By Michael Lujan
October 29, 2017
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The California State Assembly convened a Select Committee Hearing on Health Care Delivery Systems and Universal Coverage (UC) last week. This two-day informational hearing was dedicated to understanding California’s complex healthcare landscape and how other countries provide universal health coverage. This was not intended to be a stage for protest or re-litigating California’s single payer bill (SB 562), which was shelved by Assembly Speaker Anthony Rendon. Tell that to the hundreds of red-shirted single-payer supporters who filled the gallery and the adjacent overflow room, many of whom are with the California Nurses Association and the Medicare-for-All coalition.
On Day-One, the focus was on who is and is not currently covered, how they are covered, and how we finance it. The current state of California’s health care delivery, and our record-low uninsured rate were studied in detail with supporting data presented by ITUP (Insure The Uninsured Project) and UC Berkeley Labor Center (speaker bios). Day-Two was focused on describing and comparing the different healthcare models around the world, presented by The Commonwealth Fund. This is the important and helpful data, in context, that should inform our elected officials on health care policy. I was grateful to attend and share some brief comments on both days.
I am a 30-year career insurance professional and only a part-time health policy wonk. I have invested a fair amount of time studying health policy and the data in my role with the State of California (building the sales and enrollment channel for Covered California), so I was familiar with most of the studies and stats shared over the two days. Still, I learned some new information and listened to all points of view with an open mind. That was the point of this hearing. To share, listen and learn about other ways to provide a uniquely American (or Californian) solution for our health care problem. Health care is a very polarizing topic. The hearing did not intend to arrive at any big conclusions, but to help share information and examine the current state of things and hear from the experts. I have met or worked with several of them while at the exchange, and truly respect their work and mastery on the topic. My summary:
“Health care is a basic human right.” The hearing opened with this statement from both Assembly Committee Chairs, Jim Wood (D-Healdsburg) and Joaquin Arambula (D-Fresno). The World Health Organization, the United Nations, and most developed countries have already made this declaration, some member countries have even amended their constitutions to ratify this. However, many other UN member countries consider health care as a basic human right without a constitutional amendment. Instead, they made a commitment to their citizens to build an infrastructure and enacted national health policies to support universal health coverage (simply meaning, everyone is covered by something; public and private). Also, this declaration does not mean healthcare must be free, with no share of costs, premiums or other assumptions. For some reason, these are popular U.S. myths. Harvard Medical School study: Working-age Americans have a 40% higher risk of death than their insured counterparts.
Does “Health care for all” really mean everyone? 59% of California’s 3 million uninsured are undocumented. 24% of the uninsured are legal citizens/legal residents who are eligible but have not enrolled in MediCal or subsidized coverage on Covered California. The remaining 18% are legal citizens who don’t qualify for subsidies and cannot afford premiums or elect to go without coverage, according to data from UC Berkeley/UCLA research. Billions of dollars are spent every year on uncompensated care. Supporters argue that providing health care services and enrolling all people (included the undocumented) in comprehensive coverage is not only a more humanitarian approach, it is also more cost effective.
The Under-Insured: While California has only 7.1% uninsured, 21% are also considered to be “underinsured”. They have ACA-compliant coverage but their deductibles and out of pocket costs are so high they may not afford to use it. The Commonwealth Fund defines them as “persons whose out-of-pocket health care costs (excluding premiums) are at least 5% of household for incomes under 200% FPL (or 10% for those over 200% FPL).” Another measure is if your deductible is at least 5% of household income (regardless of amount actually spent). As health care costs and premiums increase, more people are downgrading to higher deductibles to mitigate their rate increases. This under-insured number will likely continue to grow.
Which model of universal health coverage is best? Hard to say but it doesn’t have to be single-payer. In fact, most world universal health care systems use a combination of private and public insurance. Even systems that are perceived as being “single-payer” also have private and/or supplemental insurance options. Canada and the UK are actually pretty different but often described as the same ideal single-payer model we should adopt in the US. So, it’s debatable. France, Germany and the Netherlands also receive high marks for their are universal health systems which all keep employer-based coverage and offer private insurance options. UC models like Germany could serve as a better solution for the US since about half of Americans (and Californians) already get their health coverage from their employer. They all have one thing in common. Every country spends much less on health care (per capita) and most get much better health outcomes than we do in the US. The data is pretty hard to debate.
The role of private insurance. The single-payer talking points and slogans often vilify insurance companies, for-profit and non-profit companies alike. They often inaccurately blame insurance companies for the rising premiums without also examining the underlying cost of healthcare passed through insurance. Hospitals and providers actually earn higher margins than insurance companies, yet the blame often falls heaviest on insurance companies. Insurers are easy targets. Pharma (drug makers) also make an easy target for blame as they generally earn the highest margins in healthcare and make the headlines with egregious practices and profits. Truth is, no one villain or boogeyman is the sole reason for rising health care and insurance costs. These seven factors reported by the Bipartisan Policy Center in 2012 are still true today. Still, we are focused on insurers. In many UC countries, the private insurers must be non-profit organizations. Experts challenge the assumption that for-profit status matters as much as having the state negotiate and set health care and drug pricing. Also, experts agree a focus on fraud, waste and abuse (and payment reform) would have a greater impact on reducing our healthcare spend (and premiums)
We have a shortage of primary care doctors. This shortage varies by region and is especially felt in rural areas. Many of the uninsured go to the emergency room or community clinics for care. Our safety net healthcare system is severely underfunded and overburdened. Our doctors are not immune to health care squeeze and the relentless demand to serve more patients in less time while also protecting sustainable reimbursement rates. Physician burnout is a serious concern. In most other UC countries, the state negotiates reimbursement rates and sets health care pricing. In France and most other UC countries, doctors earn considerably less compared to the US but also the french have almost no medical tuition debt. Subsidizing medical school tuition could help more US doctors stay in primary care and not move to higher-paying specialty care. As a father of a soon-to-be medical student, I really like this idea.
These are just a few highlights and the presentations were dense with data and and graphs. A link to the presentation files and decks.
Many in the gallery didn’t want to hear about other universal health coverage models. Several “red shirts” were having distracting side conversations throughout the presentations and hissing whenever they heard something that did not support their single-payer narrative. They show up in big numbers, but many did not seem open to a balanced discourse. I did meet a few “red shirts” who actually engaged in real conversation and I even received some very positive reactions to my public comments.
The next hearings will hopefully dedicate more time on reducing healthcare costs in the next round of meetings and consider the effective role private insurers serve in the administrative process, disease management, cost-containment and innovation. It’s unfair and inaccurate to oversimplify our complex system and blame any one issue or entity for our broken health care system. I also think it’s illogical to seriously contemplate a state solution for a national problem. Other successful universal health care systems have another thing in common. They are national solutions, not regional.