Febuary 2, 2007

Commentary:

Our Governor’s Health Plan

By James Santiago Grisolía, MD

California Governor Arnold Schwarzenegger has brought his star power to the health care crisis. While California legislative leaders Fabian Nuñez and Donald Perata have their own proposals, the Governor’s plan is more detailed, even though it has not been introduced as a formal bill. The impact has already been felt as far as Washington, where President Bush felt pressured to add last-minute health initiatives to his State of the Union speech.

While doctors bring ever more miraculous therapies into patients’ lives, the financing of health care has become unsustainable: Fewer patients have insurance, hospitals and doctors are going out of business, and employers and employees pay more and more for less and less coverage. Some 6.5 million people—1 in 5 Californians—go uninsured at least part of the year. In San Diego, the percentage of uninsured may be even higher, due to our large number of very small employers who can’t afford to insure themselves or their workers.

The many groups with a stake in health care—employers, insurers, families, unions, retirees, doctors, nurses and hospitals—make reform politically complex, and indeed the Governor’s plan has something to offend almost everyone. In its current form, the Governor’s plan would strengthen Medi-Cal and Healthy Family programs for very low-income families, while compelling employers to provide health care for workers up to 250% of the federal poverty level. Above 250%, working families would be required to purchase their own high deductible coverage, at least protecting them from being bankrupted by unexpected medical illness. The complete fall-off in employer coverage above 250% remains a critical problem with the current plan.

Health insurers would be required to spend at least 85% of their premiums on actual health care, reining in excessive profits and administrative costs, and would be required to better prevent and manage obesity, diabetes and other conditions.

Undocumented immigrants would be covered, which quickly aroused concerns from Republicans. However, bringing in everyone will average down the cost. According to the New America Foundation, the average insured family pays about $1,186 yearly to cover health care for the uninsured. Since only a small minority of the uninsured are undocumented, covering them appears to be cheaper than asking the rest of us to carry the burden of their emergency care. And our children, regardless of how they came to California, remain our most important resource for the future. Investing in their health is an investment in California’s future, like investing in highways, dams or the power grid.

Hospitals would be taxed 4% and doctors 2% on their gross revenues to pay for aspects of the plan. Many California hospitals already teeter on the brink of closing, including Paradise Valley Hospital in National City, which reportedly loses some $2 million dollars a month. Some hospitals would win and others lose badly under the proposed plan, potentially threatening our safety net. The plan proposes more realistic earthquake standards for hospitals. This might reduce the projected $110 billion needed to upgrade California’s hospitals to current earthquake standards, putting more money into caring for patients.

Meanwhile, the 2% tax on all revenues would translate into as much as a 10% tax on doctors’ actual income, which would force many doctors to leave the state or reduce unprofitable services. That means: stop seeing poor people, the chronically ill, or elderly people with many illnesses. Fortunately, the Governor’s office has already realized the 2% tax is a dangerous idea, and is working on better funding sources.

What happens next? The Governor may have provided the essential push, so mounting public frustration can finally break the logjam of multiple, intersecting interests. Besides doctors and patients, many others will make their feelings known in Sacramento, and a final plan will only develop if negotiations between Schwarzenegger and leaders in the legislature can reach an effective compromise. Continued public pressure for a solution could help our leaders to overcome political inertia, crafting a solution that not only helps all Californians, but provides a shining example for the rest of the nation.

Dr Grisolía expresses his own opinions in this essay. He serves as Chief of Staff Elect at Scripps-Mercy Hospital and as a Trustee of the California Medical Association.

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