Health-care Meltdown

By Ruth Rosen, San Francisco Chronicle. Posted January 21, 2004.

"It's enough to make you sick," wrote one woman whose doctor no longer accepts HMO patients, forcing her to find a new physician.

Her e-mail was among hundreds of responses I received after suggesting in a recent column that we should consider replacing our broken health-care system with a single-payer system.

Many described how they and their doctors are drowning in the insurance paperwork and procedures demanded by their HMOs. Some confided the shock they experienced when their health plan abruptly ended its contract with their primary-care physicians.

Still others wrote about their struggle to keep up with escalating insurance premiums, rising drug costs and greater deductibles. Those who had been recently laid off worried about living without health insurance if they couldn't find a new job.

They are hardly alone. In California, according to most estimates, there are 7 million uninsured people, about 9,000 health plans and only 58 percent of physicians who now accept new HMO patients. Health care is also the issue that has caused pitched battles between workers and management, as evidenced by the now three-month-long grocery strike in Southern California.

We need to provide affordable, reliable and uninterrupted health care for Californians. The question is, what is the best way to achieve the goal of universal health care?

One way is to require employers to either provide health insurance for their workers or to pay into a state fund to do so. That is what Senate Bill 2, the recently passed "pay-or-play" plan, would require in 2006.

SB2 is a good start because, according to Anthony Wright, executive director of Heath Access, "it would at least spread the risk and cost among employers and help preserve and stabilize the health insurance we already have. "

But there are serious disadvantages to such a plan. The United States is the only country that yokes health insurance to employment, already a growing burden for business. More requirements could affect the ability of California businesses to remain competitive. SB2, moreover, would only cover 1 million of the 7 million Californians who lack health insurance.

There is, however, another proposal on the table -- a single-payer health system -- that would overhaul employer-based health care. SB921, authored by Sen. Sheila Kuehl, D-Santa Monica, would create a state health insurance plan in order to provide universal health care for Californians.

In Kuehl's words, "You would have a card, just like your health (plan) card now, but you could walk into any hospital, any pharmacy, any doctor's office, any dentist, and they would know you're covered."

"But isn't this socialized medicine?" worried readers have asked me. No, it's like Medicare. The state would simply finance and administer health-care reimbursements as a private insurer does now; it would not own the health facilities or employ the medical staff. Patients, not the government, would choose their own health providers.

But how can we afford this? Oddly enough, a single-payer plan could prove less expensive than our so-called health-care system.

Under a single-payer plan, California would drastically reduce the 10 percent to 35 percent that insurance companies now spend on administrative overhead, advertising and profits -- not to mention multimillion-dollar bonuses for their executives.

By contrast, single-payer plans -- such as Medicare or the Canadian health-care system -- have administrative overhead costs of 2 percent or 3 percent, little advertising and no profit. By using its purchasing power, moreover, the state could also buy drugs in bulk at discounted prices. Because everyone would be eligible to receive primary care, expenses for emergency care and hospitalization would likely decline.

Eligibility would be based on residency, rather than on employment. The plan would be financed by a payroll tax on all employers, employees, the self-employed and recipients of unearned income.

SB921 clearly faces an uphill struggle. Still, Kuehl deserves kudos for initiating a much-needed conversation about how to provide the most cost-effective way to protect the health of every Californian.

Ruth Rosen writes for the San Francisco Chronicle.

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