Business As Usual

Posted on | January 7, 2008 | Comments Off on Business As Usual

California’s Reform Proposal

In the world of health reform wonks, all eyes are on California at the moment. His Republicanism notwithstanding, Governor Schwartzenegger has developed a generous $14 billion bill that would extend universal coverage to all Californians by 2010.

Now that the plan is set, the special interests are lining up. Most of the health care groups – the physicians, hospitals, the health plans (with the interesting exception of Wellpoint) – are supportive, fully aware that if more money can be found for health care, they’ll be the recipients. Also in the mix are two prominent unions: SEIU (the Service Workers’ International Union) and the American Federation of State, County and Municipal Employees. They are both key supporters, each with health care workers who would benefit from the deal.

Now it comes out in the LA Times that the Governor’s ally in the reform package, Assembly Speaker Fabian Nuñez, sweetened the deal for these unions’s members with millions of dollars in workers’ training and benefits. Over at The Health Care Blog, where I also write, SEIU Executive Vice President Mary Kay Henry, posted a piece called "As Goes California, So Should The Nation," hawking the reform proposal, but conveniently leaving out that SEIU’s members will get special benefits in the deal.

I got calls from several reporters this week asking about the prospects for real reform in California. Alas, as much as I would like to see it, it seems very unlikely. California’s reform proposal is all about universal coverage, and almost – not quite, but almost – absent meaningful cost controls. It finds new money from purchasers to pay for the care, but extracts virtually no concessions from the health care sector on how that care will be supplied or delivered. It will remain impossibly expensive. A couple making $54,000/year – more than the subsidized 400% of poverty – will be required to come up with $12,000 for health care, or more than 1/5 of their income. Pretty onerous.

None of this is lost, of course, on the business sector, which has not yet begun to flex its influential muscles. Assuming that the reform proposal is pushed out to a referendum, it will become a battle of the propogandists. My bet is on the businesses who comprise 6/7 of the California economy, and who will feel that the cost is too lopsided and too excessive, that too little has been asked of the health care sector and that no disciplines have been demanded.

The jury’s still out, but I can’t believe that meaningful reform will win out in California. Because, in the end, the ways that it is playing out is unchanged from the core of the problem itself. There is little consideration of how best to provide health care, but who will win the biggest purse. And that approach never really solves problems.

(Brian Klepper is a health care analyst and commentator based in Atlantic Beach, FL. He can be reached at [email protected]. Opinions expressed by Health Commentary guest bloggers do not necessarily represent the views of Health Commentary.)