership that will unseat the vested interests that profit from the status quo.

by Tom Linden

January 09, 2008

Agreed

To Fix Health Care, We Must Fix America, and Only Business Can Do That

I agree, Tom. But it isn't just the health plans. Look at the 2006 lobbying contribution for the health care industry on OpenSecrets.org, and you'll see that fully half of the total is from the supply chain (drugs, devices, supplies). Doctors and hospitals figure in prominently as well. (Notice the last minute "save" from the 10.1% cuts in this year's budget? How about the AMA's acknowledged "advice" to HHS to keep Medicare physician data secret in the lawsuit with www.checkbook.org?) This is where the game is really played. So it isn't just the health plans.

I concluded a couple years ago that only non-HC business leaders, who collectively represent 6/7 of the larger economy, could out-influence the health care lobby and force through policies that would infuse the disciplines into HC that we know are necessary to re-establish stability and sustainability. It's a very tall order identifiying actual leaders in that group, though, because most are focused on short term advantages for their own interests.

And there's the deepest problem in America today. We have a system that promotes rule by influence, which undermines genuine leadership.

by Brian Klepper