A couple of unlikely political partners will introduce legislation in California this month they hope will bring sweeping changes to the state’s health care system.
The kingpin of the plan is universal “but not single-payer” health coverage.
Assembly members Keith Richman (R-Granada Hills) and Joe Nation (D-San Rafael) don’t always see eye to eye on social and fiscal issues, but they’ve found common ground in health care. Their vision, which includes providing health coverage for every resident of the state, is far-reaching, ambitious and, so far, scant on details.
“We’re not really ready to talk about the particulars yet,” Richman said late last month. “We have a good idea how all the details will shake out, but until we have everything worked out to our satisfaction, we’re keeping this pretty close to the vest. By the middle of January, we’ll be ready,” Richman said.
The Nation/Richman bill will compete with another universal coverage bill, SB 921, introduced by Sen. Sheila Kuehl (D-Santa Monica). Kuehl’s bill, approved by the Senate and the Assembly Health Committee last year, would create a centralized single-payer system organized and run by the state.
Kuehl estimates her plan could shift more than $22 billion dollars, now being spent on duplicative health care administrative costs into direct health care services through streamlined claims and reimbursement systems administered by the state. She says her plan would increase provider reimbursements and decrease drug costs.
A study by the Lewin Group, a national health care and human services consulting firm, estimated that a single-payer plan in California could save $14 billion in administrative costs by centralizing health care management.
Kuehl’s bill calls for placing every resident in a plan that would provide medical, dental, mental health, prescription drug and durable medical equipment coverage.
Nation and Richman say their proposal would provide basically the same things but without having the state oversee payment.
Business and insurance interests, traditional opponents of single-payer systems such as those in place in Canada and the United Kingdom, may find the Nation/Richman offering a more palatable alternative to Kuehl’s plan.
The Nation/Richman bill, called a “broad reform package,” comes on the heels of the repeal of state legislation (SB 2) that would have required some employers to provide health coverage for workers. The new bill would take things a step further.
“We’ll call for universal coverage,” Richman said. “Not single-payer, but universal. We think everybody in the state should have some kind of health coverage. It doesn’t all have to be the same kind and probably shouldn’t be. But just like every driver by law has to have auto insurance in California, everybody should have some kind of health insurance.”
The state would subsidize coverage for some low-income residents under the proposed plan. Details of where that money might come from and how it might be doled out are yet to be revealed.
“We anticipate bipartisan support for this,” Richman said. “This is definitely a broad reform package and although universal coverage is a big part of it, it’s not the only part.”
The bill will include “several proposals for efficiencies and cost-savings through better use of information technology and other practices,” said Richman, a physician for 20 years before running for office. The bill also will deal with end-of-life and quality-of-care issues, Richman said.
In the absence of a national plan for health care, states are struggling to find their own answers to growing problems related to rising costs, growing ranks of uninsured and access to care.
In Minnesota, Gov. Tim Pawlenty (R) is working on a public-private health care purchasing alliance designed to hold down increasing costs and improve care.
The proposal, developed by the governor’s “Health Cabinet,” calls for improving administrative technology and streamlining paperwork and regulations. It also supports tax incentives for health savings accounts and targets fraud and kickback schemes.
Pawlenty said the plan, called the Smart Buy Alliance, is a response to “unsustainable” cost increases. He said health care costs in Minnesota are increasing at the rate of $300,000 per hour, or $80 per second. Health care now costs the average family about $14,000 a year in his state.
Nation and Richman staged five public forums up and down the state last year, inviting policymakers, health care providers and other stakeholders to help shape their bill.
“We really don’t have a model to base any of this on,” says Richman.
“There are a lot of ideas out there, including what they’re doing in Minnesota.
We include some of those same proposals — the group buying system and the quality controls — but we’re trying to go beyond that and offer a comprehensive reform package.”
Nation and Richman say many of California’s problems are linked to the number of residents with no insurance. More than six million Californians — about 25% of the population under 65 — have no insurance, according to their estimates. Most health industry experts agree that double-digit increases in the cost of health coverage as well the increasing number of hospitals losing money and cutting back services are directly connected to the growing number of uninsured in California.
“Things are breaking down,” Richman says. “Emergency rooms are closing throughout the state, trauma systems are stretched to the max, hospitals and clinics can’t meet their payrolls at times and we really aren’t even reaching everyone we should in California, especially kids.”
“A big part of our proposal will center on getting increased enrollment for kids in health care plans,” Richman said.
As we officially start the second half of the decade, it appears clear that California legislators will pursue some version of universal health coverage.
Where the debate will probably get sticky over the next 12 months will be deciding between a single-payer plan, such as the one proposed by Kuehl, or a modified, more regulated version of the multiple-payer model proposed by Nation and Richman.