San Francisco Chronicle Examines Problems in California Health Care System, Proposed Reforms

The San Francisco Chronicle last week examined the state's "badly overextended" health care safety net for low-income residents and proposals to address the problem. About six million state residents lack health insurance, and an additional six million receive coverage under Medi-Cal, which has a $26 billion annual budget. The Chronicle estimates that the state would have to spend an additional $17.5 billion on Medi-Cal to cover the six million uninsured residents, at a time when Gov. Gray Davis (D) has proposed a number of budget reductions for the program to help cover an estimated $34.8 billion state budget deficit. The Chronicle reports that the proposals could increase the number of uninsured state residents who seek care in public emergency rooms, "where care is extremely expensive." Grantland Johnson, secretary of the Health and Human Services Agency, said, "It is a difficult dilemma, and historically it is frequently the case that when you can least afford to expand coverage is when you need it the most." Health care advocates said that the proposal to reduce the Medi-Cal budget could lead to "more serious long-term problems," the Chronicle reports. Dr. Robert Ross, president of the California Endowment, said, "I would hope that the moment we find ourselves at ... is the door-opener to real reform. Cutting health programs in the middle of a health care crisis can only strike an observer as idiotic public policy, and we need to do something better." State lawmakers have proposed two bills that would provide universal health coverage in California. One bill would establish a single-payer health care system administered by the state; the second bill would require employers to provide health insurance for employees or to pay the state to provide coverage (Sterngold, San Francisco Chronicle, 12/29).

Blue Shield of California CEO Bruce Bodaken and other HMO executives nationwide have begun to propose universal health coverage plans "because they know skyrocketing costs, in the long run, can have only one result -- a universal health care system" administered by the government, Jerry Flanagan, a health care advocate with the Foundation for Taxpayer and Consumer Rights, and Frank Smith, a senior fellow at the Institute for a Civil Society, write in a San Francisco Chronicle opinion piece (Flanagan/Smith, San Francisco Chronicle, 1/2). Under a plan Bodaken proposed last month, most employers in the state would have to provide employees with certain health benefits, such as coverage for preventive care, physician services, hospital care and prescription drugs; small businesses would not have to provide the coverage. In addition, the state would enroll residents eligible for Medi-Cal or Healthy Families. The plan would require state residents who remain uninsured to purchase private health coverage; lower-income residents would receive subsidies from the state to help cover the cost (California Healthline, 12/3/02). Flanagan and Smith write that the plan would amount to a "blank check" for health insurers, who "would be guaranteed new customers but would not be accountable for what they charge them." The authors write that the state should "reformulate" the health care system to make services available to "all who need them" and implement "cost-efficiency requirements." Flanagan and Smith conclude, "Maybe, with Bodaken's help, California can implement a universal health care system. But the key is cost controls and accountability ... without which our health care system will continue to unravel" (San Francisco Chronicle, 1/2).

Sacramento Bee columnist Daniel Weintraub last week profiled Walter Zelman, outgoing president of the California Association of Health Plans, and his position on health care reform in California. Although "passionate as ever" about universal health coverage in California, Zelman said "he thinks it's a myth" that a single-payer health care system would cost less than the current combination of public and private health coverage, Weintraub writes. According to Weintraub, Zelman advocates "managed competition," in which large employers must purchase health insurance for employees and the state establishes regional pools to provide coverage for employees of small businesses and the self-employed (Weintraub, Sacramento Bee, 12/26).