Health Insurance reform urged in CA

By Richard Halstead, IJ reporter



BERKELEY - New legislation that would extend health care coverage to every resident of the state will be introduced early next year by Assemblyman Joe Nation, D-San Rafael, and Keith Richman, R-Granada Hills.

Nation and Richman announced their plans yesterday during a conference of health-care experts that they convened at the University of California at Berkeley. The conference, attended by more than 100 people, was one of five the assemblymen have mounted statewide to solicit advice on what their legislation should contain.

Nation said many of the details must still be resolved.

"Everyone would be guaranteed some basic package of coverage. The question is: What is that benefit level and how do you pay for it?" Nation said.

The plan is to require everyone in the state to have health care insurance, much like car insurance, Nation said. Bare bones coverage would be subsidized by the state.

"Anyone who wants more than that base package will have to pay more," he said.

Action is urgently needed, said Richman, who is a physician.

More than 6 million Californians, 25 percent of the population under the age of 65, lack health insurance, he said. Health-care costs are rising at double-digit rates. More than half of the state's hospitals are losing money.

"Emergency rooms throughout the state are closing, and trauma systems are on the brink of collapse," Richman said.

The bipartisan initiative comes soon after the repeal of state legislation that would have required medium and large businesses to provide health-care coverage for their workers. Businesses that opposed the new mandate, signed into law last year, spent millions to put Proposition 72 on the November ballot.

The Legislature could attempt to reinstitute the employer mandate and have Gov. Arnold Schwarzenegger veto it, Nation said.

"I'd rather do something productive," he said.

Nation said his and Richman's health care proposal would compete with legislation introduced last year by Sen. Sheila Kuehl, D-Santa Monica. Kuehl's plan differs from theirs because it proposes a centralized, single-payer approach, similar to the one used in Canada and the United Kingdom.

Supporters of the single-payer approach cite a study by the Lewin Group, which shows that $14 billion in administration costs could be saved by centralizing health care management. Supporters also contend that the cost of pharmaceuticals and medical equipment could be reduced by bulk purchasing.

The single-payer approach received scant discussion yesterday.

"I don't agree with their conclusions," Richard Scheffler, professor of health economics and public policy at UC Berkeley, said when asked about the Lewin Group's study.

Single-payer advocates often note that Canada spends less of its gross national product on health care than the United States while achieving better results, Scheffler said. Centralized management is not the reason, he said. Canada spends less on medical equipment than the United States, pays doctors less, and negotiates lower drug prices. That is the explanation, he said.

Contrary to popular opinion, the profits and administrative expenses of health maintenance organizations remained flat from 1997 to 2002 while premiums soared, said Dana Goldman, who supervises health economics for the RAND Corp.

Goldman attributes the rapid rise in health-care costs to the aging of the population and the increased use of medical technology. For example, Goldman says there are more magnetic resonance imaging machines in the Bay Area than all of Canada.

Helen Halpin, a professor of health policy at UC Berkeley, said most analysts would agree the single-payer approach is the most efficient way of delivering health care. But political opposition, particularly from insurance companies, makes it unlikely the single-payer approach will be implemented any time soon, Halpin said.

Marin Supervisor Susan Adams attended yesterday's conference. A supporter of the single-payer approach, Adams said she is skeptical the state's health care problems can be solved by a piecemeal approach. Adams has worked as a nurse practitioner and taught nursing at Dominican University.

Anmol Mahal, chairman of the California Medical Association's board, said anyone attempting to fix the nation's health care problems faces a big psychological hurdle.

"We still do not believe that death is the ultimate outcome of life," Mahal said. "We think it's preventable."