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DAVID LAZARUS / CONSUMER CONFIDENTIAL

Hopes for '07 health reform on critical list

August 15, 2007|DAVID LAZARUS

This was supposed to be the year that California finally did something about the roughly 7 million state residents who lack health insurance. Lawmakers proposed a broad range of fixes that got us, more or less, in the vicinity of genuine reform.

So where are we now? Pretty much worse than ever. Sure, people are still talking about change, but the budget mess in Sacramento has derailed virtually all other legislative business for 2007 and sapped momentum from the healthcare movement.

The word out of the Capitol is that even if a healthcare bill makes it to the governor's desk, it will be so watered down that millions of Californians will remain without coverage and little if anything will be done to contain costs.

The insurance industry, meanwhile, has responded to recent reform efforts by becoming even more organized. Consumer advocates say insurers are shoveling piles of cash toward controlling the healthcare debate and protecting their lucrative livelihood.

"The industry is saying that it will accept reform only if it's good for them," said Jamie Court, president of the Foundation for Taxpayer and Consumer Rights in Santa Monica. "The problem is that if it's good for the industry, it won't be good for the public."

Not that the reform movement is on life support. Last weekend, a town-hall-type event called CaliforniaSpeaks was held at various locations statewide with the likes of Gov. Arnold Schwarzenegger, Assembly Speaker Fabian Nuñez and Senate President Pro Tem Don Perata participating.

The event was sponsored in part by Blue Shield of California Foundation, a nonprofit organization that says it's dedicated to seeking "universal health coverage for all Californians."

"We wanted to bring the voices of Californians into the health-reform discussion," said Virginia Witt, a foundation spokeswoman.

Some might wonder, though, how extensive a discussion the foundation desires. According to financial records, all contributions to the organization in 2005 and 2006 were provided by Blue Shield of California, the state's third-largest health insurer, after Kaiser and Blue Cross.

In a conspicuous quirk of scheduling, CaliforniaSpeaks was held the same day as another event, dubbed the Great L.A. Healthcare Rally, which brought hundreds of reform advocates to City Hall who also are seeking universal coverage for all state residents.

The centerpiece of the rally was a bill, SB 840, put forward by state Sen. Sheila Kuehl (D-Santa Monica) that would create a government-run insurance program for California similar to systems in place in every industrialized democracy worldwide except the United States.

Blue Shield, like other health insurers, opposes SB 840, which would all but drive them out of business. The bill was approved by the Legislature last year but subsequently vetoed by the governor.

Kuehl told me before Saturday's rally that she intended to hold back the latest incarnation of SB 840 and await a hopefully more sympathetic Democratic successor to Schwarzenegger.

"I don't want to send SB 840 to the governor simply so he can grind it once again under his heel," she said.

Insurers basically back any proposal that would maintain and expand the current system, but this would only exacerbate our problems.

The industry's wide variety of clerical procedures contribute to about a third of the $2 trillion spent annually on healthcare in this country being squandered on bureaucratic overhead, according to researchers at Harvard University.

The ugly truth is this: The United States spends about twice as much per person on healthcare as most other industrialized democracies, yet infant mortality is higher and the average American doesn't live as long as people in countries that guarantee medical coverage to their citizens.

A single-payer approach akin to what Kuehl is proposing is the best way to guarantee fair and equitable coverage to all and keep spiraling costs in check. This isn't socialized medicine -- medical care would remain in the hands of private practitioners. It's universal health insurance, pure and simple.

Admittedly, it's also a political long shot. That's why Court at the Foundation for Taxpayer and Consumer Rights is cooking up a ballot initiative that he says would introduce "a middle way" to the healthcare debate.

His proposal, which is still being refined, would more heavily regulate private insurers to keep costs down and at the same time extend government-backed coverage to any who desire it through the California Public Employees' Retirement System, which already offers insurance to its 1.5 million members.

This isn't a perfect solution. What happens, for example, when all the rich and healthy people sign up with private insurers, and everyone else dives into the CalPERS pool? And does CalPERS even want to administer an insurance program with potentially more than 8 million members? No one at the retirement system returned my calls, but I hear no.

Kuehl says she's open to all ideas.

But she's sticking with her single-payer plan. "I'm concerned that halfway measures could convince people that everything's just fine," she said.

Things aren't just fine -- far from it.

And the prognosis won't be any better if all the talk of reform we've heard this year comes to nothing.

david.lazarus@latimes.com--

NOTE TO READERS

Consumer Confidential by The Times' new columnist, David Lazarus, now appears Wednesdays and Sundays. Our small-business report has moved to Thursday's Business section.

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