Outcome of Health-Related Ballot Measures Has Implications for Future Reform Efforts

Almost one-third of the Nov. 2 ballot in California — five out of 16 measures — dealt with health care.

That statistic alone speaks volumes about the importance of California’s single largest economic activity. That voters approved three of those five measures and came very close to approving a fourth — a groundbreaking health insurance proposition watched closely nationwide — adds a new note of urgency to the debate on health care reform.

“In a sense, you can look at this as a tremendous vote of confidence in doing something about the state of health care in California,” Rick Brown, director of the University of California-Los Angeles Center for Health Policy Research, said. “The question is whose money shall we use? One proposition made it clear people don’t want new taxes but another made it clear it was OK to tax the very rich for a worthy cause. And Proposition 72 came close to saying employers should pay for insurance,” Brown said.

Voters OK Measures on Stem Cell Research, Children’s Hospitals and Mental Health Services

Voters approved a $3 billion bond measure to finance stem cell research and another $750 million bond measure to upgrade children’s hospitals. They also approved an income tax increase for high-income Californians to underwrite mental health services.

Proposition 71, which provides 10 years of funding for stem cell research, was endorsed by Gov. Arnold Schwarzenegger (R) who broke ranks with President Bush on the issue. Bush opposes research involving new stem cell production and might pursue federal legislation to regulate it.

Even if stem cell research faces no legal or legislative challenges, payoffs in the form of cures or treatments for diseases are still a long way off.

“Don’t hold your breath,” advises Stephen Shortell, dean of the School of Public Health at the University of California-Berkeley. “Maybe in 10 or 20 years you’ll start to see some big breakthroughs. But that’s not to say we won’t see benefits before then. We will,” Shortell added. “The accelerated rate of learning because of this kind of research will produce a multiplier effect in all kinds of health science applications.”

“This is very good news for the scientific learning curve,” Shortell said.

Proposition 63, which increases the state income tax by 1% for Californians whose annual incomes exceed $1 million, is the first substantive expansion of mental health funding since state funding for mental health services was reduced during former President Ronald Reagan’s tenure as governor 30 years ago.

Other Measures Defeated

In defeating Proposition 67, voters declined to impose a 3% surcharge on telephone bills to support emergency medical services.

In the main attraction on the ballot after the presidential race, voters under Proposition 72 narrowly repealed SB 2, a state law enacted by former Gov. Gray Davis (D) that would have required some employers to provide health insurance for workers.

Although they came from different camps and carried different funding mechanisms, the two losing propositions addressed different branches of the same root problem. California has one of the nation’s largest percentages of uninsured residents — second only to Texas in the estimation of many industry experts. Because health coverage often is not part of demographic studies such as the U.S. Census, accurate data is difficult to come by, especially in large states with diverse economies and large immigrant populations, such as California and Texas.

The main source of health care for the uninsured population is emergency services, including the emergency department of the local hospital. Emergency services are feeling the pinch like never before, leading to Proposition 67.

Proponents predicted that SB 2 would have expanded health coverage to more than one million workers and their family members and reduced pressure on the state’s emergency services. The law would have required companies with 200 or more employees to cover at least 80% of the cost of health insurance for workers and their families beginning in 2006 or pay into a state fund to provide health coverage. Companies with 50 to 199 employees would have been required to provide coverage only to employees in 2007.

Both losing propositions were aimed at fixing the same problems. It may sound ironic on the surface that the growing number of uninsured is a major reason health care costs are rising as quickly as they are. But when you consider that ambulance drivers, emergency department nurses — and in many hospitals and clinics, all health care providers — feel compelled to help all sick and injured people, whether they can pay for it or not, spiraling costs make more sense.

Interpreting the Outcome

Although their causes lost at the polls, some in the coalition of labor, medical and patients rights groups supporting SB 2 are heartened by the close vote.

“I think it shows an impressive base to build on for the future,” Anthony Wright, executive director of Health Access Foundation of California, a patient advocacy group and one of the main supporters of SB 2, said.

“We had a very organized and well-funded opposition that spent more than $16 million dollars, and they still almost lost,” Wright said. “I think that shows people are getting ready for a change. If we had taken a real walloping, we couldn’t say that. But compared to the last two statewide health care reform initiatives, this was very encouraging,” Wright said.

In 1992, an employer-based health care reform initiative on the statewide ballot garnered only 32% of the vote. In 1994, an initiative that would have created a single-payer system was endorsed by 27% of the state’s voters.

“This one got 49%,” Wright said. “I think that shows a real desire for change.”

Donna J. Kingwell, interim associate secretary for external affairs in the state Health and Human Services Agency, is less inclined to read much importance in the close vote on Proposition 72.

“I’m not sure it portends anything for the future,” she said. “I think California voters were selectively willing to spend on health care, but I also think they showed great concern for the budget problems the state is having. We’re in a period of trying to stabilize the state’s economy and bring it back to its former health, and I think people were aware of that when they voted.”

Michael Shaw, assistant director of California’s branch of the National Federation of Independent Business, said voters recognized what his organization said was the harm SB 2 might do to California’s business climate.

“Forcing businesses to buy insurance was the wrong way for California to go,” Shaw said. He added that businesses should support government efforts to make health insurance more accessible, including plans that call for small businesses aligning to create more purchasing clout when negotiating coverage with insurers.

Schwarzenegger opposed SB 2 but not very loudly or noticeably until the middle of October. The governor’s tepid and relatively late jump into the Proposition 72 campaign coupled with the very narrowness of defeat, leads some health care leaders to predict Schwarzenegger may have been gauging the political climate in preparation for a more substantial leadership role in health care reform.

“The governor is frankly likely to be a lot more involved in the next move to do something about health care,” UCLA’s Brown said.

“I think there are good prospects for some serious movement in California,” Brown added.

Related Topics

Health Care Costs Insight Insurance Mental Health Public Health